Good afternoon, ladies and gentlemen, welcome to the Doman Building Materials Group Ltd. fourth quarter 2022 financial results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on March tenth, 2023. I would now like to turn the conference over to Ali Mahdavi. Please go ahead. Thank you, operator. Good afternoon, everyone, thank you for joining us for Doman Building Materials fourth quarter and full year 2022 financial results conference call. Joining us this afternoon are Amar Doman, Chairman and Chief Executive Officer, and James Code, Chief Financial Officer of the company. If you have not seen the news release which was issued yesterday, it is available on the company's website at domanbm.com as well as on SEDAR along with our MD&A and financial statements. I would also like to remind you that a replay of this call will be accessible until midnight on March 24th. Following the presentation, we will conduct a Q&A session for analysts only. Instructions will be provided at that time for you to join the queue for the questions. Before we begin, we are required to provide the following statements regarding forward-looking information, which is made on behalf of Doman Building Materials Group Ltd. and all of its representatives on this call. Remarks and answers to your questions today may contain forward-looking information about future events or the company's future performance. This information is subject to risks and uncertainties that may cause actual events or results to differ materially. Any information regarding forward-looking statements is made as of the date of this call, and the company does not undertake to update any forward-looking statements. Please read the forward-looking statements and risk factors in the MD&A as these outline the material factors which could cause or would cause actual results to differ. The company will not provide guidance regarding future earnings during today's call, and management does not anticipate providing guidance in future quarterly or interim communications with investors. I'll now turn the call over to Amar. Thanks very much, Ali. Good afternoon, everybody, thanks for joining us on today's call. I'll begin by highlighting some of our key financial metrics, followed by some color on our operations during the fourth quarter. I'm gonna hand the call over to James Code, who's gonna review the numbers in further detail. I'll start by highlighting the efforts of all of our employees across the various business segments during what can be best described as a challenging year with price volatility and a number of macroeconomic headwinds. While I'm pleased with our accomplishments, it's important to look back at the year which started off with the continued and lingering effects of the COVID-19 global pandemic, which thankfully started to wane towards the middle of the year. This transition resulted in a reversion to what we consider a more normal business environment, with the demand for various end markets returning to more historical levels and spending categories. Continuing pricing volatility, combined with the inflationary concerns and increasing interest rates, resulted in fears of a potential recession. The complex landscape challenged our visibility throughout the year, I'm pleased to report that we achieved record sales and overall strong operating results. We were pleased with how our growth strategy continued to unfold, resulting in strong annual sales and earnings while remaining focused on margin protection. Despite the pricing environment and uncertainties caused by macroeconomic forces we faced throughout the year, we maintained focus and discipline on servicing the needs of our customers with the utmost level of quality and service while working through a highly volatile pricing environment for our wood products. In parallel, we continued to optimize our balance sheet by using our free cash flow generation to reduce our debt significantly. This performance, along with our continued fiscal diligence, resulted in a reduction of our net debt by more than CAD 135 million on a year-over-year basis. We remain focused on further opportunities for margin expansion with our ongoing investment on continuous improvement programs. We continue to balance these actions aimed at improving our near-term profitabilities with longer-term decisions to support our growth trajectory and broaden out our market opportunities. Despite our general optimism, we are moving forward cautiously to ensure that we emerge in this period as an even stronger company. Our extended footprint in Canada and the US continues to allow for top-line growth and profitability for the future while we continue to use this platform for incremental and unique growth opportunities. The strength in our full-year results came from the combination of continued strong pricing, albeit with some volatility, robust volumes in all of our markets, which resulted in full-year revenues exceeding CAD 3 billion, representing another new record. Our ongoing cost management and focus on operational efficiencies enabled the company to realize much of the revenue line gains to the EBITDA and bottom lines. We're very proud of the strength of our financial performance and believe that there's a lot to be gained from the strength and momentum which has resulted from our successes in 2022 and particularly in the fourth quarter as we pave the path forward. As a result of these efforts during the fourth quarter, we continued to see robust demand for our product categories, which resulted in our revenues coming in at CAD 573 million, gross margin at 14.3% or CAD 82 million, adjusted EBITDA amounting to CAD 33 million, and our quarterly dividend was CAD 0.14 per share, and it was declared. I believe that's our 55th quarter of dividends. Despite all the challenges we faced in the year, we remain encouraged and enthusiastic with our fourth quarter and full year 2022 results and continue to build on our successes as we look into the future of the company. We were able to deliver these strong operating results with leaner inventory levels in certain categories while continuing to meet or exceed customer expectations of product availability. Looking ahead, we remain excited as we enter the new year. Despite inflationary and interest rate concerns, we have entered 2023 with a position of strength supported by our market position and our strong balance sheet. At the same time, we remain mindful of the macroeconomic environment, and as such, we're taking a conservative approach to full-year planning. We are optimistic about the activity and demand for our products in many key markets on both sides of the border. We have worked and managed through similar cycles and will remain focused as always, to protect and maximize margins while strengthening our balance sheet with steadfast focus on reducing our debt with the strength of our free cash flow generation. With that, I'd like to ask Jay Code, our CFO, to take over and provide a review of the company's fourth quarter and full-year financial results in greater detail, and then we're gonna open up the call for questions from analysts. Thank you. Jay. Thank you, Amar. Good day, everyone. Sales for the year ended December 31, 2022 were $3.04 billion versus $2.54 billion in 2021, representing an increase of $495.3 million or 19.5%. The increase is largely due to this year's full year inclusion of results from our 2021 acquisitions of Hixson Lumber and LA Lumber Treating, which were completed in June of 2021 and consequently included less than seven months of operations in the comparative prior year. Partially offsetting this positive contribution, sales for both the company's legacy and recently acquired operations were negatively impacted by construction materials pricing and shipment volume declines generally experienced after the first quarter of 2022. The company's sales by product group in the year were made up of 76% construction materials, compared to 74% last year, with the remaining balance resulting from specialty and allied products of 21% and other sources of 3%. Gross margin dollars increased to CAD 408.8 million in the current year versus CAD 391 million in 2021, an increase of CAD 17.8 million. Gross margin was 13.5% for the year, a decrease from the 15.4% achieved in 2021, mainly due to the previously discussed construction materials pricing declines experienced after the first quarter of 2022. Expenses this year were $272.6 million versus $219.1 million last year, an increase of $53.5 million or 24.4%. 2022 expenses represented 9% of sales versus 8.6% in 2021. Distribution, selling, and administration expenses increased by $41.6 million or 25.4% to $205.7 million versus $164.1 million in 2021, largely due to additional expenses resulting from the full year inclusion of our 2021 acquisitions. DS&A expenses represented 6.8% of sales in the year, compared to 6.5% in 2021. Depreciation and amortization expenses increased by CAD 11.8 million or 21.5% from CAD 55.1 million to CAD 66.9 million, largely driven again by the full year inclusion of assets related to our 2021 acquisitions. Finance costs for the year were CAD 37.6 million versus CAD 27.1 million in 2021, an increase of CAD 10.4 million or 38.5%. The company incurred additional finance costs due to 2022's full year inclusion of our 2026 unsecured notes, which were issued on May 10th, 2021, as well as higher interest rates on the company's variable rate loan facilities. Our 2022 EBITDA was CAD 203.2 million compared to CAD 220.7 million last year, a decrease of CAD 17.5 million, or 7.9%. EBITDA for 2021 included non-recurring, directly attributable acquisition-related costs of CAD 4.9 million. 2021 adjusted EBITDA before these non-recurring costs was CAD 225.6 million. 2022 adjusted EBITDA was positively impacted by this year's full inclusion of the results from our 2021 acquisitions. As a result of these factors, net earnings in 2022 were CAD 78.7 million, versus CAD 106.5 million in 2021, a decrease of CAD 27.8 million. Turning now to the statement of cash flows. The company generated CAD 222.2 million in cash from operating activities this year, a significant improvement compared to the CAD 49.3 million generated in 2021. The main contributor to this year's improvement was stringent working capital management, partially offset by lower net earnings. Operating activities before non-cash working capital changes generated CAD 138.9 million in cash compared to CAD 163.8 million in 2021. Changes in non-cash working capital items generated CAD 83.3 million in cash compared to using CAD 114.5 million in 2021. The increase in cash generated in non-cash working capital was largely due to management's efforts to reduce inventory volumes in anticipation of potential slowing of market activity, along with the construction materials pricing declines during the current year and its impact on the company's average unit cost of inventory and trade receivables at December 31st, 2022. With respect to financing activities, the company returned a total of CAD 224.8 million of cash to equity and debt stakeholders compared to generating CAD 454.5 million from these activities last year. The main drivers of this significant change being the debt and equity financing activities related to last year's acquisitions, contrasted with this year's focus on stringent working capital management, resulting in substantial net pay downs of our revolving loan facility in 2022. In May of 2021, we issued a five-year 5.25% senior unsecured note for gross proceeds of $325 million in connection with the Hixson acquisition. Scheduled repayments related to our non-revolving term loan consumed $2.7 million, consistent with 2021. Repayment of certain promissory notes consumed $1 million compared to $1.5 million in 2021. Payments of lease liabilities, including interest, consumed $24.8 million of cash compared to $23.6 million last year. The company's lease obligations generally require monthly installments, these payments are all current. This year, we significantly reduced our revolving loan facility by $148.6 million, driven by our positive net earnings and substantial working capital reductions. In the prior year, the revolver increased by CAD 131.6 million, reflecting its utilization to partially finance our 2021 acquisitions. Shares issued net of issuance costs generated CAD 1.3 million of cash this year compared to CAD 82 million in 2021, which included proceeds from our public share offering in support of the Hixson acquisition. The company also returned CAD 48.6 million to shareholders through dividends paid in 2022 compared to CAD 42.6 million in 2021. We updated our dividend policy during the fourth quarter of 2021, resulting in a quarterly dividend increase from CAD 0.12 to CAD 0.14, beginning with the dividend paid on January 14, 2022. The company was not in breach in any of its lending covenants during the year ended December 31, 2022. Investing activities consumed CAD 4.5 million of cash this year, representing purchases of property, plant and equipment, net of proceeds from disposition. Whereas last year, we invested a total of CAD 503.3 million, largely related to consideration paid for our 2021 acquisitions of Hixson Lumber and LA Lumber Treating. This concludes our formal commentary, and we would now be happy to respond to any questions that you may have. Thank you. Operator? Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Yuri Lynk with Canaccord Genuity. Please go ahead. Hey, good morning, guys. Morning, Yuri. Amar, I thought your team did a great job stick handling the commodity price volatility in the quarter to drive really good margins. Any change in how you're handling that? Like, are you using VMI any more than you used to or direct ship or any changes or anything you wanna highlight that can help us better understand the really good performance? I appreciate that. I think, just company wide, you know, as we all got a little nervous watching, you know, the rollercoaster ride of lumber for the past couple of years, we decided to, yes, lean a little bit more on VMI being our consignment inventory, some of our mill suppliers, but we also just sort of bought less, traded faster, and didn't fall in love with anything. We were just going on higher turns, reducing inventory. We started those activities back in March, and they're certainly paying off. They did in the fourth quarter and that's continued into the first quarter as well, Yuri. Yeah. Maybe Jay can jump in on this one, just the second part of that question. I mean, if I understand correctly, you reclassified some SG&A expense up into OpEx, so your gross margin, I guess measured as we used to measure it was actually even better than what we saw. Jay, can you help us with the reclass? Yeah. Good comment, Yuri. Just that was simply just getting used to the operations at Hixson and, you know, there's quite a bit of manufacturing going on in that operation. Just sorting through all of that in our first year with Hixson, you know, coming out of 2021 and firming up, you know, the allocation of costs. Of course, that had no impact on EBITDA, but did move some costs around between SG&A and margin. We're talking like a couple million bucks, something like that? Yeah. Yeah. Yeah. Okay. Okay, good quarter, guys. I'll turn it over. Thanks. Your next question comes from Hamir Patel with CIBC. Please go ahead. Hi, good morning. Amar, two of your your treated peers pointed to their volumes being down high single digits year-over-year in Q4. Was that your experience as well? We were off a little bit, yeah. Not much. I'd say single-digit in certain regions. Certain regions were up, so it was a little bit all over the map, depending on where you were and what the weather was like as well. We haven't seen, you know, any large fall off in volume or demand as we started the first quarter as well. You know, we're still active in all markets and in pretty much all regions. As long as the weather's cooperating, we're shipping material. Great. Amar, any comments on how your Canadian distribution volumes might have fared in the quarter and into 2023 to start the year? Yeah, distribution's been steady. You know, Canada's been, you know, kind of boring. It's just kind of, you know, in a band of housing starts between, you know, call it 200, 250, and the multis and singles just are kind of bouncing around and being boring. We see that continuing, so our volumes are pretty flat to last year. You know, the biggest factor in all of this is just the deflation of all, you know, the lumber items and everything from, you know, comparing to last year to where we are today. If you read Random Lengths, I mean, some stuff was CAD 1,400, it's down to CAD 400. The lumber market's completely changed and steadied. As mentioned on the previous question, you know, we've done a good job of managing through that and maintaining our margins and as we start this year. Different price base for sure on all sides of the business with lumber down, but otherwise the business is running fine. Great. Thanks. That's helpful. Just, last question I had for Jay. What should we expect for CapEx in 2023? Are there any notable growth projects in that budget? Right, we don't expect to, you know, break away from any historical patterns, Hamir. You know, we're running around CAD 5 million-CAD 6 million of CapEx the last couple of years. You know, we plan for a little bit more of that, and then we look at every CapEx request very closely. You know, planning-wise, we've got CAD 12 million in the budget, but we don't expect to spend all that. Great. Thanks. That's all I had. I'll turn it over. Your next question comes from Paul Quinn with RBC Capital Markets. Please go ahead. Yeah, thanks very much. Morning, guys. Just looking back over the last, like, two and a half years where you had that really exceptional, you know, run-up in prices, you know, how do you treat your business differently the next time this comes around? Like, what are some of the things you could have done to capture more of the upside and limit the downside? Yeah, I think we did a good job, Paul. You know, we were no one knew what, you know, how to play that. Certainly the ride up was a lot of fun. The ride down wasn't, but we knew it was coming. I think the key there was not to, you know, over-inventory, but the problem is, you know, we're dealing with, you know, world-class retailers, and we can't be out of stock, so we've got to carry inventory. I think those volatilities are, you know, hopefully once in a lifetime because of the pandemic, sorry. We may not see that kind of rollercoaster ride again. Having said that, what have we learned? You know, learn to continue to run more with less inventory and be able to turn faster. You know, we surprised ourselves with how fast we can turn inventories and run with less. We're doing that now. As you see, our working capital is down, our inventories are down. We're getting ready for, you know, whatever's coming up. Certainly we got more efficient through that process. As you saw, the last big slide of lumber, kind of in the last half of last year, we managed very well and brought our margins back up to kind of our neighborhood. I think we learned a lot, and we're executing on what we learned. Okay. Just trying to get some feedback from your customers on. You deal with customers on both the new home construction side as well as the repair and remodel. Is there a big difference between how those customers are looking at 2023? We haven't seen a decline yet. We've seen a lot of the box store business start off the year fairly brisk. Again, weather dependent. California was a bit slower in January. Texas had a few days of ice when we couldn't ship. Besides that, they're active. We get to see the store sales, you know, the computers are aligned, so we can see what's moving and the material's moving. The cash and carry renovation part is still going. The new home construction, you know, hasn't fallen off. Again, you've heard me mention before, usually after periods of a lot of home building activity, the decks and fences, which are, you know, our number one and two products, come afterwards, and we're seeing some of that now. Of course, lumber being more affordable today, I think is gonna help drive costs from some people that were on the sidelines when lumber was in the stratosphere and couldn't afford it. Okay. That's helpful. Just looking at M&A opportunities, whether, you know, it sounds like treating slowed down a little bit, whether that's still a focus for the company going forward in terms of, you know, capturing some synergies and some market share, or are there other areas that you, that you wanna target? Yeah, geographically still in the US, we wanna move eastward and we will at some point. We're looking in the Northeast and the Southeast. There's some opportunities there. We're continuing our dialogues, you know, despite coming out of the pandemic and interest rate fears and all that, we're not stopping our M&A focus or anything else. We just think some of the pricing as far as acquisitions go are a little ahead of themselves, looking back at the last couple of years, which were robust years for everybody that was awake in the business. We're looking at those numbers and saying we're gonna be normalizing over the next few coming up, so we're gonna be sober on our valuations as we go to purchase these businesses. We're not gonna stop growing here, Paul. No way. Great. That's all I had. Solid quarter. Thanks, guys. Your next question comes from Zachary Evershed with National Bank Financial. Please go ahead. Thank you. Morning, everyone. Congrats on the quarter. Thanks, Zach. What are you hearing from your clients in terms of the pace of end market demand and the backlog of projects they're looking at? Is that starting to pull in a bit and dry up, or is it still strong as ever? Yeah, I wouldn't say it's as strong as ever or drying up. I think it's just steady as she goes, Zach. What we're seeing is people ordering a little bit less, but more frequently. I think everyone's a little, you know, concerned and, you know, reading the same media we all read and just, you know. I think in some action, and hopefully the right direction going back down, you'll see guys get more comfortable buying more and more material. Everybody's running with less and turning faster. That just seems to be the flavor of the day. Don't get caught with too much stock in case your customer goes away. Everyone's being cautious, which I think is a responsible approach. In that kind of same vein then, what's your view on pricing and the supply-demand balance in lumber and panels? Yeah, you know, my prediction, you know, for what it's worth, I think lumber's gonna trade in a band between $50 and maybe $100 up and down. I don't think we're gonna have these record highs and different things like that. You know, everyone is under buying, and if the weather shakes out and, you know, there is no recession, and interest rates are kinda holding where they are, the demand will pick up. Again, I just see us swinging in kind of a band of being back to, you know, sort of backing and filling in sort of a boring lumber market. Frankly, that's where we do really well, in a boring market. That would certainly be nice. If things don't quite go that way, what's your downside scenario look like for a housing bear market? Well, we're watching our inventories very close, that's the one lever that we can pull pretty quickly is, you know, just sort of run with less, which we started last March as I was saying a bit earlier. We're kind of prepared for that. You know, we can move our inventories fast. It's pretty liquid stuff, so we're not gonna get caught being over inventoried if, you know, the world comes to an end tomorrow. The more we kinda see where the housing market's going, it's, you know, we think it's gonna be down in the US, but we're seeing our volumes and everything else still steady as she goes as we're in the first quarter here. Good color. Thanks. Just one last one from me. You mentioned that your gross margins got back up into the neighborhood that Doman's used to. Where do your gross margins sit typically, if everything plays out to your assumptions and you're able to continue managing costs? Yeah, we're in that sort of the 14s as we speak about, you know, that can, you know, move up and down just a little bit in that area. That's kind of the area where we live, and it seems to be kind of our traditional pattern as we add more trading, you know, activities and manufacturing into the operations. That's kind of where we trend is right in that zone. Any other comments there, Jay? No, I think that's covering it, Amar. In that zone around 14% is where we expect to be in a relatively in that band of pricing that Amar mentioned. Thank you very much. I'll turn it over. Thanks. Your next question comes from Ian Gillies with Stifel. Please go ahead. Morning, everyone. Morning, Ian. I'm just curious of whether you're seeing any change on customer demand side for your, call it, maybe more traditional lumber products versus the ally product lines, given some of the deflationary pressures on lumber over, call it, the last six months. Yeah. I mean, our customers, you know, let's say on the distribution side, and kind of the lumber yard side, we'll put box business aside for a minute, as mentioned, the guys are ordering less and more frequently, which lends into our distribution model of LTL, which is less than truckload activity. We're seeing those divisions do better as people order less, and they won't order full rail cars, et cetera, or buy direct from mills where they, where they can. They're buying this fill, and everyone's a little concerned, everyone's just playing it, you know, buy two, sell two, buy two, sell two, and that's kind of where we're at. With respect to the Distribution, Selling, and Administration line item on the income statement for a lack of a better term, as activity rolls over and you're trying to right-size costs, I mean, how much flex do you have there from here to move that number or if things get worse? Yeah. I mean, we can ebb and flow a little bit on the manufacturing side and how many people we need as far as production activities. You know, if lumber's at $200 or $1,400, it still takes a salesperson to execute a sale. The pricing is really a bit irrelevant to that. We still need people to operate the businesses. We've got some levers we can pull to, you know, rein things in. We're elastic with almost all of our freight, except portions in the US where we have our own trucks. Otherwise, we don't have trucks sitting around and drivers and insurance to pay. We're pretty elastic. We've been through a few downturns before, and we manage quite well, and we usually see renovation activity pick up through downturns. That's helpful. Thanks very much, Amar. I'll turn it back over. Thanks, Ian. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. There are no further questions at this time. Please proceed. On behalf of the Doman Building Materials team, I'd like to thank you all for joining us today. This concludes today's call. Should you have any other questions, please feel free to follow up with me directly. Have a great day. Operator? Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.