Greetings, welcome to the Doman Building Materials Group second quarter 2023 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ali Mahdavi, Investor Relations. Thank you, Ali. You may begin. Thank you, operator, and good morning, everyone. Thank you for joining us this morning for Doman Building Materials' second quarter 2023 financial results conference call. Joining me on this call this morning are the company's Chairman and Chief Executive Officer, Amar Doman, and Chief Financial Officer, James Code. If you have not seen the news release which was issued after the close of market yesterday, it is available on the company's website 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 August 18th. Following management's presentations and remarks on the second quarter results, we will conduct a Q&A session for analysts only. Instructions will be provided at that time for you to join the queue for 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 and 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 excuse me. Please read the forward-looking statements and risk factors in the MD&A, as these outline the material factors which could cause or will 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 turn the call over to Amar. Thank you, Ali. Good morning, everyone. Thanks for joining us on today's call. Coming back with a strong start to the year with our first quarter results, we're very pleased and encouraged with how the second quarter unfolded. During our last call, I highlighted that we continue to work through pricing volatility and challenging year-over-year pricing comparatives. We like where it sits at present times. These trends continue to exist in our day-to-day activities. However, our focus remains on what we can control to ensure we maximize margins and free cash flow generation. Our team's focus on inventory management, with the goal of optimizing gross margin performance, combined with our constant efforts on overall cost management, were key contributors to our success in a strong second quarter. Demand also remains steady across all CDN markets during the quarter, with volumes in various categories showing no sign of wavering. However, given the lower pricing for construction materials on a year-over-year basis, revenues were lower in the second quarter when compared to the same period last year, as expected, but at much improved margins. To put this in numbers, gross margin for the second quarter was 17% compared to just under 12 a year ago. Our financial and operational performance in the second quarter is a testament to our ability to work through volatile markets and our team's track record on managing the business through similar cycles. Throughout the quarter, we remained laser focused, as always, on our margins and optimizing our balance sheet. To put the decline in lumber pricing and commodity pricing in perspective, year-over-year, lumber is down in price 51%, OSB is down 54%, plywood is down 39% in price. Our ongoing cost management focus on operational efficiencies and successful integration efforts enabled the company to realize strong gross margin and EBITDA margin performance, despite the massive deflation in commodity pricing. I am both pleased with and very proud of our financial performance, specifically from a pricing trend perspective, where we have had to be extremely responsive to industry-wide price volatility while ensuring that our first-class level of service remains on point. As a result of our collective efforts, revenues amounted to CDN 710 million. Gross margin remained strong at 17%, or CDN 121 million. EBITDA amounted to a strong CDN 66 million. Net earnings came in just under CDN 30 million, and we paid our 55th quarter in a row of dividends of CDN 0.14 a share. Looking ahead, we are cautiously optimistic as we believe that the pricing environment and market demand is nearing equilibrium at healthy levels, while we continue to manage our costs and always look for growth opportunities. Our balance sheet optimization strategy is also tracking well, with roughly CDN 230 million of debt reduction since our transformative acquisition of Hixson Lumber two years ago. Debt reduction is a key priority for us as we look forward to having a solid, growth-friendly, and fire-ready balance sheet for opportunistic acquisitions that we are always working on. As always, we remain confident in our ability to work through volatile markets diligently while serving our customers' needs with the highest level of service. We remain excited about our growth profile and our overall prospects for the business. We have built a solid, diverse, and resilient business in North America with a broad and growing footprint, which we are extremely proud of. I wanna thank our team across North America, our customers, and our suppliers for working so well with Doman Building Materials for another strong quarter with all of our partners, and again, starting with our staff. With that, I'm gonna hand the, the call over to Jay Code, our CFO, who's going to take us through the numbers, and then we'll take some calls from analysts later on. Thanks very much, and Jay, over to you. Thank you, Amar, and good morning, everyone. Sales for the quarter ended June 30, 2023, were $710.7 million, compared to $870.7 million in 2022, representing a decrease of $160 million, or 18.4%. The decrease is largely due to the impact of lower construction materials pricing, which generally declined since reaching a peak for last year in the month of March. The company's sales in the quarter were made up of 77% construction materials, consistent with Q2 last year. The remaining balance resulting from specialty and allied products of 20% and other sources of 3%. Gross margin dollars increased to $121.2 million in the quarter, compared to $102.7 million last year, an increase of $18.5 million. Gross margin percentage was 17% in the quarter, an increase from the 11.8% we achieved in 2022. The relatively stable pricing environment during the current quarter resulted in higher percentage and dollar margins realized by the company, contrasted with the negative impacts of the significant price volatility experienced in 2022. Expenses for the current quarter were CDN 72.5 million, compared to CDN 67 million last year, an increase of CDN 5.5 million or 8.2%. As a percentage of sales, expenses were 10.2% this quarter, compared to 7.7% in 2022. Distribution, selling, and administration expenses increased by $4.6 million, or 9.1% to $55.2 million in Q2 from $50.6 million last year, largely due to recent broad inflationary pressures contributing to higher expense levels during the current quarter. As a percentage of sales, these expenses were 7.8% in the quarter, compared to 5.8% in 2022. Depreciation and amortization expenses increased by $925,000, or 5.7% from $16.4 million to $17.3 million, largely due to the impact of foreign exchange on translation of our U.S.-based operations. Finance costs this quarter were $10.5 million, compared to $9.6 million in 2022, an increase of $924,000 or 9.6%, largely due to this quarter's higher interest rates on our variable rate loan facilities, which was partially offset by lower average loan balances this year. This quarter's EBITDA was $66 million, compared to $52.1 million last year, an increase of $13.9 million or 26.7%. The increase in EBITDA was primarily a result of the higher gross margins this quarter, driven by the relatively stable construction materials pricing, as contrasted with generally declining prices experienced during Q2 2022. Doman's net earnings this quarter were $29.2 million, versus $20.7 million in 2022. Turning now to the statement of cash flows. Operating activities for the six-month period ended June 30th, consumed CDN 6.7 million, compared to CDN 9.9 million consumed in 2022. This period's relatively lower net earnings were offset by stronger working capital metrics, driven by stringent inventory volume management and generally lower construction materials pricing. Operating activities before non-cash working capital changes generated CDN 85.8 million in cash, compared to CDN 97.6 million in 2022. While seasonal changes in non-cash working capital consumed CDN 92.5 million in cash, compared to CDN 107.6 million in the first six months of 2022. Overall, financing activities generated a net cash amount of CDN 8.8 million from equity and debt stakeholders, compared to CDN 5 million for the comparative six-month period in 2022. Payment of lease liabilities, including interest, consumed $13.1 million of cash, compared to $12.2 million in 2022. The company's lease obligations generally require monthly installments, and these payments are 100% current. In this six-month period, we borrowed an additional $120.5 million on our revolving loan facility, compared to $43.2 million in 2022. We utilized excess availability under the revolving loan facility to redeem our $60 million 2023 unsecured notes and to repay the $14.1 million balance on our non-revolving term loan, both in the month of June 2023. Total net advances on loans and borrowings increased by CDN 4.8 million year-over-year, largely a result of the previously discussed lower net earnings, positively offset by strong working capital control, resulting in the slight increase in facility utilization this year. Shares issued net of transaction costs generated CDN 609,000 of cash, compared to CDN 618,000 in 2022. The company also returned CDN 24.3 million to shareholders through payment of dividends during the six-month period, which was consistent with payments made in the first half of 2022. We also note the company was not in breach of any of its lending covenants during the six-month period ended June 30, 2023. Finally, we invested CDN 2.3 million in new property, plant, and equipment, compared to net investments of CDN 2.9 million last year. This concludes our formal commentary. We would now be happy to respond to any questions that you may have. Thank you. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from Hamir Patel with CIBC Capital Markets. Please proceed with your question. Good morning. Amar, are you able to give us a sense as to how your treated volumes are tracking year to date, and any major differences you might be seeing between Canada and the U.S.? Yeah, I think, we can answer very confidently that our volumes, in most markets are up from 2022. As you know, in the back half of last year, volumes did fall off quite a bit as well. Having said that, in the first half, we exceeded last year's volumes in virtually all market segments that we're involved in. Okay, great. Thanks. That's helpful. And then, Amar, just back to margins, obviously very strong quarter, here in Q2. How do you think about where gross margins for the business could stabilize over the long term? Yeah, I mean, it's a nice, nice margin profile this quarter. Everything lined up well. I, I would call it a normal lumber market. Things were, you know, ticking up a little bit, but, you know, we didn't get a ton of tailwinds with lumber running up or anything like that, so it was just a nice blocking and tackling quarter. It was good. I would say as we go forward, you know, if the lumber market remains consistent, you know, we'll be in that, that kind of a range. I would say that that was, you know, a very, very strong quarter where things aligned very well. You know, we're hoping it'll be, you know, in that range. I wouldn't say pushing too much higher than that. I think that's pretty strong for us, as you know. Things aligned well, depending on where the lumber market goes. Great. Thanks, for that. I'll pass it back. Thanks, Hamir. Thank you. Our next question comes from Paul Quinn with RBC Capital Markets. Please proceed with your question. Yeah, thanks very much. Good Good morning, guys. Just, following up, just on overall business conditions, what are you hearing from your customers as to their expectations for the last, you know, for the second half of the year and into 2024? Are they, are they relatively optimistic at this point? You know, I don't think anybody's optimistic in this weird environment, Paul, thanks for your question. I would say that everybody is still running hand to mouth on inventories. This thing is not where people are getting ahead of themselves. You know, it does appear like the new housing construction is in sort of a demand zone, where there's so many mortgages that were done at low rates. There's just been a lot of inventory out there. This is a demand-driven housing market on the rental side as well for multi. We're seeing a lot of strength there, but no one's wildly optimistic by any means. The numbers are good. They're consistent. Everybody's scared to over-inventory, just like they were kind of starting in the first quarter last year. It's the same hand-to-mouth. No one's. You know, you need 10 trucks, you buy five. That's why we get these flash rallies. In my view, it just, everyone kind of bum rushes at the same time when they're all out, and it creates a spark, and then it fades again. I think we're in that trading range I talked about last quarter. Right. Okay. You know, just it's, it's curious to see, you know, most of the companies I cover, they sort of move with the commodity prices. It seems like with the business of you guys, your gross margin seems to be, you know, it's in a sweet spot. Is it something consistent through, you know, most of the time that you've run the company? Absolutely. You know, you take the COVID noise out of those wild swings that we all saw up and down. You know, when we've got a relatively normal lumber market or stable, you're gonna see those gross margins very, very steady. Your any comments on that, James? Yeah, no, we've, we've seen that, as Amar said, pre-COVID. If you go back, you know, it's a, it's a slightly different margin profile now that we've added Hixson during, during COVID, two years ago, this month. That, that certainly enhances the margin in a steady market. Hixson's, you know, performing well in this market, in the Southern Yellow Pine category. Okay, last question I had: Any businesses that you've got, any part of your business doesn't do well in this, in this, sort of steady environment? You know, cedar's been a bit challenging inside, you know, one of our divisions a little bit. Our logging side has been really wet until recently. Now it's, you know, it's too dry, it seems, but that t hose are very small parts of the business. Logging material, it seems that, you know, having this peaking lumber market, you know, gave us good legs here in the first and second quarter, and it's been evidenced into the third. It's nice to see those consistent trends happen, but pretty much a ll facets of the company are running very well. Great. Well, go ahead. Thanks. Thank you. Thank you. Our next question comes from Zachary Evershed with National Bank Financial. Please proceed with your question. Morning, everyone. Thanks for taking my question. Good quarter. Can you tell us about the pricing of your existing inventory and, at the local level, what you're seeing in terms of pricing trends on lumber and panels? Yeah, I mean, it's, you know, I think we got a little toppy, you know, a week ago, and, and a couple of species are looking like they topped out. You don't see a collapse, but just it's, it's kind of poppy pricing. Our inventories are priced very well. As we might have indicated on our last call, Zach, you know, we've really reduced our inventories company-wide, increased our turns. We're much more live to the market for a lot of reasons. You know, obviously just, you know, concerned about an uncertain interest rate environment and all that kind of stuff. We're running faster, leaner, better with less. Learned that through COVID, and we've seen that material and all that kind of stuff. Those strategies are keeping us more fit, closer to the market, and I think that was evidenced by our gross margin in the first two quarters of the year. That's a good call. Thanks. Then building on that, running faster and leaner, are you still expecting the usual seasonal patterns in the back half of the year in terms of not only the pace of sales and margins, but also the working capital movement? Yeah, that's, that's correct, Zach. We would expect the normal seasonal pattern of reducing inventory and receivables levels going through Q3. That usage of the revolving loan facility, you'll see come down when we report Q3, as, as is the normal pattern. Fantastic. Then zooming out a little bit, a question for you, given the recent news flow on lumber duties between the U.S. and Canada. Last time we touched base on the topic with you, you weren't really in the habit of moving product across the border. Number one, is that still the case? Number two, is there any impact to the lumber markets you can see? Yeah, our lumber division does do a little bit of that exporting, of course, you know, involved in that. You know, they factor all that into their margins, et cetera, have for years. They clearly understand how to run that business very well. The, the larger part of the treated lumber business and our, you know, North American distribution business, CanWel, we do not export virtually anything across the line. We do sell post holes and agricultural posts off our own timberlands that we manufacture, treat, and we do ship some down to the U.S., but nothing that would really, you know, have any sauce with lumber duties except our lumber division. Gotcha. Thanks. Then just one last one, a little bit more speculative. When rates come down and, you know, people get a little bit more optimistic, where are the bottlenecks in your product that would be the slowest to ramp up? Is it you, your suppliers, customer production capacity, the rails? No, I think everything's into a good groove. You know, I'm not sure we'll get a runaway here, but, it seems that it's sort of a back-and-fill kind of economy. The supply chains have caught up, the mills have kind of caught up, and, you know, we've got decent pricing out there. It's not, you know, great pricing by any means. You can see the sawmills, a lot of them are in the red right now, unfortunately. You know, I think that will come around, as some production maybe comes off the market perhaps. Really, I think, most of the supply chains have caught up. I don't think there will be a bottleneck unless, you know, there's a housing, you know, boom again here. With rates the way they are, you know, I think we're just going to be steady as she goes. Having said that, if there was a massive pickup, I think the bottlenecks, you know, certainly would be at the manufacturing level of lumber and then perhaps transportation and the rails. Great answer. Thanks. I'll turn it over. Thank you. Our next question comes from Yuri Lynk at Canaccord Genuity. Please proceed with your question. Good morning, Jay. Good morning, Amar. Morning, Yuri. Nice quarter, guys. Just a quick one from me. Balance sheet's looking pretty good shape here. Really nice deleveraging. Amar, how, how would you characterize the M&A outlook and, and just the, you know, the, the expectations on behalf of the potential sellers out there and, and how active you might be over the next year? Yeah, you know, we're, we're pretty active on that front always. As you know, sometimes we seem to take a lot of time to build those relationships in order to get a transaction completed. The valuations on certain businesses are sort of coming back to earth as far as what expectations are. We like to see that. There's a lot of geography for us to run yet in the U.S. that we're actively engaged with and we will be involved with. You know, when you look at the map, you can certainly see where we are and where we aren't, and we will be in those markets. Our customers would like us there. I'd say national, you know, in the U.S. is a big priority for us and to our strong customer base there. Okay. That's all from us. Great quarter. I'll turn it over. Thank you. Our next question comes from Ian Gillies with Stifel. Please proceed with your question. Morning, everyone. Morning. With Hixson, with the Hixson anniversary coming up, and you obviously bought that during a very dynamic time in the market. Have the gross margins for that business settled out in a bit of a better place than you would have anticipated, even at the time of the deal? Yeah, they have. A couple things, Ian, that's a great question. You know, we've invested in technology, as we said we would do in that business. It's now our 25th month of operating with the great Hixson folks, and we've certainly come a long way quickly. They've executed well, not only joining a public company like ours, but the technology implementation went without a flaw, you know, in all of our drying and treated plants and the sawmills. It's running very well. That's allowing us to extract and mine the information that we thought we could and get more sophisticated on margin, freight recoveries, et cetera, like we do in all of our other divisions, we think, very, very well. Hixson's hitting to that level quickly, and it's almost like, okay, now we can really start to see how we can squeeze and get those gross margins up. The Southern Yellow Pine market is giving us a, just a consistent platform, really starting to demonstrate the cash this business can throw when we're in a normal market. Long answer to your question, but our investment in that business and how well they've executed has really aligned nicely. No, that's, that's helpful. I guess to put a finer point on that, if I historically have thought of this as like a Doman is a 13%-15% gross margin business. Given what you've just talked about Hixson and the contribution and thinking about it more like a 14%-16% range now, a bit more appropriate? Yeah, I, I think 14 is even light, you know, as far as a consistent basis with the, the weighting of Hixson in there in a normal lumber market. We, we always have to put an asterisk there, because if lumber starts to go up, you know, there's always some pain because of some of our customer base is tied to Random Lengths weekly. We, we ebb and flow with that, depending on our inventory levels in-house and our contract wood with the mills. There's a lot of that goes into the cauldron to make that margin happen. If we don't have wild swings, those goalposts that you just mentioned are, are the zone for sure. You know, 17 getting up towards best in class. Yeah. That's, that's very helpful. I'll turn the call back over. Thanks again. Thanks. Thank you. There are no further questions at this time. I would now like to turn this call back over to Ali for closing comments. Thanks, operator. On behalf of the Doman Building Materials Group Limited team, I would like to thank you for joining us this morning. We look forward to speaking with you again on our third quarter conference call. That concludes today's call. Have a great weekend, I'll turn it back over to the operator. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.