Good day, and welcome to the HDI first quarter 2022 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ian Tharp. Please go ahead. Thanks, Christina, and good morning to those joining us today as we discuss HDI's financial results for the first quarter of 2022. My name is Ian Tharp, Investor Relations for HDI, and joining me on the call today are Rob Brown, HDI's President and CEO, and Faiz Karmally, Vice President and CFO. HDI's Q1 2022 earnings release, financial statements and MD&A are available on the investors section of HDI's website at www.hdidist.com. These statements have also been filed on HDI's profile on SEDAR at www.sedar.com. Before we start, I wanna remind listeners that during this call, management may make forward-looking statements. These statements involve various known and unknown risks and uncertainties and are based on management's current expectations and beliefs and which may prove to be incorrect. Actual results could differ materially from those described in these forward-looking statements. Please refer to the text in HDI's earnings press release and financial filings issued today or yesterday for a discussion of the risks and uncertainties associated with these forward-looking statements. Also note that all dollar figures referred to today are in US dollars, unless today's speakers state otherwise. I'd now like to turn the call over to Rob Brown. Rob? Yeah. Thanks, Ian, and good morning to those joining us today. We're pleased to share with you details of HDI's record-setting results for the first quarter of 2022. I'll start today with our key financial and business highlights for Q1. Faiz Karmally, our CFO, will then provide further detail on our financial results. I'll then finish off today's prepared remarks with our outlook. In the first quarter, we set new all-time highs for sales, adjusted EBITDA, and profit per share. Our results were driven by a combination of favorable market conditions, strong execution on the operating and strategic fronts, and the positive impact of our two most recent acquisitions. As it relates to the market, conditions continue to be robust. Supply chains in the first quarter remained tight for several product categories we sell and more balanced in others. Overall, we continue to benefit from a strong pricing environment. At the same time, our size and scale as one of the largest architectural building products companies in North America continued to be a competitive advantage, providing us with diverse domestic and import product sourcing options. Demand was also very good, supported by strong fundamentals in our end markets. Our teams executed well in this environment. We achieved organic sales growth of $115 million or 39% as compared to the same quarter in the prior year. In addition, we had significant sales contributions from the recently acquired Mid-Am and Novo businesses, adding $ 245 million or 84% sales growth compared to Q1 of 2021. You will recall that Mid-Am and Novo represent significant and transformational acquisitions for our company. Mid-Am was acquired in February 2022, and Novo in August of 2021. These additions brought us access to the attractive ProDealer and Home Centers customer channels. They also significantly increased our addressable market to sell architectural building products. Mid-Am and Novo meaningfully enhance our growth trajectory going forward, and combined are expected to contribute $1 billion in sales in 2022. I'm pleased to report that both of these important transactions are performing well and in line or ahead of expectations, and the potential for achieving meaningful synergies together remains strong. The combination of organic growth plus acquisitions resulted in significant consolidated sales growth of $ 354 million in the first quarter. This was up by 121% as compared to Q1 of 2021. This record sales result was paired with a strong first quarter gross margin performance. Gross profit 22.9%, up sharply from 19.9% in Q1 2021. The increase in gross margin percentage reflects several factors. This includes our ability to execute in current market conditions, successful implementation of internal pricing strategies, improved product mix, and a higher gross margin profile from acquired businesses. In summary, first quarter supply remained tight while product demand was strong. We increased organic sales significantly, and acquisitions contributed additional growth. We achieved robust gross margins to accompany that sales growth. At the same time, operating expenses remained well controlled across the organization, falling as a percentage of sales. These factors all combined to drive record quarterly profit, with profit per share up over 200% to $0.83, and adjusted EBITDA up 210% to $80 million. It was an excellent first quarter for HDI. I'll return later to talk more about our outlook. However, I'd like to now pass the call over to Faiz to review the Q1 2022 financial results in some more detail. Faiz? Thanks, Rob, and good morning, everyone. I'm going to provide an overview of our results for the first quarter of 2022. I'll also outline our financial position and capital allocation plans. Again, I'll remind those listening that all dollar figures Rob and I use today are in US dollars unless we've stated otherwise. Starting with consolidated revenue, our Q1 sales were $644.9 million, which was an increase of 122% or $363.7 million from Q1 in 2021. Focusing in on our organic sales, as Rob mentioned, market demand remained healthy and supported higher unit volumes and higher product prices. Organic sales accounted for $114.7 million and 39.4% of the sales growth, and acquired businesses contributed $245.4 million or 84.3% of our year-over-year growth in sales. The acquisitions-based sales growth is comprised of contributions from Mid-Am of $52.5 million, representing seven and a half weeks of their results, and $192.9 million in sales from Novo. Our U.S. operations generated Q1 sales of $591.2 million, which was 134% higher than Q1 of last year. US-based sales increased by $338.9 million, with organic sales growth accounting for $99.9 million or 39.6% of the sales growth and acquired businesses accounting for the remaining $245.4 million of the total sales growth. These sales gains were partially offset by $6.4 million reduction in sales related to the divestiture of our HMI business in Q1 of last year. Our Canadian operations made strong contributions in Q1 as well. Canadian sales for the first quarter of 2022 rose by CAD 18.8 million, which was a 38% gain compared to Q1 in 2021. This result was entirely driven by organic growth. Turning next to gross profit, we posted a 155.3% improvement to $ 147.8 million in Q1 of 2022. This substantial growth was supported by our record sales results, contributions from Novo and Mid-Am, and the delivery of a strong gross profit margin percentage. Our Q1 gross margin of 22.9% is 300 basis points higher than the level we posted in Q1 of last year. This result reflects an increase in selling prices without a corresponding increase in costs, changes in sales mix, successful execution of our internal strategies, and the inclusion of Novo and Mid-Am's higher margin product mix in the first quarter. Our operating expenses for Q1 were $ 84.8 million, which were $ 45.8 million higher than the first quarter of 2021. The increase in operating expenses primarily relates to the operations of Novo and Mid-Am, which accounted for $35.3 million of the increase. We also incurred an additional $6.6 million related to investments to support our growth and amortization of intangible assets which were acquired in the Mid-Am and Novo transactions of $4.1 million. As a percentage of sales, operating expenses decreased to 13.1% as compared to 13.4% in Q1 of 2021. Moving now to adjusted EBITDA, for Q1 2022, it climbed 210% year-over-year to a record level of $79.8 million. As a percentage of sales, our Q1 adjusted EBITDA margin was 12.1%, a significant improvement from the 8.6% adjusted EBITDA margin posted in Q1 of 2021. We continue to benefit from the operating leverage available across our expanded platform as we grow our profitability. Q1 profit of $ 43.5 million represented a 235% year-over-year growth rate, and our per share profit climbed to $ 1.83, an increase of over 200% from $ 0.61 per share posted in Q1 of 2021. Turning our attention to the balance sheet. As of March 31, 2022, our leverage ratio, which is the ratio of our net bank debt to adjusted EBITDA after rents, was 3.3x. We remain well within leverage and interest coverage ratios required by our current debt facilities, and we continue to expect our leverage ratio to be comfortably below 3x by the end of 2022, notwithstanding the impact of potential future acquisitions. The end of the first quarter was significant, unused borrowing capacity of $170 million. Our capital allocation priorities are focused on responsible management of our balance sheet, growth, both organically and through accretive acquisitions and providing incremental total returns to shareholders through our dividends and share repurchases. With that, I'll turn the call back over to Rob. Rob? That's great. Thanks, Faiz. I'll finish our prepared comments this morning with our views on end markets and our strategy to continue to build the long-term value of HDI. From a demand perspective, our customers today continue to be very busy. While interest rates have increased in recent weeks and are expected to rise further as central banks work to slow inflation, mortgage rates remain well below their historical trend, and demand for housing continues to significantly outstrip supply in the markets we serve. On a multiyear basis, we believe that there are longer-term structural tailwinds that our business will benefit from. These include. Supply is materially constrained. There's a severe housing deficit driven by 10 years of under-building, resulting in a shortfall estimated to exceed 3 million units. We supply products to an essential area of the economy, including residential construction, repair and remodel, and numerous commercial applications. Our customers are the backbone of the U.S. construction industry and include industrial manufacturers, pro dealers, and home centers. Savings rates spiked during the pandemic. Individuals have disposable income to spend against home and R&R projects. Increasingly, intergenerational wealth transfers is also a helpful source of capital. Millennials are the largest segment of the population, and they're in peak home buying years. Home equity levels are at all-time highs, providing liquidity to fund housing expenditures. The age of homes in the U.S. is also at an all-time high, requiring R&R spending to maintain them. For these reasons, we remain bullish on the demand outlook for our products and continue to see that activity today. However, in the event that an economic downturn were to emerge, it's key to understand the downside strengths built into our business model. From a financial standpoint, we maintain a strong balance sheet, which provides significant financial stability. Our business model converts a high proportion of EBITDA to operating cash flows before changes in working capital. Importantly, our operating track record shows that during periods of reduced economic activity, we naturally release working capital investment, resulting in an additional source of cash. I would also highlight the following characteristics of the business profile of who HDI is today, which provides stability benefits in all market cycles. Ours is a business that is diversified by customer and supplier. We maintain 86 locations across North America, limiting our geographic exposure to any one region. We sell a diverse and specialty product set with no one product category exceeding 20% of our sales. We maintain a strong balance sheet and generate significant cash flow as noted. The company has strong growth prospects, both organically and through our acquisitions program. The architectural building products market is fragmented, and there remains significant market share for us to capture. The management team has a long tenure with a proven track record of performing in varying market cycles. We have a consistent track record of growing the business profitably. Our total shareholder returns have generally outpaced the TSX and S&P/TSX SmallCap Index. I'll close my opening comments by acknowledging that despite our positive outlook and business profile, as I've just outlined, our stock price and valuation has traded downwards recently. This is consistent with the broader trend we've all seen in the stock market. In light of this, we believe that the market price of HDI's common shares may not reflect the underlying value of the company. In March and April, we repurchased 57,000 common shares for CAD 2 million. We intend to continue to actively assess share repurchase levels as an important component of our capital allocation plan going forward. With that, I thank you for your time this morning. I'm gonna ask our operator, Christina, to please provide instructions for the Q&A period. Christina? Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll take our first question from Meaghen Annett with TD Securities. Thank you. Good morning. Just starting off with the organic sales growth in the quarter, could you break out pricing gains versus volume growth there? If you could also update us on what you're seeing in terms of pricing across your products today, that would be helpful. Hey, Hamir. Good morning. It's Faiz here. I can take the first part of your question in terms of our results and our sales growth and how much of that was pricing versus volume. Just a quick reminder, I know some on the call will be familiar, the pricing versus volume question's a little difficult with our business just given the number of SKUs we sell and what we sell being a specialty product, and then because it's a regional business, even for same or similar SKUs, we could have different pricing in different regions. Because we're not selling a uniform product, it's not really a simple exercise, but we do have an estimate of that I can share with you. If we look at our growth in the first quarter, we think a majority of that was price-driven. We did have some volume gains, but I would say more price than volume. I'll turn it over to Rob for the second part of your question. In terms of product categories, I'll touch on a few, and you may wanna reference like the product portfolio from our investor presentation. Generally, I would say that from a domestic sourcing perspective, things remain, you know, relatively tight from a hardwood lumber, hardwood plywood, and composite product category perspective. Same would be true for doors. I would say better supply-demand balance in moldings and also in some of our offshore hardwood plywood product categories. And then stair parts remains, you know, reasonably tight as well. I mean, I guess the comment I would make is when you look at the comps in the M&A, that's obviously year-over-year, and prices are up significantly Q1 this year versus Q1 last. As between Q4 and Q1, we've generally seen, as an overall statement, prices finding a little bit more stability. They're not contracting, but they're not going up at the same rate that we saw last year. Thank you. In terms of the M&A pipeline, are you seeing any shift in the available opportunities, more or less opportunities than six months ago? With the access to expanded addressable markets, are you in a position today to give some color as to the size and scope of the opportunities in the pipeline? Think about. I guess I'll first deal with the availability shift. There's still very good volume of potential candidates that are on the market. We got a whole lot of M&A done last year, as you know. We're being quite selective, but we are still, you know, actively looking at opportunities and ones that fit well with the strategy and that we feel are well priced, we will still be in the market for. In terms of access to addressable market, you can think of that in two buckets. One is the traditional industrial customer base that the companies had. That is numerous. There's, you know, hundreds of names in that pipeline, and they generally tend to be smaller to mid-sized. We like those. They're good tuck-ins, and they can be very good strategic adds on a geographic basis. On the home center pro side, which is where Mid-Am and Novo live, yes, we've got a very good handle on, you know, the opportunity set that's in that market. Those tend to be, I would say, fewer number names than you would see on the industrial side and generally a little bit larger in scale, but there's also good opportunity there as well. Thank you. I'll pass the line. Thanks, Hamir Patel. Go to our next question from Jeff Fenwick with Cormark Securities. Hi, good morning, everybody. Guys, I just wanted to start my questions with working capital and inventory in particular. You know, you've called out you're continuing to carry a bit higher level of overall inventory just to make sure you can meet that demand. Any sense here of like when that might start to ease? I mean, if you work that lower, obviously you could free up quite a bit of cash for the business. What's your positioning as we sort of head into the summer season? Yeah. Good morning, Jeff. The demand is there, so it's what you've said. We've wanted to make sure we've got sufficient product to meet the needs of our customers, which has been, as I said earlier, robust. I do see that, you know, kind of plateauing. We're in terms of the inventory, not the demand at this point, we're in a very good position with what we've got today. We are carrying more than we traditionally would because of fragmented supply chains, so that's a deliberate decision to do that. But I do think that we're kind of in good shape, and I would expect that we'll, you know, that's gonna plateau and we're gonna start to bring that down and see release in the second half. Great. I, you know, I think I asked that question to you in terms of, you know, freeing up the cash and prioritizing paying down debt. I mean, you're in a period now, obviously, where very favorable conditions and a lot of cash flow. You know, what's the prospect of maybe delevering a bit faster? You're suggesting the sort of targeting just below three by the end of the year or comfortably below three. How do you think about prioritizing, you know, cash flow in the business? Yeah. You know, as you just identified, that working capital piece is a component, you know, to that, in terms of pace of delevering. I feel like we have quite good control over that. That is a lever that we can kind of pull. But in terms of the overall cash usage, you know, we're consistent with where we've been in the past. We'll fund the business and the working capital needs, but as I described, we see, you know, pulling some dollars out of that, as opposed to investing more as we move through the year. We are gonna look at acquisitions that are available to us, but I would say we're gonna be quite selective. We do have an eye on releasing some cash and paying down debt, and we think that's prudent in the certainly higher, you know, uncertainty we've just got in the market today. The other piece is the share repurchases. We did activate that, as I mentioned in my comments in March and April, and we think the current share price is dislocated and not representative of the value of the company. That'll also be part of the thought process. Okay. Maybe just one on pricing. You know, I think what we've seen through the cycle here is just how quickly those prices have moved higher across many of the products that you're distributing. What are your thoughts around prices beginning to move lower? Like, what would it take for that pressure to abate? And do you think the pricing could move lower just as quickly as it went up? Or is it more likely to be a bit more of a gradual drop off? Yeah. I'm always cautious of anyone who says they know the future, so these are just my own views. I think that if you look structurally at the market, the degree or the lack of supply in housing is relative to the demand that is there, is substantial. We recognize, you know, some of these potential demand dampeners, higher inflation and mortgage rates, conflict in Ukraine. You know, our view is that's not gonna wash over this underlying deficit in people's needs for housing and shelter and all the products that we supply that go into that. You know, we continue to think that if there is going to be a price reduction, you know, it shouldn't be severe. Think more rolling hills than peaks and valleys. Can there be a pullback in product pricing and categories over time? You know, of course. What we've done is really try to diversify the business in terms of the product portfolio we participate in, to provide more stability, to that. Then you've seen how we execute within whatever market conditions do come to us. We think we can put good points on the board really, you know, regardless of cycle. Okay, thanks for that color. I'll queue. You got it. Again, as a reminder, if you would like to ask a question, please press star one at this time. Again, that is star one for questions. We'll take our next question from Zachary Evershed with National Bank Financial. Good morning, everyone. Congrats on the quarter. Hey, Zach. Q2 usually sees a seasonal uptick in revenue quarter- over- quarter. Given the strength that we saw in Q1, though, do you expect the usual pattern will still hold true this year? Yeah, seasonality's been more muted and less predictable as of late. I mean, look at our Q4. We really didn't see the diminution we would typically see in Q4. You know, Q1 was very strong. I think it's hard to say what Q2 will precisely bring. You know, if we saw a more muted seasonality pattern than maybe in the past, that wouldn't surprise me. We're already operating at a very high level. That makes sense. Are you seeing any signs of overseas logistics untangling or freight costs easing in your plans? It's still pretty competitive out there, to be honest, and there's multiple points of delay, you know, whether it's overseas production, getting product to ports, warehousing at port, then getting it loaded, takes longer to get here. Takes longer to unload and then, storage facilities on dock in North America are also tight. That is actually a contributing factor to, you know, the extra inventory dollars that we've not just chosen to hold, but have had to hold because the import supply line is just elongated today relative to where it was, previously on freight. We're not seeing a lot of relief at this point, Zach. Great color. Thanks. Last question. Are you getting a better sense of what you'd consider a sustainable gross margin level? Hey, Zach, it's Faiz Karmally. Good morning. I can take that question. I don't have a number for you. But the way I would describe it maybe is the things that we've talked about that are impacting gross margin, and there's a number of them, and we've talked about some being transitory and others not. Maybe I'll stick with the ones that are a little more transitory. I mean, they're still strong and impacting our business. You saw our gross margin of 22.9% in Q1. It was pretty close to our trend over the last couple of quarters. I think we've talked about that as, you know, settling higher than our traditional, you know, sort of a couple years ago, you might remember the 19% was sort of the plus or minus. It's gonna settle higher than that. Would it stay at these levels? I'm not sure. I certainly think it's within that range still. That's how we're, you know, kind of approaching it today. That's helpful. Thanks. I'll turn it over. Once again, if you would like to ask a question, please press star one at this time. Again, that is star one for questions. It appears there are no further questions at this time. I'll turn the call back for any additional or closing remarks. I think that's it for today. Faiz and I are always available for follow-on questions to reach out if you've got one. Other than that, we'll put a wrap on it, Christina, and thanks everybody for joining the call today. Concludes today's call. Thank you for your participation. You may now disconnect.