Good morning, ladies and gentlemen, and welcome to the ADENTRA Q4 and full year 2023 results conference call. Note that at this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session, and if at any time during this call you require immediate assistance, please press star zero for the operator. Also, note that this call is being recorded on March eighteenth, 2024. Now I would like to turn the conference over to Ian Tharp, Investor Relations. Please go ahead, sir. Thank you, Sylvie, and good morning to those joining today as we discuss ADENTRA's financial results for the fourth quarter and year ended 2023. With me on the call are Rob Brown, ADENTRA's President and CEO, and Faiz Karmali, Vice President and CFO. ADENTRA's Q4 and full year 2023 earnings release, financial statements, MD&A, and other year-end filings are available on the investors section of our website at www.adentragroup.com. These statements have also been filed on ADENTRA's profile on SEDAR+ at www.sedarplus.ca. I wanna remind listeners that management's comments during this call may include forward-looking statements. These statements involve various known and unknown risks and uncertainties and are based on management's current expectations and beliefs, 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 ADENTRA's earnings press release and financial filings for a discussion of the risks and uncertainties associated with these forward-looking statements. All dollar figures referred to today are in US dollars, unless stated otherwise. I'd now like to turn the call over to Rob Brown. Thanks, Ian, and good morning, everybody. Thanks for joining us this morning as we report our results for ADENTRA in 2023. I'll start today with our key financial and business highlights for the year. Faiz Karmali, our CFO, will then provide details of our Q4 financial results. I'll finish off our prepared remarks with our outlook for 2024. We had a strong finish to the year with fourth quarter sales of $515 million, adjusted EBITDA of $44 million, and adjusted earnings per share of $0.46. Recall that our sales through the first nine months of 2023 were down 14% when compared to the same period in 2022. In the fourth quarter of 2023, our sales were down 10% as compared to Q4 of 2022, an improvement as compared to the trend through the first nine months of the year. The fourth quarter and our full year results were supported by the scale and diversity of our platform. We operate a geographically diverse network across North America, participating in multiple end markets, including residential, repair and remodel, and commercial construction. We sell into varied customer channels, including industrial manufacturers, home centers, and pro dealers. We service our customers with a broad mix of specialty building products. While our 2023 results did not match the record-breaking performance of 2022, which benefited from unusually strong demand and tight supply, our platform led to stable quarter-to-quarter sales and gross margin on a sequential basis through 2023. As it relates to gross margins, I'm pleased with our success in maintaining gross margins consistently above 20%, even as we reduced our inventories by over CAD 120 million during the year. We've now delivered 11 consecutive quarters with gross margins above 20% and believe we have established a new sustainable level of profitability for our business. Higher gross margins are supported by expanded access into the pro dealer and home center channels through our acquisitions of Novo and Mid-Am. Growth in our higher value product mix, supported by our global sourcing program. A product portfolio that includes a selection of higher margin, ready-to-install products, such as pre-hung doors, stair part kits, and molding solutions, and the use of data analytics in our digital platforms to deliver strong asset management and pricing discipline. I'm also excited about the progress we've made in our digital engagement strategy. A key component of this strategy are e-commerce sales, which account for 20% of our revenues. This represents significant progress from zero just a few years ago. We strongly believe our digital strategy will enhance long-term customer loyalty, increase customer order sizes, and support our sustained delivery of strong gross margins. The sales and margin performance, combined with tight management of operating expenses, led to strong operating cash flow before changes in working capital of $118 million. Our business model also realizes cash from the release of working capital in slower economic periods, and this generated an additional a $120 million in operating cash flows in 2023. We primarily used these cash flows to reduce our debt by over $223 million and bring our leverage ratio to 2.7 times at year-end. The leverage ratio remains well within our target range. We also returned a total of $17.8 million to shareholders through share repurchases and dividends. Approximately 2% of our issued and outstanding shares were repurchased, and we paid $8.6 million in dividends in 2023. With the 8% increase in our dividend announced in Q3, we've now increased our dividend a total of 11 times in as many years. We believe that despite challenging market and economic conditions in 2023, our business demonstrated important stability and performed well. I wanna thank the entire ADENTRA team for the dedication and persistence that drove this performance. I'll now pass the call to Faiz to provide details of our Q4 financial results. Then I'll return to speak more about our outlook following that. Faiz? Thanks, Rob, and good morning, everyone. I'm going to recap our financial results for the fourth quarter of 2023 and outline our financial position at year-end. Again, I'll remind those listening that any dollar figures Rob and I use today are in US dollars, unless we've stated otherwise. Starting with consolidated revenue, we generated sales of $514.9 million in Q4, which was a decrease of 10.4% or $59.9 million compared to the fourth quarter of 2022. The decrease primarily relates to product price deflation, while unit volumes remain generally stable as compared to Q4 in 2022. Q4 sales were not significantly impacted by foreign currency translation of our Canadian sales into US dollars for reporting purposes. Sales in our US operations were $476 million, with this 10.7% decrease compared to 2022, mainly the result of product price deflation. Our Canadian operations posted Q4 2023 sales of CAD 53 million, which were 7% lower than Q4 sales in 2022. The change was primarily due to product price deflation, offset by a modest increase in volumes. Turning to gross profit, we earned $111.4 million in the fourth quarter, a 4.1% decrease as compared to Q4 in 2022. This change reflects lower organic sales and was offset by a gross profit percentage of 21.6%, which improved on the 20.2% gross margin posted in Q4 of 2022. During Q4, we recorded inventory write-downs totaling CAD 2.4 million, a substantial decrease compared to the CAD 7.5 million we incurred in Q4 of 2022. Our operating expenses for Q4 were CAD 86.1 million, a CAD 5.5 million reduction compared to Q4 of 2022. The reduction in expenses relates mainly to lower staffing costs, including lower variable compensation and also lower premises costs. Moving now to Adjusted EBITDA for Q4 2023, it was CAD 44.5 million, a 2% increase over the fourth quarter of 2022, with the increase largely driven by the CAD 5.7 million reduction in operating expenses and partially offset by the reduction in gross profit dollars of CAD 4.8 million. Finally, profit in the fourth quarter was $9 million, a decline of $4.4 million from the $13.4 million we posted in the same period last year. The change was driven by a $6.4 million increase in income tax expense, $0.8 million in additional depreciation and amortization expenses, and partially offset by the $1.5 million increase in EBITDA and a $1.3 million decrease in finance expenses. On a per share basis, adjusted profit per share was $0.46, as compared to $0.66 in the same period in the prior year. Looking at our cash flow position for the fourth quarter, we generated $56.5 million of cash flows from operating activities. This was comprised of $37.6 million of cash flow from operating activities before changes in working capital and another $18.9 million from reductions in working capital during the period. Moving next to our balance sheet. Our cash flow generation in Q4 enabled us to reduce debt by a total of $42.9 million and a total of $223.9 million for the full year ended December 31, 2023. We ended the year in solid financial position with a leverage ratio of 2.7 times and unused borrowing capacity of over $450 million, which gives us the flexibility necessary to manage any short-term headwinds, fund future growth, and continue to advance our business strategies. Our capital allocation priorities remain focused on responsible management of our balance sheet, funding our growth both through acquisitions as well as organically, and providing incremental total returns to shareholders. With respect to returns to shareholders, and as Rob referenced earlier, through a combination of dividends paid and share repurchases, we returned a total of $17.8 million to shareholders in 2023. With that, I will hand the call back over to Rob. Rob? Thanks, Faiz. I'll conclude my prepared remarks today with our outlook and details on our strategy to continue to build the long-term value of ADENTRA. As we advance through 2024, we expect that inflationary pressures, as well as elevated interest rates, will continue to impact economic activity. And while we've seen sales volume stabilize in the fourth quarter and into early 2024, we continue to see some softness in product pricing. We expect residential construction to show stable levels as compared to 2023, and stable to lower levels in the repair and remodel market. These segments each represent approximately 40% of our annual sales. Against this backdrop, we expect Q1 sales to be lower than Q1 of 2023, with higher volumes being offset by lower product prices. We anticipate that year-over-year sales comps will improve in the latter half of 2024. Our outlook is for modest growth in 2024, Adjusted EBITDA, through our focus on strong gross margins and disciplined operating expense management. There continues to be much speculation regarding when the Fed and the Bank of Canada might consider loosening interest rates, which could provide a boost to construction markets after an extended period of rapid tightening to combat inflation. While we can't predict that, we remain confident that our business is well positioned for the long term. We remain confident that our business is well positioned to capitalize on the fundamental demand drivers in the repair and remodel and residential construction markets. These drivers include an aging U.S. housing stock, positive demographic factors, strong home equity levels, and the continued under-building of homes in both the United States as well as Canada. Through our success in expanding our product categories, customer channels, and end markets, we have access to a significant addressable market of $43 billion, and we estimate our current market share to be approximately 6%. We see attractive new growth prospects and potential to expand our market share going forward. Our strategy to achieve this was described at our Analyst Day in December of 2022, where we disclosed our goal of achieving $3.5 billion in run rate sales by 2026. Having managed our way through the recessionary environment of 2023, and with our expectation of flat market demand in 2024, we've reset the target date for our plan of $3.5 billion in run rate sales to 2028. The other key metrics underpinning our plan have not changed significantly from what was laid out at our Analyst Day, and we are optimistic about achieving our targets going forward. With that, I want to thank you for your time this morning. I'll turn the call back to Sylvie, to provide instructions for the Q&A period. Sylvie? Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request, and if you would like to withdraw from the question queue, simply press star followed by two. And if you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star one now if you do have any questions. And your first question will be from Ariana Milot at CIBC. Please go ahead. Hello, good morning. In the second half of 2023, you experienced low double-digit price deflation. So when do you expect to lap negative pricing comps? And have you seen prices begin to stabilize on a sequential basis or in certain product categories? Yeah, So, yes, and Faiz we may do some tag teaming today, but I guess the comment I would make, Ariana, is that we've seen the rate of price deflation, sequentially, diminishing. So I've made the comment earlier that we thought that that would, you know, slow down and stabilize, and I think that's, that's still our view as we move through 2024. But, certainly, you know, in terms of, of lapping comps, as we said in our outlook statements, we anticipate, you know, getting into sales, some positive sales comps in the latter half of, of the year. Okay, great. That's thank you. That's helpful. Thank you. And then turning to the M&A side, how robust is the pipeline right now? Yeah, I mean, we feel really good about what we've got in the pipeline. You'll recall, you know, it's fully staffed in terms of we have a full-time Senior VP that looks after the pipeline, very experienced, been in place for many years. And while 2023 was a relatively quieter period, simply because we wanted to generate cash and focus on debt repayment, we weren't ignoring the pipeline in that period. We did a lot of very good work in terms of relationship management and outreach. So, you know, we feel good about getting some deals done, and with where the balance sheet's now positioned, we think that that's very realistic for 2024. Okay, great. Thank you. That's all I have for now, so I'll get back in the queue. Thanks, Ariana. Next question will be from Yuri Lynk at Canaccord Genuity. Please go ahead. Good morning, and congrats on a great quarter. Thank you. So just on the outlook, you're calling for a modest EBITDA improvement in 2024. Just trying to piece the moving parts, as I believe Q4 EBITDA is the strongest we've seen for a fourth quarter despite the sales decline. So could you perhaps provide some color on what you could expect in the first half of 2024 margin wise, vis-a-vis the fourth quarter margin strength? Yeah, we, I mean, we've kind of got a couple data points out there. We've said over the cycle, our goal is to be at a adjusted EBITDA margin of 10%+. We feel like we're making very good progress toward that. We've been in, obviously, the lower part of the cycle. So the EBITDA margin you saw for fourth quarter, we feel really good about, despite having still experienced product price deflation. You know, the key for us will be the gross profit margin. That was very strong in the fourth quarter as well. We've mentioned we've comfortably established that above 20% going back almost 3 years now. As we look at making the statement that we made, which we expect some modest growth in EBITDA in 2024, that is just predicated on continued gross profit margin performance and controlling expenses. And then, you know, we all understand how the leverage works through distributors' balance sheet. It's getting back into some top line sales growth, which we've indicated is more latter half of 2024. That's, that's good color. Thank you. And I'll just take a second one in. You quote your global sourcing business as one of the drivers of the margin performance. So I was just wondering, bigger picture, where the proportion of import products stands after the last few years of supply chain disruptions, and how much more room do you see there to grow on that front? So, yeah, our import business today is, you know, roughly a third of the products that we sell are sourced outside North America. That's predicated on finding very strong partners overseas and doing all of the compliance and quality control work that makes us comfortable partnering with those mills. I think it's in quite a good place today in terms of the mix of domestic versus import. We do like the margins that imports bring, but also with the reminder, it's a longer supply chain to your comment, so we need to be paid for that in terms of just a little bit extra working capital that goes a longer supply chain. Okay. That's very helpful. Thank you. I'll turn it over. Thanks, Yuri. Next question will be from Ian Gillies at Stifel. Please go ahead. Morning, everyone. Hi, Ian. With respect to the digitization strategy, can you talk at all about how you think that's going to ultimately manifest itself in inventory management and maybe getting days down there even further than you've been able to do historically, and how it helped margins and, and maybe how you're going about sourcing the products to help implement some of this digitization? Yeah. So I think it's an important topic. We obviously mentioned it in the annual report, and I included in my comments. It's an important part of our strategy. People typically associate digitization with e-commerce, and they're not the same thing. E-commerce is a portion of digitization, but we do have digital engagement strategies as it relates to, you know, our employees, our suppliers, and our customers. We're very much focused on the customer at the moment. And, the e-commerce piece, as I mentioned, is important because it just increases customer loyalty and makes it easier to do business with, you know, the omni-channel type approach, which in our industry, I would say is maybe not as rapid as in other industries. But you're right, it can help with other areas in terms of, you know, intelligent use of data. You mentioned asset utilization, so days on hand, yes, we are absolutely continuing our digitization push as it relates to how can we be more efficient with reorders, with truck routing, with sharing inventory between locations. All those things fall under... You know, I think previously we've talked about computerization, and now we're moving towards, you know, more intelligent use of the data that we've got. So, I could go on at length, certainly on the digitization topic. I'm glad you picked up on it, but it is... It's more than e-commerce, and it is kind of all-encompassing. We believe over the next number of years across our business, asset management, customer, interaction, margin management, pricing, all, all those things fall under that umbrella. Got it. Maybe moving along the same lines, but a bit differently, where do you think you're at in addressing the potential to use automation in your distribution centers as a way to improve productivity? So the thing about the business model that we have is we are a one-stop shop for architectural building products, which means we have things that are all different shapes, sizes, weights, and require much different storage and picking solutions when you're building an order for a customer. That makes warehouse automation more challenging to do compared to, say, a company that is involved with a homogenous product that, you know, is very UPS-able or in, you know, in squares. We have things that are very long and get cut up as part of woodworking. So in terms of how we make for more efficient warehouses, you know, a lot of that is really around picking, building orders and route planning, and the use of equipment that we have for moving around. But if you were to walk through a warehouse today, you're not gonna see a lot in terms of, you know, auto pick and computers, you know, running about collecting inventory, just because of the characteristics I described. Okay. And if separately, if I can sneak one last one in, and maybe for Faiz, but I noticed in the goodwill impairment note that you've expanded the high end of the gross margin range there to 25.5% from 23%. I'm curious on that: has something materially changed in the business where you guys feel more comfortable about the upper, upper end of the target, for where the business could be, or am I just reading too much into it? Hey, Ian. Yeah, I can take that one. Probably, I wouldn't read that much into it. I think the disclosure you're referring to there talks about the gross margin assumptions we use over a 5+ year period when we're valuing the goodwill. And it's a build up of a number of different business units, because the goodwill relates to several acquisitions. So, you know, one of the things... You know, some of the things you've heard us talk about in this call as it relates to what Rob just described, whether it's over time, how we manage the business. You know, you brought up things like over time, doing better on inventory turns. We talked about our digitization strategy. I would say over time, all those things we expect to have some improvements on margin. And so, you know, that's us taking a view 5, 7 years down the road. So it's aspirational, it's a forecast. I probably wouldn't read too much more into that than what I've, you know, what I've just described. Okay, thanks. That's helpful. I'll turn the call back over. Thanks, Ian. Next question will be from Zachary Evershed at National Bank Financial. Please go ahead. Thank you. Good morning, everyone. Congrats on the quarter. Morning, Zach. Morning. Could you go into a little bit of detail about the mechanism that resulted in the revenue increase the duties after the final determination in July versus what you guys accrued? Yeah, it's Rob. I, I'll speak to that. So the estimate that we made in July, we booked just, just under $16 million related to the duties. We still think that's a good estimate. You know, the updated disclosure is just an acknowledgement that we started to receive demands for payment in Q1. And we've actually received, you know, slightly above our $16 million, not, not materially so. We need to do more investigation on those. We think some of those are incorrect. But I mean, it's very much in line with where we thought it would be back in Q3. Gotcha, thanks. And, we know you'll be challenging all of it in court, but is there a chance you get a higher total bill than what we've seen so far, as more continues to trickle in? I mean, that's not our expectation. We think it's fairly clear when we read the final determination, what our bill should be. So, you know, I don't have an expectation of that, but it is, you know, it's trade case, and we're, as you mentioned, gonna spend our time trying to reduce that number as we can, because we disagree with it. Definitely. Thank you. And so you guys, you guys have pretty bullish guidance in terms of what you're hoping for for the full year. How do you feel that squares with the big box retailer guidance for small declines? Yeah, I mean, we've said that we've got some tougher sales comps in the first half, and, you know, we kind of get into something better in the second half. But it's really also a function of continued strength in our gross margin while controlling our costs. As we make those statements, you would hope and expect we do our own build ups around what we think is happening in single family versus multifamily, and then what's happening in R&R, and, you know, weigh those against our relative participation in those end markets to arrive at the statements we put out. And, you know, on the R&R side, we've said that's stable to down slightly. I think that squares reasonably well with what the home centers are saying with, you know, low to mid single digit declines. The millwork aisle, which is the aisle that we participate in, tends to perform, you know, maybe a little bit more stably. When you think about those home center, big bumper sticker numbers, they include a lot, a lot of different things. So we're, you know, angling our assumptions obviously towards the product categories we participate in. Perfect. Thank you. And then just, just one more. As you look at the pace of pricing and where your inventory sit today, what do you, what do you foresee for Q1 and for the year as a whole for your inventory position? ... Hey, hey, Zach, it's Faiz here. I can take that. So from an inventory position, the way we ended 2023, I would describe our inventory fairly well matched to sales pace. You know, the excess inventory we talked about this time last year, that we've moved through all of that, that's all been moved through. We did most of that work in the first six months of last year, actually, maybe a little bit in Q3. So we ended the year just under 80 days of inventory is the way to think about it. You know, at the sales pace I described coming out of Q4, I wouldn't anticipate us adding a bunch of inventory. Now if sales do a little better, maybe you're adding a little bit, but at the same time, I also think we can do a little better on inventory days. Again, you know, earlier in this call, I think a question Ian had, which Rob was responding to you, around some of the things we're doing to continue to be more efficient with our asset base. We'll see some benefits of that this year. So, you know, I could see that 80 days maybe coming down a little. Maybe at the same time, you're investing a little bit in inventory, you know, in the latter half of the year, particularly when the sales comps are expected to improve, as we, as we've said. So overall, I, I'm not expecting big, big shifts in inventory throughout the full year. If it plays out as we've, you know, as we've highlighted in our, our outlook, I think it's well positioned. You might see some plus minuses as we go through the year in terms of just, timing. But ending the year, again, if it plays out as we've highlighted in our outlook, I think we're positioned well, heading into the year for inventory for 2024. Your comment on pricing, the inventories are priced fine today. You know, the price deflation, I would mention, you know, we've experienced that now for a number of months, but it's been quite orderly month to month, and so we've really been able to manage our average costs around that. That's partly why you've seen the gross margin percentage continue to be quite strong, because we've been able to manage around that, you know, again, that kind of predictable, modest price decrease every month. I think the inventory is well positioned. Great color, thanks. So just to confirm, is that pricing still under pressure month by month in 2024? Yeah, through the early part, I would say no big change in trend. A little bit of modest decrease month-on-month. Great color. Thanks. I'll turn it over. Thank you. Once again, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. And your next question will be from Jeff Fenwick at Cormark. Please go ahead. Hi, good morning, everyone. So just I wanted to ask about uses of capital this year and prioritization. Obviously last year, a lot of headway in terms of paying down your debt. When I look at the business stabilizing and maybe getting some better margin this year, still a pretty high level of free cash flow and continuing to delever, I would imagine. So is the focus here continuing to pay down debt, or how would you sort of allocate those dollars across debt repayment, share buybacks, and M&A? Hey, Jeff. Good morning. Oh, Faiz here. I would say on the capital allocation, short term, short term goal, I mean, the, the capital is gonna go against debt. That's just naturally the place to put it until you do an acquisition. On the share buybacks, that's been more opportunistic in the past, but I would say it's not the focus today. The focus is really continue to delever, as you noted, which you're quite right. We'll do that, you know, over the course of the year, absent an acquisition, you know, we would go from a 2.7 to something in the low 2s, so maybe more the bottom end of our range. And then to keep our dry powder ready for executing on, you know, on acquisitions. As was mentioned, we've done a lot of good work on the pipeline in the last twelve months, and there may be opportunities that we can be active on this year, and so we wanna be ready to, you know, to execute on that. That would really be the focus as well. Okay, great. That's helpful. And then, I wanted to shift topics here onto gross margin, and as you've highlighted a few times, you know, successfully keeping it over 20, it's actually been trending over 21. What are some of the factors there we should be mindful of as we look forward into the year? And I'm just trying to think whether 21 is maybe the better number than 20 at this point, and are the things in the mix right now that are maybe in flux, or are there other cost inputs that may change over the year, that kind of change that target level? You know, any sort of color there will be helpful. Hey, it's Rob here. So, you're quite right. We're not quite ready to put a new pin in the board at 21. So, you know, we've said we drew the line at 20. Let's establish ourselves there, and we feel really good about having done that. You'll recall historically, this was an 18-19 business. The factors that have us there, you know, there's nothing I would call out that I think is different. You know, it's the businesses that we've added, it's the continued movement, and that we've added in terms of acquisition. It's the continued movement of our product mix towards branded and specialty products that carry higher margins. It's the appropriate use of imported products to augment the domestic products that we sell. It's we're getting, I would say, smarter with pricing and more sophisticated in terms of stratifying the SKUs that we sell and understanding which are more price sensitive and which are less. So, you know, it's not any one factor, and none of those factors I just mentioned are we taking our foot off the gas. We would like, you know, over the long term, to be able to continue to build off where we are, but for now, it's, you know, we've just navigated through a very difficult market in 2023. We We like where we're sitting with the margin for now and intend to try to hang on to that moving forward. Okay, thanks for that color. That's all I had. Thank you. Thank you. At this time, gentlemen, we have no other questions registered, so please proceed with any additional comments. Okay. Nice job, Sylvie. Appreciate your help today, and thanks everybody, on the line for attending today. Do reach out to Faiz or myself if you've got some follow-up questions, and have a great day. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines.