Greetings, and welcome to the Doman Building Materials Group Ltd. Q3 2023 conference call. At this time, all participants are in a listen-only mode. A 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 Ali Mahdavi, Head of Investor Relations. Thank you. You may begin. Thank you, operator, and good morning and good afternoon to everyone, depending on where you are. Thank you for joining us today for Doman Building Materials' Q3 2023 financial results conference call. Joining me 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 markets 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, November seventeenth. Following the presentation of the Q3 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 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, Ali, and thank you for joining us on today's call, everyone. I'd like to, first of all, thank all of our great employees, our customers and partners of the company for their efforts and continued partnership with Doman. On the back of a strong Q2, the Q3 was similar in terms of our focus on optimizing operational and financial performance on both sides of the border, while navigating through continued macroeconomic headwinds stemming primarily from rising interest rates, inflationary pressures, and concerns around the risks of a recession. Throughout the Q3, we continued to work through the impact of challenging year-over-year pricing comparatives, largely due to the impact of construction materials pricing, which peaked in the Q1 of 2022. These trends continue to exist in our day-to-day activities, and we are working through areas where there may be some softness, as we have done so in the past. To put the external market dynamics in perspective, vis-a-vis our financial performance in the Q3, the seasonally adjusted annualized rate for single-detached housing starts in Canada, which is a relevant leading indicator for our business, was 52,000 for the Q3 of 2023 versus 75,000 the comparative period of 2022, a decrease of 30%. During the same period, we've experienced pricing declines in lumber and plywood when compared to the Q3 of 2022, some are now down 35%. Despite these external pressures impacting our top-line numbers, our focus remains on what we can control to ensure we maximize margins, free cash flow generation. Inventory and overall cost management were once again key contributors to our success in the Q3, resulting in another period of strong gross margin performance. While we continue to see more of a cautious tone and sentiment from customers and how they are working through some of the same macroeconomic headwinds, demand remains steady across all key end markets during the quarter, with volumes in various categories remaining range-bound. However, given the lower pricing for construction materials on a year-over-year basis, revenues were lower in the Q3 when compared to the same period last year, but at improved margins. To put this in numbers, gross margin for the Q3 was 16%, compared to 12.3% a year ago. Despite the lower pricing and concerns caused by the global macroeconomic environment, I remain pleased and encouraged by the strength of our business model and our ability to perform while ensuring that our first-class level of service remains on point to our customers. As a result of our collective efforts, our revenues amounted to CAD 644 million. Gross margin remained strong at 16% or CAD 102 million. EBITDA, CAD 52 million. Net earnings, just over CAD 21 million. Lastly, we paid a quarterly dividend of CAD 0.14 per share. I believe that's our 56th straight dividend. Speaking of financial performance, I'm also very pleased with our relentless focus on balance sheet management and optimization. To this point, during the last 12 months, while working through some of the challenging market dynamics, we were able to reduce our debt by CAD 122 million, thanks to the strength of our free cash flows. Looking ahead, we remain very excited and cautiously optimistic as we work through the macro-related and pricing-related dynamics, while we continue to manage our costs and always look for growth opportunities. We are aware of external pressures which may come into play not only into our industry, but any other others that touch similar end customers. As always, we remain confident in our ability to work through volatile markets diligently while serving our customers' needs at the highest level of service. We remain excited about our growth profile and the overall prospects of the business, and we'll continue to look for strategic growth opportunities, vis-a-vis acquisitions. With that, I would like to ask Jay Code, our CFO, to take over, provide a company overview of the Q3 financial results in greater detail, and then we're going to open up the call for questions. Jay? Thank you, Amar. Good day, everyone. Sales for the quarter ended September 30, 2023, were CAD 643.9 million, compared to CAD 744.1 million in 2022, representing a decrease of CAD 100.2 million, or 13.5%, largely due to the impact of the previously discussed construction materials pricing declines, which resulted in lower average pricing for lumber and panels during the quarter. The company's sales by product group in the quarter were made up of 72% construction materials, compared to 66% last year, with the remaining balance resulting from specialty and allied products of 23% and other product sales, 5%. Gross margin increased to CAD 102.8 million versus CAD 91.5 million in 2022, an increase of CAD 11.3 million. Gross margin as a percentage of sales, was 16% in the quarter, an increase from the 12.3% achieved last year. The relatively stable pricing environment during the current quarter resulted in both higher percentage and dollar margins realized by the company, contrasted with the significant price volatility experienced last year. Expenses for the Q3 were CAD 67.6 million, compared to CAD 68.3 million last year, a decrease of CAD 708,000, or 1%. As a percentage of sales, expenses were 10.5% in the quarter, compared to 9.2% in 2022. Distribution, selling, and administration expenses decreased by CAD 670 thousand, or 1.3%, to CAD 50.8 million in the quarter, from CAD 51.4 million last year, mainly due to the company's continued efforts to tightly manage controllable costs. As a percentage of sales, these expenses were 7.9% in the quarter, compared to 6.9% in 2022. Depreciation and amortization expenses were CAD 16.8 million, largely in line with the Q3 of last year. Finance costs this quarter were CAD 10.1 million, compared to CAD 9.8 million last year, an increase of CAD 298 thousand or 3%, largely due to higher interest rates on the company's variable rate loan facilities, which was partially offset by lower average net debt in 2023. Q3 EBITDA was CAD 52 million, compared to CAD 40 million in 2022, an increase of CAD 12 million or 29.9%. This year's increase in EBITDA is mainly a result of the previously discussed stronger margins and tight expense management realized during the quarter. As a result of these factors, net earnings for the Q3 were CAD 21.2 million or CAD 11.6 million compared to CAD 11.6 million last year, an increase in earnings of about CAD 9.5 million. Turning now to the statement of cash flows. Operating activities for the nine-month period ended September thirtieth generated CAD 132.2 million in cash, compared to CAD 126.2 million during the same period in 2022. Changes in non-cash working capital items consumed CAD 4.5 million in cash, compared to generating CAD 27.8 million last year. Management continued its efforts to optimize inventory volumes while maintaining the highest standards of customer service in 2023. Overall, financing activities generated, resulted in net payments to equity and debt holders, totaling CAD 117.9 million in 2023, compared to CAD 156 million last year. The company borrowed an additional CAD 12 million on its revolving loan facility, compared to repaying CAD 99 million in 2022. This year, Doman utilized its revolving loan facility to redeem its CAD 60 million 2023 unsecured notes and to repay the CAD 14.1 million remaining balance on its non-revolving term loan in June of 2023. We also note the company was in compliance with all lending covenants during the nine-month period, ended September 30, 2023. Doman returned CAD 36.5 million to shareholders through dividends paid during the nine-month period, which translates to a CAD 0.14 quarterly dividend per share, consistent with 2022. Payment of lease liabilities, including interest, consumed CAD 19.8 million of cash, compared to CAD 18.4 million last year, and the company's lease obligations are generally require monthly installments, and these payments are 100% current. Finally, Doman invested net cash of CAD 10.4 million in new property, plant, and equipment in the nine-month period, compared to CAD 3 million in 2022. This concludes our formal commentary, and we'd now be happy to open up the call to any questions you may have. Thank you. Operator? Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask your question, you may 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 key. Our first question comes from the line of Hamir Patel with CIBC. Please proceed with your question. Good morning. Amar, given the greater affordability headwinds in Canada, are you expecting a slowdown in the Canadian distribution business in 2024? No. In fact, we think we're gonna be pretty decent, Hamir, and the reason why is it's evidenced now that the slowing, it's already happening with housing starts here, especially the singles. But, our LTL, less than truckload business, has picked up significantly. So when we have these sort of scared buyers, if you will, across the country, they tend to buy less than truckload, and that really assists our distribution business. That's been evidenced this year right across the country, from BC right to Newfoundland. So, this is where we do better, and that, that helps our distribution margins as well with those nice mixed trucks of different allied and construction materials that we ship out. Thanks, Amar. That's, that's helpful. And, you know, as the rebuilding gets underway in Maui, how is the Home Store business positioned to assist there? And, you know, how meaningful could the increased sales activity be there? Yeah, for the Maui division, it'll be significant over time. You know, certainly we don't like the morbid side of this, but really, we wouldn't be shipping anything into Lahaina unless they got wiped out. Sadly, it's been wiped out, and we will have new business going in there as they start to rebuild, work through their insurance, and clear all the hazardous wastes out. So we will get business there. We will matter in Maui. It'll be good business for us. And Hawaii, in general, is doing very well on our electrical distribution side and our lumber side. So, we're quite pleased with Hawaii's performance, even without Lahaina rebuilding yet. Great. Thanks, Amar. Just the last question I had for Jay. How are you thinking about CapEx for 2024? For 2024, Hamir, we just... We would expect to be steady as she goes, you know, something in the CAD 10 million–CAD 12 million annual CapEx spend range. Great. Thanks. That's all I had. I'll turn it over. Thanks. Our next question comes from the line of Paul Quinn with RBC. Please proceed with your question. Yeah, thanks very much. Morning, gentlemen. Amar, you mentioned a more cautious tone from your customers. Maybe you could give us a little bit more detail on what you're seeing in each of the regions, whether it's Canada, the U.S., and East and West and mid on strengths and weaknesses in the market? Yeah, you know, it's been going on over a year, Paul. I think if we had this, or looked back at our call a year ago, customers were cautious last year as rates were rising, et cetera. They're still just as cautious. So, you know, we look across the country in Canada, everybody is just sort of buying less, more hand-to-mouth, including us. You know, we've reduced our inventories. We're turning faster, just like everyone is, because nobody wants to have this big pile of inventory and be caught wrong. Now, having said that, you know, looking at pricing, across Canada and the U.S., we like lumber pricing down where it is, just selfishly, because we think it's getting close to cost, and we'd like to put some inventory on the ground now. But certainly, if we look across the U.S., it's the same feeling. Nobody's inventorying more than they need to. It is a buy two, sell two thing, and that's what's going on, Paul, everywhere, including the West Coast, and Hawaii. Everybody's in the same boat across North America. I think everybody's just afraid of a looming recession that just seems to be pushed further and further out. Okay, thanks for that. I mean, you guys are a pretty big treater. Just wondering how you're thinking about the treating market for 2024, whether your, you know, lumber inventory, whether you build that up at the end of the year to be able to treat this, you know, to get it to the market next spring, or is that gonna be pretty similar levels to last year, or is it gonna be higher or lower? Yeah, I think we'll be similar. You know, we were quite pleased with the takeaway in most regions this year, up in a lot of regions with volume. So, you know, I think we're gonna, we're gonna forecast flat, and we'll build those inventories as such. And certainly, we might buy a little bit more in the Q4 here. We'll just see how it goes with lumber pricing. Again, we like, again, selfishly, where it is, 'cause I think we're close to cost and some, some cases below cost, as we saw last night with some of the sawmills printing. So we'll be cautious there, Paul, but long answer, but, I think our outlook's flat. Okay. And then just lastly, you know, it seems like it's been a couple of years since you've done some kind of M&A transaction. What is that environment looking like? And you know, are you working on stuff right now? You know, so when we bought Hixson 28 months ago, virtually doubled the company, you know, we wanted to make sure that that execution has gone well. The Hixson team's done a fantastic job integrating, you know, putting the software in, all the things that we wanted to have done, and now we're starting to see the results of those activities come forward. So we wanna make sure that was done, but at the same time, keeping our eye on M&A activity. And I can tell you that certainly we're in discussions with several acquisition opportunities. We have to make sure that they fit our core three, you know, values on an acquisition. Number one, you know, sort of 4-6 times EBITDA. Number two, does it fit in with our customers' needs? Number three, can we drive cost out and leverage the scale of the business? So none of that's changed. I think you'll see some stuff happen in 2024, as we're getting a little closer on a few things. You know, frankly, we've got a lot of available credit, so I don't see us going to the markets. I think we're gonna be okay, depending on the size of those acquisitions, but we're not gonna stop. All right, that's all I had. It's all recorded. Thanks, guys. Good luck. Thanks, Paul. As a reminder, it is star one to ask a question. Our next question comes from the line of Zachary Evershed with National Bank Financial. Please proceed with your question. Thank you. Good morning, everyone. Morning, Zach. Morning, Zach. I was hoping you could give us a bit more color on, in the top line, at least, what you're seeing in terms of price versus volume trends? Yeah, so pricing, you know, probably a good idea to peek at some of those charts again, and you can see that, you know, Southern Yellow Pine and, you know, SPF, year-over-year, some of them are down 45%-50% year-over-year, not quarter-over-quarter. But, you know, we're seeing some flattening and bottoming here now, we believe, in lumber, plywood, and OSB on both sides of the border with different species. On the volume side, you know, we've had a pretty good volume year, being honest here, so it just doesn't show up in the top line because of obviously the deflation that's happened. But volumes have been decent. We think they'll be flat into 2024. Thank you very much. And, you guys were quite successful in holding on to 16% gross margins despite the, the pressure on pricing year-over-year. Maybe you can speak to some of the strategies that are going into that and how sustainable you see that being in the coming quarters. Yeah, I think as we were saying last quarter, you know, we had a bit of a higher watermark, you know, at 17, but certainly this is the neighborhood we're in, and just having a normal lumber market, allowing us to do what we do best, which is, you know, produce pressure-treated lumber and distribute building products in a steadier fashion instead of the big ups and downs of COVID, really showed what we can do, and that was the Q2 in a row of kind of showing the new neighborhood that we're in. The Hixson acquisition has certainly helped that, more treated lumber going through the system and having a steady lumber market, I think evidenced. Anything to add, Jay? Just that, as we go through this period, we're updating contracts with customers. We're, you know, we're successfully renegotiating adders in the treated business, in various regions, so that's contributing to the success on the margin percentage as well. Thank you. And then, given the caution that you guys are seeing, everybody being hand to mouth, would you say that you can keep your distribution, selling, and administrative costs fairly flat, or is there more room to trim on that? No, we're... Yeah, we're just going into budgeting season here, Zach, and we think, you know, just a small amount of inflation on SG&A, nothing too outsized, so we'll have more on that in the next couple of months. Good color. Thanks. Then just one last one for me. Last quarter, you talked about sellers' expectations being a little elevated, anchored to kind of 2022 results. Given the macro environment, are you starting to see that normalize, or are you, are you getting closer together on expectations? Yeah, I think a couple of things there, Zach, on the acquisition front. So number one, you know, good and bad. So 2023 was a pretty decent year for a lot of people in the industry that we're looking at acquiring, so tough to kind of push down and paint a bad picture when they're printing good numbers. But having said that, the guys that have got a lot of debt that's free floating, I think there's some cash flow challenges that are starting to appear, much like commercial real estate, where the guys that are levered are starting to make some calls in because they're either gonna have to re-equity up or, you know, maybe look at a sale. I think that part of, you know, us having a super strong balance sheet, very good debt levels, for us, I think, provides opportunity in this environment. That's great. Thanks. I'll turn it over. Our next question comes from the line of Ian Gillis with Stifel. Please proceed with your question. Morning, everyone. Hi, Ian. With where the share price is and strength of the balance sheet and margin performance, have you put much additional thought into, reinstituting the NCIB or starting to use an NCIB in a more material way? 'Cause it's looking pretty attractive here. Yeah, so we just finished our board meeting yesterday, as you know, and we reviewed that, and we elected not to renew it. And here's why. You know, the board and myself and Jay just figure, look, you know, we pay a pretty healthy dividend being an industrial. We like our payout ratios. We're nice and safe there now. So now we look forward and say, "Okay, any extra dollar we have, we're gonna put towards debt reduction, plain and simple. Dividend's gonna stay where it is, and let's continue to pay down any excess debt that we have." And we think, you know, paying a dividend and doing an NCIB may not be the smartest use of cash. And, you know, shares are at a certain point in time here. I agree, they look very valuable. So that does kind of make you scratch your head a bit in what to do, but we made a decision to focus on debt reduction. Jay? Yeah, that, that's exactly correct, Amar. Yeah. And then with respect to how you wanna position the business over the next, call it, three to five years, would you like to see a more even split in the business between allied products and your more traditional pressure-treated products, or is there... Are you agnostic to that, and you're just looking to find the right price? Well, a couple things there. I think you'll see us continue to add more allied products, to some of our treated plants, in the U.S. We started and introduced composite decking, in Texas recently, so we're starting to do add-ons because we're going to these customers every day with full trucks of treated. And one of the strategies is to continue to partner with more allied product lines in the U.S., where it makes sense for the backyard space, and that's, what we're looking at and continuing to build on. So you'll, you'll see us continue. There's not, a focus one way or the other. We, we certainly wanna buy more, you know, pressure treated plants and, and be more valuable to our larger customers in the States and all customers, frankly. But we'll start to augment more of the allied lines through the system as time goes on, over the next, you know, not even three to five years, even sooner than that, and we think we'll grow the system sooner than that as well. That's helpful. Thanks very much. I'll turn the call back over. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Thank you, operator. Thank you again, everyone, for joining us today. We look forward to speaking to you on our year-end conference call, year-end and Q4. That concludes today's call. Any questions, feel free to reach out to me directly, and I'll turn it back to the operator to close the call. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.