Welcome to The AZEK Company Q2 earnings call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Amanda Cimaglia, Vice President, ESG. Please go ahead, Amanda. Thank you. Good morning, everyone. We issued our earnings press release this morning to the investor relations portion of our website at investors.azekco.com, as well as via 8-K on the SEC's website. I am joined today by Jesse Singh, our Chief Executive Officer, and Peter Clifford, our Chief Financial Officer. Before we begin, I would like to remind everyone that during this call, AZEK management may make certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about future expectations, anticipation, beliefs, estimates, forecasts, plans, and prospects. Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Such risks and other factors are set forth in the company's earnings release posted on the website and will be provided in our Form 10-Q for our first fiscal quarter 2022 as filed with the Securities and Exchange Commission. The company does not undertake any duty to update such forward-looking statements. Additionally, during today's call, the company will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations of adjusted EBITDA to net income calculated under GAAP and adjusted gross profit to gross profit calculated under GAAP, as well as reconciliations for other non-GAAP measures discussed on this call, can be found in our earnings release, which is posted on our website and will be included in our Form 10-Q for our first quarter of 2022. At this point, I would like to turn the call over to Jesse Singh. Good morning, and thanks for joining us on today's call. We're off to a solid start for fiscal 2022, delivering strong first quarter results and focused execution against our strategic priorities. We continue to see consistent demand across our portfolio and strong results from our initiatives and new products. I'd like to take a moment to thank both our employees and supplier partners for their focus and dedication, operating through a challenging and complex environment. Their commitment has allowed us to continue to meet end market demand and uphold high service levels, providing an industry-leading customer experience in a difficult environment. AZEK's momentum is driven by a clear and focused strategy to revolutionize outdoor living and create a more sustainable future. We have been operating with a specific set of initiatives that include driving above-market growth and accelerating material conversion by investing in new product innovation and expanding our downstream-focused sales and marketing teams. Expanding our margins through the use of recycled materials in our manufacturing processes and through our continuous improvement programs. Positively impacting the world through our commitments to ESG stewardship. Investing in our core strengths, which include brand, material science, integrated manufacturing, and customer connection. We continue to see a strong underlying market driven by positive demographic trends, increasing focus on outdoor living, and the ongoing conversion away from wood towards our types of low-maintenance, high-performance alternative materials. In decking, as an example, we see our market opportunity is almost five times the current market, including wood. We see a similar opportunity in other segments, such as exteriors, where we have seen strong momentum in wood replacement. Our core markets are nearly $9 billion currently, and we see an adjacent opportunity within outdoor living of an additional $11 billion. We also see an opportunity to positively impact the planet as well as our margins through the expanded use of recycled materials, underpinned by our ESG ambition to divert and utilize 1 billion lbs of recycled materials annually by the end of 2026. Against this market opportunity, we have a focused strategy and have invested in capacity, innovation in new products, people, and acquisitions. We believe that through these actions, we have not simply delivered against our short-term objectives, but we have meaningfully strengthened our position in the marketplace and the capability of the company to continue to meet and exceed our long-term goals. During the fiscal quarter, we saw continued demand across our portfolio, and we benefited from our increased capacity to position the company for future growth. Our capacity, service levels, and new products have put us in a position to pick up additional share and accelerate wood conversion in key markets. We recently executed a successful early buy season this year with our pro dealers. During this process, we expanded our stocking position at a number of key dealers, and we converted a number of new dealers to our products. As a reminder, early buy is the process of engaging pro dealers in the winter months, where they decide which products and brands to stock for the following selling season and where they place preseason or early buy orders to stage inventory prior to the building season. Our success in this early stage of the season is a result of our continued focus on our customers, increasingly reliable service levels in our broad and differentiated portfolio. As we exit the capacity-constrained environment in the recent past, we remain on the offensive and are pursuing new business opportunities that expand our channel, geographic reach, and customer relationships. We also introduced a number of new products in the first quarter, including our TimberTech AZEK Landmark Collection decking in French White Oak and TimberTech EDGE Prime+ decking in Dark Cocoa, along with the new Edge Hidden Clip deck fastener. These products once again highlight our focus on leveraging our unique technologies to create beautiful natural-looking products. Our new capacity has allowed us to scale previously launched products more broadly, and we are expanding the availability of our Edge and Landmark decking collections. We will be showcasing a few of these at the upcoming International Builders' Show in Orlando, Florida, featured alongside StruXure Pergola X and Cabana X, the newest addition to the AZEK portfolio. Our exteriors business continues to deliver with good momentum and demand across its end markets. The breadth of our exteriors portfolio, including our recently launched innovative paintable trim and shingle siding, both available with our PaintPro technology, is driving material conversion and share gains in historically under-penetrated markets. Sales of these new product innovations have more than doubled in the last quarter, with customers appreciating the low maintenance, high performance characteristics of the products over wood competitors. Our PaintPro technology was launched in 2020 and highlights the strength of our new product development model in driving growth in our core and in adjacencies. Additionally, as customers become more aware and better educated of the performance characteristics and benefits of our AZEK and Versatex trim and siding, it enables increased penetration of our broader portfolio. As part of our focus on expanding our position in outdoor living and positioning ourselves in fast-growing adjacencies, in December, we acquired StruXure Outdoor. StruXure is a designer and manufacturer of high quality and innovative aluminum pergolas and cabanas. StruXure is the premium player in an identified market adjacency estimated to be nearly $1 billion, and one that is experiencing similar long-term secular growth and material conversion trends away from wood. StruXure's products are highly complementary to our TimberTech decking, and we know that each company's products are already being installed together on projects by contractors across the country. StruXure's products also enhance outdoor hardscapes as they have a strong presence in southern, quote, Sunbelt states. We believe this will further open new adjacent opportunities for our combined company. StruXure shares our focus on ESG with each of StruXure's existing product lines being made from up to 50% recycled aluminum. We plan to leverage AZEK's expertise in sourcing, operations, research and development, and material science to improve StruXure's already impressive performance. We also see significant revenue synergies from leveraging our combined portfolio across our broader customer base. We are excited to welcome StruXure to the AZEK family and look forward to working with the team in the months and years ahead. In addition to StruXure, in November, we closed an acquisition of a regional PVC recycler offering full service recycled material sourcing, processing, logistics, and scrap management programs. The acquisition is a vertical integration that complements the Return Polymers team and adds new sources of PVC scrap material, a key input in our polymer-based decking boards and trim, and one that will allow for continued progress towards our goal of utilizing 1 billion lbs of recycled material annually by the end of 2026. Going forward, we will continue to invest organically and through M&A to achieve both our business and ESG objectives. We are committed to investing ahead of the curve to put ourselves in a position to drive growth and increase conversion in the market. As part of that focus, we continue to make progress against our new capacity adds in our core facilities and our Boise facility build-out. We successfully commissioned additional decking capacity in our core facility in Ohio, and these lines are currently in production. As a reminder, this, combined with previous phases, brings our total completed capacity adds to over 55% against our 2019 baseline. In our new Boise facility, our supply chain and operations teams have also done well to operate through a difficult environment since we have broken ground, and we are on track on the build-out of the facility with our modular manufacturing processes. Boise is a strategic investment for the company and will provide much needed capacity and flexibility, and we are very excited by the additional opportunities that the Boise expansion will provide. In total, our announced decking capacity additions will bring our total capacity increase to 100% versus a 2019 baseline. We also continue to be focused on expanding the depth and breadth of our team. We recently announced the appointment of Daniel Boss as Senior Vice President of Research and Development. Dan Boss is joining us from GAF Industries and has a long career in R&D through positions of increasing responsibility and will be an asset to our organization as he assumes leadership of our R&D function. He will be focused on introducing the next phase of AZEK and TimberTech products to our already strong portfolio. Another key appointment to the AZEK management team is Sam Toole as our Chief Marketing Officer. Sam joins AZEK from California Closets, where she served as CMO and drove significant growth by developing a multi-touch point marketing strategy, increasing the use of digital tools and data, and overseeing the production of award-winning content. We are excited by the timing of Sam's arrival as we continue to drive our next phase of growth in wood conversion. She will draw on her collective and varied experiences to improve the customer journey and expand our consumer-driven growth engine. We are excited about the addition of these two strong world-class leaders whose skills and experience will complement the existing management team and enable our next phase of growth. Turning to first quarter results, AZEK net sales and adjusted EBITDA increased 22% and 21% respectively in the first quarter of 2022 over the same period in the prior year. Net sales in our residential segment increased 19%, driven by a strong performance across our deck, rail, and accessories and exteriors business. As a reminder, we exited 2021 with an improved channel inventory position, and our growth in the quarter reflected more normalized seasonal demand and inventory. Sell-through in this traditionally slow part of the season grew modestly year-over-year and notably accelerated into the month of December. A particular source of strength was our decking business, which grew at higher rates than the company average. As previously mentioned, our exteriors business also saw strong performance and continues to benefit from a concerted focus on new product development. Our rail business continues to operate through material and supply chain issues, which constrain growth to low single digits as previously anticipated. Net sales in our commercial segment saw a strong performance, increasing by approximately 45% year-over-year, due in part to pricing actions and robust demand in comparison to an easier comparable period last year. We saw particular strengths in certain markets, including outdoor living, marine, industrial, and semiconductor end markets. As we transition to the outlook, I want to provide some context on our results and typical seasonality. AZEK's fiscal first and second quarters are generally considered to be stocking quarters in which distributors and dealers fill the channel with inventory in preparation for the start of the spring selling season. We've had strong operational execution over the past few quarters and have successfully been able to support our dealers and distributors with increasing service levels. Our distributors and dealers now have the inventory on-hand to aggressively drive growth in the market. This has put us in a terrific position to service our end customers and to incrementally pick up share. Heading into the balance of the fiscal year, underlying demand or sell-through will determine net sales. As mentioned earlier, we are excited by our progress through early buy and expect to see the benefits over the next few quarters. This, combined with our ongoing investments and pricing, set us up for another strong year. From a market perspective, we see continued favorable trends in our internal and external forward-looking demand indicators. AZEK total website traffic increased double digits year-over-year, and overall leads increased over 50% over the same period in the prior year. Externally, our contractor and dealer engagement surveys reflect continued optimism with persistent project backlogs similar to prior quarters. Our confidence is underpinned by external demand indicators around repair and remodel activity, continued interest in outdoor living, and wood conversion accelerating over the past few years. In addition to these positive internal and external data points, we believe our focused strategy and consistent execution are continuing to drive success, as witnessed by our strong performance in early buy. Now I'll turn the call over to Pete to talk through the financials and guidance. Thanks, Jesse, and good morning, everyone. Before we get into the first quarter results, I wanted to provide some color on the operating environment that we've been seeing in the last couple of months. As expected, we continue to see strong price realization from our pricing actions that took effect at the beginning of the first quarter. On the material side, commodity prices have, and as a general matter, stabilized over the last 3-4 months. In our major commodities, polyethylene seems to have peaked late in the summer and early fall and has started to recede in the first quarter, while PVC prices appear to be flattening out this winter. Certain specialty materials remain challenged from both a pricing as well as a supply perspective. Our recycling strategy continues to be our defense against virgin supply challenges and serves as a natural buffer to inflation. Our capabilities to source, convert, validate, formulate, and deploy recycled materials in our manufacturing processes for PVC products continues to be a differentiator for us. Now let's discuss our first quarter 2022 results in more detail. Overall, revenue was in line with expectations for the quarter, while margins were modestly better than expected given some inventory capitalization timing. We continue to see price realization offset material inflation dollars and start to get very close to offsetting rate as we expected in Q1 2022. For the first quarter of 2022, we delivered net sales growth of 22% year-over-year to $259.7 million, with strong and broad-based growth in both our residential and commercial segments. Gross profit for the first quarter of 2022 increased $15.6 million or approximately 21% to $88.6 million. Gross profit margin rates decreased to 34.1% in 1Q 2022 compared to 34.4% in the prior year. Adjusted gross profit for the first quarter of 2022 increased by $18.3 million or approximately 21% to $107.1 million. Adjusted gross profit margin percent decreased to 41.2% in 1Q 2022 compared to 41.8% in the prior year. Selling and general administrative expenses increased by $9.7 million to $63.2 million or 24.3% of sales. Adjusted EBITDA for the quarter increased by $10.1 million or up 20.8% to $58.5 million. Adjusted EBITDA's margin rates for the quarter declined 30 basis points to 22.5% from 22.8% in the prior year. Net income increased by $6.6 million to $16.7 million for the quarter compared to $10.1 million for the same period last year. Earnings per share increased by $0.04 per share to $0.11 for the quarter compared to $0.07 per share for the same period last year. Adjusted net income was $28.8 million or $0.18 per share for the first quarter compared to adjusted net income of $23.1 million or $0.15 per share a year ago. Bouncing into our segment results, Residential segment sales for the quarter increased by $35.5 million or approximately 19% to $221.1 million. The increase was primarily attributable to broad-based growth in deck, rail, and accessories, and exteriors growing at comparable rates. Residential segment adjusted EBITDA for the quarter increased by $10.7 million or approximately 18% to $69.4 million. Commercial segment net sales for the quarter increased $11.9 million or 44.8% to $38.6 million. The increase was primarily attributable to higher net sales in both the Vycom and Scranton Products businesses. While each grew well in excess of the company average, we saw an acceleration in the Vycom business with continued strength in outdoor living, marine, and semiconductor end markets, continuing a trend from the prior quarter. Commercial segment adjusted EBITDA for the quarter increased by $1.4 million or approximately 43% to $4.7 million. From a balance sheet and cash flow perspective, we ended the quarter with cash and cash equivalents of $66.1 million and approximately $146.7 million available for future borrowings under our credit facility. Working capital, current assets minus current liabilities, was $274.5 million. Gross debt as of 12/31/2021 was $467.7 million, and our credit facility remains undrawn. Net debt was $401.6 million, and our net leverage ratio stood at 1.4 at the end of the first quarter. Capital expenditures for the quarter reached $65 million, largely driven by timing of cash outflows related to capacity expansion programs. Net cash consumed in operating activities was $30.6 million during the quarter versus net cash generated by operating activities of $20.3 million during the prior year. I want to provide some context to how we are viewing the second quarter and early view of the second half. As Jesse noted, we believe the combination of healthier channel inventory levels, improved lead times, and strong early buy participation positions us well for the upcoming season. We anticipate that supply chain and logistics environment will remain unchanged through the first half of the year, and our teams are prepared to deal with that complexity as they have over the last several quarters. Omicron did bring an added level of complexity to our business and supply chain in December and January, and we are appropriately managing through it. Commodity prices, as we had mentioned, have stabilized. The availability of major commodities is improving gradually, and we expect that to continue. The current environment supports our assumption of modest raw material deflation in the back half of this year. As detailed last quarter, we framed up the full year in two parts. The first half was slight margin dilution, followed by a stronger second half with margin accretion, excluding the impact of StruXure. We still see the first half 2022 coming in line with our expectations, and more importantly, we see organic business margin accretion in the second half of the fiscal year. As a reminder, during first quarter 2022, we had moderate startup costs that drove 70 basis points of headwind into our reported margins. Finally, with our latest acquisition of StruXure, we are excited to have acquired such a strong growing business in an identified adjacency. The purchase price was $90 million, and with revenue and cost synergies, we believe it will equate to a sub-10x multiple. The management team at StruXure is terrific, and they are incentivized to deliver for the combined company in the future years. To that end, we believe this business will grow at or above our long-term residential growth rates, and we believe it has the ability to expand margins to approach our corporate average over time while providing a strong return on invested capital to our shareholders. Now turning to our guidance. For full year fiscal 2022, we now expect consolidated net sales to increase approximately 17%-21% year-over-year, including $40 million of StruXure-related net sales contribution or 3 points of growth to fiscal 2022. Inclusive of the startup costs associated with our capital investment programs, we expect to deliver approximately 18%-22% adjusted EBITDA growth year-over-year, including nearly $5 million of StruXure-related EBITDA contribution. We see full year EBITDA margin dilution impact from the StruXure acquisition of approximately 30-40 basis points. For the second quarter of 2022, we expect consolidated net sales growth of approximately 24%-27% year-over-year, including approximately $8 million of StruXure-related net sales contribution. From an adjusted EBITDA perspective, which includes startup costs, we expect growth of approximately 17%-20% year-over-year, including approximately 50 basis points of StruXure-related EBITDA margin dilution impact. The quarter also includes approximately $2 million of startup expenses, which equates to approximately 50 basis points of our EBITDA margin. As a reminder, given seasonality and other factors, we expect the acquisitions will break even from a profitability perspective in the quarter. Looking forward for the entire business, and similar to our commentary at last quarter's call, we expect to see organic business leverage on our bottom line starting in the third quarter of 2022 and accelerating throughout the second half of 2022. To assist in modeling, we are reiterating our expectation of approximately $180 million-$200 million in capital expenditures for fiscal 2022. We continue to expect $21 million-$22 million of interest expense for the full year. Our tax rate for 2022 is estimated to be approximately 25%. Our full year weighted average diluted share count is expected to be approximately 157 million-158 million shares. I'll now turn it back to Jesse for some closing remarks. Thanks, Pete. AZEK has consistently outperformed over the last several years through strong focus, agility, and execution, combined with relentless focus on our customers. We are building upon that momentum and remain excited about the long-term opportunities in front of us. We have invested ahead of demand and are positioned to increase market share through an innovative and differentiated product portfolio, best-in-class sales execution, and a culture of continuous improvement. Combined with strong repair and remodel activity, sustained interest in outdoor living, and an acceleration in wood conversion trends, we believe we will deliver above-market sales growth and margin improvement. In other words, we believe we are well-positioned to win for the long term. Thanks again to all of our employees, our partners, our suppliers, our customers, and our contractors. We look forward to continuing to work together to build a brighter future. With that, operator, please open the lines for questions. At this time, I'd like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. In the interest of time, we would ask participants to limit themselves one question and one follow-up. Your first question comes from the line of Phil Ng with Jefferies. Your line is now open. Hey, guys. Good morning. I was curious, have you announced any incremental price increases since October, November timeframe, essentially last quarter? Stripping out some of the noise from the acquisition, is the price cost margin recovery path tracking pretty much in line with what you thought? You know, appreciating it's a pretty complex environment to operate in. Thanks, Phil. This is Peter. Yeah, I think our ratio on price versus inflation here as we look at the remainder of the year is entirely intact with how we guide it. We still expect to see price realization covering all four quarters of inflation dollars. We expect here very late in 2Q to start covering the rate. Maintain that throughout the back half of the year. As far as any additional price increases, we did take some very small targeted increases as part of our year-end kind of price maintenance process. Really it was a very select products, really those products impacted by the 4Q 2021 PVC increases that were a result of the Hurricane Ida situation. Again, in total, those price increases were very nominal compared to our 2021 price increases. Got it. That's really helpful. What does this recent acquisition that you made on the recycling side do on the capabilities and in terms of where you're gonna shake out from a recycling goal standpoint? I think last quarter you were kind of in that 54%-56% range, if I remember correctly. Any color how to think about the EBITDA contribution for this deal? Yeah. I think first and foremost, what this acquisition provides us is secure sourcing of the product. You know, this is a great avenue for, you know, us first and foremost, again, to help bring in some high-quality recycled PVC. Second thing is it adds capacity and just material flow that we think over time, this acquisition increases our PVC recycling capacity and access to product by about approximately 20%. As far as an impact on 2022, the way we're thinking about it is we would expect a modest cost savings in 4Q 2022, but the bulk of this is really gonna be a 2023 impact, and that's really just due to the formulation and validation work that we will be starting here this quarter and carrying over into the third quarter. Okay. Thanks a lot. I you know, the only thing I would add to that is the addition of our new capacity has allowed us to return our focus on expanding our use of recycled materials. We are now able to both service our customers and you know, expand our formulation work. We're not gonna guide specifically, but you know, we're in a really good position now as we look out over the next few quarters to continue to expand our use of recycled materials. Obviously, this is helpful. All right. Got it. Thanks a lot, Jesse. Your next question comes from the line of Matthew Bouley with Barclays. Your line is now open. Morning, everyone. Thank you for taking the questions and for all the detail and the prepared remarks as always. As that capacity has come online, you know, it sounds like you've made real tangible progress in improving service levels. If I'm hearing you correctly, your ability to target new customers is really crystallizing. Can you outline a little bit what that new customer opportunity is? Are there any pricing implications from going after new customers? I guess specifically if there's anything embedded in the revenue guide related to that. Thank you. Well, you know, clearly the addition of capacity, and improved service gives us an opportunity to make sure that we service our existing customer base. That's really provided a benefit in that we are now fully able to service current demand, able to meet the demand that we've built out, you know, over a number of years. But as you pointed out, we're able to now incrementally take on additional business. You know, so I would break it into really three different chunks. The first one is, you know, we've had opportunities to add to our dealer network, both in depth at our existing dealers, but also add new dealers, that really see the benefit of our differentiated product. We had had to constrain that over the last few years. We were more able to do that during this particular early buy season. As such, we've gained additional position. I think the second component is, you know, when you're constrained on capacity, as we mentioned on the last call, we haven't fully been able to launch our new products. Specifically, we called out in the prepared remarks our Edge product line, Prime+ and Prime, in addition to our Landmark product line in our more premium segment. Both those products have been constrained even though they have been launched. We now have an ability to unconstrain that, which will lead to natural growth. really the third bucket is really around, let's call it newer channels, and expanding geographically. I'm not gonna get into specifics there, but you know, we do have additional opportunity over the long term that we can now aggressively go after. you know, two buckets where I can provide some clarity, and I'll leave you a little bit of a fuzzy third bucket. Okay. Well, that's great detail there, Jesse. Thank you for that. I want to follow up on the acquisition of the PVC recycler, but maybe at a higher level. You know, obviously you did Return Polymers a couple of years ago. I just think it's important to kind of lay this all out, you know, helping investors kind of understand what you're doing on the PVC side. Can you kind of frame for us just the state of the PVC recycling market as it stands? And then just generally, you know, how your own efforts to do this internally will sort of expand that opportunity over time. Thank you. Yeah. Just taking the recycling market at a high level. I mean, we really deal with two streams of recycling, as you mentioned. One is on the polyethylene side, and that is a relatively well-developed market, whether it be high density polyethylene or low density polyethylene or the variants in between. So there is an established market. As we look at the PVC market, it is just a less established market. There are less players able to use recycled PVC. And as such, there's an opportunity for us to continue to build out our own capability and build out our use of recycled PVC. It's just a less developed market. In that environment, it's really important that we continue to build our own infrastructure to be able to access all of that material that's being landfilled. It is really important for us that we continue to build our own internal capability to source, to process, and to utilize increasing amounts of recycled PVC. This is just another step in that direction, in addition to previously announced capital expansions that we have ongoing at our existing facilities and within Return Polymers. Wonderful. Well, thank you for the color, and good luck. Appreciate it. Thank you. Your next question comes from the line of Timothy Wojs with Baird. Your line is open. Hey, good morning, everybody. Maybe just back on the early buy programs, Jesse. I guess what drives a dealer to stock inventory versus a competitor? Is it availability at this point, or is there kind of payment term incentives? I guess, just wondering, you know, with the stocking conversions, it does seem like you'll be able to kind of gain sellout share this year, if that's the idea. Am I kinda correct in assuming that? Let me answer that last question first. Obviously, being able to have access to more position in the market and more availability and more access to shelf space, you would hope that that would convert to ongoing growth in the market. You know, a key execution point is not only getting on the shelf but doing what we do and what we're most proud of, which is working with our contractors, working with consumers to make sure they see the value of the product so that we can pull it off the shelf. Clearly, it is a you know, in our mind, a positive step in the process of continuing to drive share against wood and other types of materials. Relative to the decision process, I think, you know, every one of our partners has a different set of criteria. Typically, these are reasonably sophisticated and well-sophisticated companies. They wanna make sure they partner with companies that have the ability to provide good service, the ability to have a product that's gonna sell, and also the ability to continue to work with them to grow their business. I would say in a lot of cases, those are the major drivers, you know, the combination of service, the right product, and the ability to drive their growth in the marketplace for the long term. That's really, you know, with our more realistic looking decking product and our better wood conversion exteriors products, you know, we are able to provide a better long-term value. Incrementally on the incentives, you know, we operate within a reasonable set of incentives to make sure that we're supporting long-term growth. In general, we're not a, you know, a price-driven or incentive-driven kind of a business. Our dealers are sophisticated enough to know that they're building something for the long term. Okay. Okay, good. That's helpful. Then I guess just on the year around SG&A as a percentage of revenue, how would you kind of balance that relative to maybe revenue growth and kinda maybe some increased brand spending as you kind of you know kind of increase that to as you layer in capacity? Look, I think in the back half of the year, we will continue as we have through the first half to make strategic investments in sales and marketing. We are a growth company, and so, you know, that has stepped up a bit in the first quarter year-over-year, especially with a more normalized kind of TimberTech Championship event. Again, as we see creating our own demand in the back half of the year, you know, marketing's gonna be a focal point here throughout the year. Okay. Could you get leverage from here or is it just gonna grow a little faster? I'll just add, Tim. I'm sorry. I think it's important for us to continue to support our growth. You know, part of this is being appropriate on leverage. A key part of it is also, if we see opportunity, we're gonna continue to invest against that opportunity as we're building this for the long term. I'm sorry, I cut you off there, Tim, on your second question. Oh, yeah. No, I was just wondering, would you be able to get SG&A leverage this year, or do you think it might grow just a little faster than sales? Yeah. I mean, historically, we've kind of articulated the ambition that in most years we'd like to see ourselves get modest SG&A leverage. Okay. Okay, got it. It's not gonna be- Thanks, all. consistent every quarter, but as a year, that's kind of our ambition. Okay, great. Well, thanks for everything, guys. Appreciate it. appreciate it. Thanks, Tim. Your next question comes from the line of Michael Rehaut with JPMorgan. Your line is now open. Hi, this is Maggie on for Mike. First, just a couple questions related to the capacity expansion. I believe you said in 1Q, startup costs were a 70 basis points headwind, and they're expected at 50 basis points in 2Q. As you go through this year, what is your full year guidance contemplating in terms of startup costs? And also- Yeah. Yeah, go ahead. Yeah, as we kind of articulated on the full year guidance call, you know, we're looking at $8 million-$10 million. I think that's still the right range for the full year, which sort of implies that dilution range of kinda, call it, 50-70 basis points. Got it. A second, another quick one. As the capacity comes online, you mentioned those three buckets of kind of sales growth opportunities, and the third fuzzy bucket that you didn't wanna get into was newer channels and expanding geographically. Do you have any sort of a timeframe on when you might start exploring those opportunities more? Yeah. You know, I think the key for us is, you know, if you look at our portfolio of growth actions, right? You know, downstream sales and marketing continue to expand our channel, new products and acquisitions. You know, that portfolio of actions on growth is just something we are continually working on. I just wanna highlight a lot of what we do, you know, may seem transactional, but you know, even in the situation where we had some positive early buy wins, you know, we've been working with those accounts for, you know, a couple of years and in some cases, multiple years. I think the way to think of our growth scenarios is, you know, we do things continually and we're doing things over the long haul in those buckets I talked about. It's an ongoing process. As we have this additional capacity, we can execute against it, and that's something I referred to on the last call. Got it. Thank you. Your next question comes from the line of Ryan Merkel with William Blair. Your line is now open. Thanks, and good morning. Jesse, first off, I was hoping you could address two concerns that investors have. Potential for pull forward demand, just given everyone rushed to do outdoor living. Then also higher prices, if there's gonna be any impact on demand from that. Well, any evidence? What's your view? Yeah. You know, as we've looked at our leading indicators, and you know, our activity in the market, there's been really nice, consistent activity and growth. You know, as we talked about during the calls over the last 18 months, you know, we do believe that as people continue to use our types of materials, so you know, take decking as an example. As they focus on outdoor living, they continue to expand the use of you know, our types of materials. What you see is that that material on the ground leads to other people being aware of that material and using that material. It gets back to that neighborhood effect, right? Someone in your neighborhood has installed our product. They've got a beautiful TimberTech deck. The perception historically may have been composites didn't look that good. Neighbors come over and they start then moving in that direction. You know, clearly the activity that we've seen during the pandemic has led to a greater interest. We see that as an opportunity as basically additional locations that can drive additional growth. I think some of the volatility that you're gonna see in you know some of the numbers quarter to quarter across our industry, it has as much to do with channel fill. I think if you peel back the underlying demand, you would see pretty strong, consistent demand quarter to quarter. As we project moving forward, you know, we continue to assume that, you know, that kind of activity will continue. I forgot your second question. I'm sorry. Just higher prices. You know, have you seen that impact demand maybe even for PVC, such a, you know, such a high-end product? Any risk there? Yeah. We've you know, as we've looked at our activity in the marketplace, and we've done a lot of analytics related to our value in market of our products. We continue to see a great value proposition in each of the categories that we play, given the pricing that we have. You know, we continue to see that play out. We have not seen a slowdown of momentum. Just as a reminder, if you go to our investor deck, you can see on a relative basis, the cost of our types of material on a deck are a small part of the overall cost of a deck. We have multiple pricing options depending on where our consumers are. I think the other key thing for us, we've got such great-looking products, that we do tend to skew a little bit more to a less price sensitive consumer, especially as you're looking at the price over the long term. We see a similar opportunity, as we're driving wood penetration and wood conversion, in our exteriors business. Got it. That's helpful. All right. Then a quick follow-up. I know guidance for the year assumes high single-digit volume growth. My question is, if sell-through is stronger, do you have the capacity to deliver upside to that high single-digit? It sounds like yes, but I just wanna confirm. Yes. Yeah. I mean, our capacity right now, we are now, and we mentioned this on the last call that that was gonna be the case, the case. With the additional capacity that we have brought online, in our fiscal first quarter, we now have the ability to meet and exceed production against what we see as our future demand profile, and we have additional capacity coming online. We are very much in a position where, you know, which is where we said we wanted to be, where we can service meaningfully larger volumes for, you know, for this year, and certainly into next year. It's great to hear. I'll pass it on. Thanks, Jesse. Your next question comes from the line of Susan Maklari with Goldman Sachs. Your line is now open. Thank you. Good morning, everyone. My first question is. Good morning. You know, obviously, there's been a lot of, you know, sort of uncertainty around the housing market in general as we face the potential for a rising rate environment. Can you talk about the ability to continue to drive growth even if the housing complex does change? I guess with that, any commentary on how most consumers tend to fund these projects and, you know, what is the role of them having to perhaps borrow against the house or, you know, other methods of them sort of financing these things? Yeah. You know, on that, on the latter comment, we typically don't see our consumers, and this is. It's hard to get exact data. On the data that we have, we typically don't see consumers financing our types of repair and remodel projects you know, drawing on the equity of their homes. And then relative to the macro environment, you know, on a relative basis, you're gonna hear this probably from a number of building products and home builder CEOs in earnings call. On a relative basis, you know, we still see incredible strength in this particular segment. If you look at the dynamics of you know, the interest rate environment we're in, it is still at historically low levels. We see a historically low level of inventory on the market. We see really strong housing values, and we continue to see the demographic dynamics of more homeowners coming into the market. You know, for the foreseeable future, from what we can see from the data, you know, we're in the housing sector and the repair and remodel sector is in a nice position to continue focused on growth in the future. I think more specifically to our sector, you're dealing with an increased focus on outdoor living, and you're also dealing with the opportunity that we have that I mentioned on the call that we'll talk about probably on every call, which is there are a lot of sales right now in products that should be our types of products, right? You know, we continue to see an opportunity to convert wood in all of our products and convert other types of materials. Against that backdrop, there's certainly interest rate noise, but you know, we continue to see a multiyear opportunity here with the combination of the macro environment and then our more specific environment, which is driven by material conversion, new products, and a focus on outdoor living. Okay. That's very helpful color. Thank you. Following up, you know, you talked a lot about the exteriors business in your commentary. Can you give us a little bit more color on your ability to service that market, how you're thinking about the future growth rates there, and any other sort of upcoming initiatives that we should be aware of or thinking of? Yeah. We're really excited by you know what we've been able to do in that business. As a reminder, in that particular business, we have you know two major brands, AZEK and Versatex. Both of those brands bring innovation to market. That innovation is really driven around driving contractor productivity and driven around providing a great alternative to wood. If you think about all the aging of a home, you know it's the paint peeling on your trim that can be some of the most annoying and the paint peeling on the outside of the house. We have solutions that drive contractor productivity and at the same time provide a terrific consumer benefit. Against that, we continue to invest in new products. We continue to invest in channel expansion. We continue to invest in our downstream sales and marketing efforts with not only consumers, but the other elements of the chain. As I pointed out in my prepared remarks, we're really seeing benefits of that. You know, once people get used to using our types of materials in new geographies, they tend to you know, it's not a one-time purchase. They tend to use that material, and then they tend to expand the use of that material. We're excited by the you know, the beachheads that we've continued to establish over the last year and expect to continue to establish. Relative to specific growth rate, you know, we haven't guided on that particular business outside of our deck, rail, and accessories business and now our pergolas business. We all, you know, we view that the growth opportunities are similar in all of our outdoor living and residential businesses. Okay. Thank you. That's very helpful, and good luck with everything. Thank you. Appreciate it. Your next question comes from the line of Ketan Mamtora with BMO Capital Markets. Your line is now open. Good morning, and thanks for taking my question. Just a first question on the StruXure acquisition. You know, kind of what, you know, sort of what makes this an attractive category as you guys look at the broader outdoor living space? Maybe talk about the material conversion opportunity that's in front of you, when you look at sort of the, you know, the pergolas and the cabanas business and even the sort of the multiyear margin improvement runway. Yeah. I'll take the market, and I'll have Pete touch upon you know, what we've done with other acquisitions and the margin progression there. The way to think of it and what got us most Our project name for this particular acquisition was called Project Sky. I think it's apropos, right? Right now, we produce effectively an outdoor decking product, which is the flooring. We've got an exteriors product, which let's call it the walls of an outdoor living space. As we continue to look at framing outdoor spaces you know, from creating an outdoor room a pergola is a natural kind of demarcation. What StruXure really is about is creating comfort in outdoor living spaces, right? It's got a louvered system. It can let the sun in when it's sunny. It can louver to protect from the elements if it's rainy. What it does is it's a natural step to creating comfort in the outdoor area, and it's extremely complementary to what we have. Now, we have, you know, some custom pergola kits and so on that are out there right now. This really gives us scale in that market. As you think about the long-term conversion opportunity, most pergolas right now are constructed in a what we call stick-built way, right? You know, it's fabricating products, whether it's out of aluminum or out of wood, and in some cases also out of AZEK and Versatex. It's really a fabricated process, whereas you know, what StruXure is doing is making that process much more efficient. In their higher end products, making it more customizable. As we move to some of the other products we'll show at the builder show, it's more of a standard solution that you know can quickly be assembled on-site. As we highlighted, we view the opportunity of really creating these outdoor overhead pergolas and cabanas as a growing trend. Think about houses, how much time we spend outdoors. Think about the other spaces that are out there in the commercial businesses. We view this as a billion-dollar market opportunity, and we also view the opportunity to create a lot of synergy with what we're already doing and what they can do. I think the other thing this presents us is, as I mentioned on the call, their products also go down on hardscapes, right? It allows us, you know, to get at certain geographies where there may not be a deck on the ground, but certainly they need some of the other aspects of what we can provide. Relative to the margin structure, I, you know, I'll turn it over to Pete for just a couple of quick comments there. Yeah. Thanks, Ketan. Ultimately, look, the margin expansion story for StruXure is very similar to AZEK. The levers that we see pulling as a team together, I'd put in a couple of buckets. First and foremost, you know, growth. We feel like we can accelerate an already fast-growing business, given our strength in the channel and our contracting partners. Certainly helping with just leverage with faster growth. Second bucket I would call sourcing. You know, as we know, we've got a meaningful aluminum rail business ourselves, and we look at the synergies together in purchasing power. I think there's a way for us to buy more efficiently and effectively on a combined basis. Third one is just, I think, our ability to kind of drive some of the AMES kind of ops toolbox into the StruXure business. I think is gonna help them drive more productivity and probably overall just stronger throughput, in a way that they support their growth looking forward. The last bucket I would kind of say is again, very similar to AZEK, in this pricing/commodity situation or the structural opportunity with margins that the StruXure team has priced for value in the pergola space. As aluminum sits here at historically very high prices, when it recedes, we see that same opportunity that we have on PVC that their pricing is gonna be pretty sticky, and they should have an opportunity again to kind of more meaningfully change their margin structure. Got it. That's very helpful color. I'll turn it over. Your next question comes from the line of John Lovallo. You're with UBS. Your line is now open. Good morning, everyone, and thank you for taking my questions. The first one, and maybe for you, Pete, is, you know, can you quantify how much polyethylene deflation you experienced on a quarter-over-quarter basis? You know, how does this compare to what's embedded in the full-year outlook? Yes. As we mentioned, you know, we're not expecting a lot of deflation in the second quarter. That's kind of what most of the indexes project, and that's kind of what we see. As far as what we're anticipating seeing in the back half of the year, I'd kind of call it net/net, very similar to what we expected at the beginning of the year with our guidance. I would kind of say, if there's anything that's modestly different, I would say it's probably the slope on polyethylene deflation's probably a little slower, but there's probably an opportunity for modestly more PVC. But net/net, those are about a wash as we think about the business. Again, you know, I'd leave you with the takeaway of what we can see in front of us here entering the second quarter, I think supports the modest deflation that we've assumed in our guidance. Okay. Maybe just to follow up on that. You know, if we were to assume that polyethylene and PVC declined by, call it, 10%. You know, from today's levels, how much would that benefit second half margins? Yeah. I mean, you know, it's a good opportunity here for me to educate folks on, you know, when we think about our balance sheet lag as a business, you know, let's start there. From a material perspective, a rollback typically is 3-4 months, and typically this time of year with inventory being a little bit elevated, it's closer to the four months. Where labor and overhead tends to be pretty constant throughout the cycle at about two months. What that really implies is that, you know, ultimately, if we see commodity prices drop more steeply, but it comes after like, let's say, the middle of May, it's very difficult for us to really recognize or see any of that impact in our 2022 results. It just becomes upside for 2023. Got it. Thank you. Your next question comes from the line of Trey Grooms with Stephens. Your line is now open. Hey, good morning. Thank you for taking my questions. Just, I guess, the first thing is on the supply chain issues out there. You know, Omicron brought some challenges you mentioned in December and January. You know, are you seeing any changes in that there? Are you anticipating any change in the 2Q guide? No, you know, I think embedded in our second quarter guide is the fact that, again, some of the favorability in Q1 was sort of timing that works its way through in the second quarter, and that we see the first half of 2022 kinda expectations exactly where we expected. Omicron was definitely disruptive, but look, the last year and a half to two years has been very disruptive from a supply chain perspective. We've said on previous calls, our teams have really done a nice job continuing to manage through no matter what the environment is. You know, we think we're well prepared, you know, from our own, you know, visibility here in January or as we get to the first week of February. It feels like from an absenteeism perspective, most of the varying impacts kinda crested in the third week of January, and we're starting to now see that taper off. We think the worst of it is behind us and we're optimistic about the second quarter. I would just stress you know it's our team you know we try not to use too many superlatives right? You know 'cause we're doing our jobs. I think the team has done a remarkable job of managing through the volatility to the point that we're not talking about it much on the call. There has clearly been a lot of moving parts relative to things like labor supply chain all of those elements. We've been able to manage that within the operating cadence of the business such that we continue to service customers uninterrupted. We continue to deliver against our financial objectives. It really is an outcome of some really strong operational management and also planning for the volatility, which I think the team has done a nice job of. Great. Thanks for that, Jesse. I guess earlier and I've dropped off the call, so apologies if you touched on this. I think you mentioned sell-through grew modestly and accelerated through December. Did that acceleration continue through January or, you know, what did you see there? You know, the full year guide assumes high single digit volume growth. What is the assumption for 2Q, if you could? Yeah. I would just say at a high level, you know, relative to sell-through, you know, as you know, you've been around this industry, but you know, we're in the low season, where there's still clearly activity. We still see strong backlogs. We still see contractors needing to work. You know, we still see consistent sell-through. We're not gonna get into specifics on either the quarter or you know, what we see beyond what we've disclosed, except to say that you know, there's nothing inconsistent that we're seeing now with you know, with our expectations. We feel pretty good about our ability, once we get into the full season to continue to, you know, to meet our growth objectives. We're confident in our ability to, you know, achieve our guide overall. We're not gonna parse kind of the volume or anything, you know, specific sell-through, especially at this time of the year. As you might imagine, there's day-to-day volatility just based on, you know, the snow melted or the snow fell. In general, it's been good. Yeah. I understand that, and I just wanted to touch on it because I thought it interesting, you know, given the time of year that it actually accelerated through December, given the, you know, that it is a seasonally kind of cold, wet, you know, and holidays and that type of thing. Anyway, just wanted to touch on it, but thanks again for taking my questions and good luck. Yeah. I mean, it probably, you know, it is much. I think we're gonna move to a more normalized conversation about the month-to-month sell-through, which will be a mix of kind of backlog and weather and all those other normal things at this time of the year. Clearly we've had a backlog, so that we expect to continue. Understood. Thank you again. Your next question comes from the line of Mike Dahl with RBC Capital Markets. Your line is now open. Hi. Thanks for fitting me in. I have a couple follow-up questions around structure and M&A or adjacencies in general. The first question, it's kind of multi-part. Jesse, can you talk more about StruXure's go-to-market, what their channel exposure is like, and you know, when you look at your customer base, your dealers, your retailers, what percentage of your customers already stock some sort of product like this? Maybe could you also tie in what the capacity is currently for StruXure and do you need to make additional investments there? Let me start just at a high level. StruXure's products are products that are delivered to people that install the product. The nature of a lot of the business is, you know, the product is specified by someone who's gonna install it. The orders then go through and the product is delivered. In some cases, you're using standard components. Those products are inventoried by the installer. At a high level, where we see the current synergy is a number of our contractors are StruXure installers, right? They will source our types of products through their normal channel. They'll work directly with StruXure to have those kinds of products delivered. Then there's another set of folks that are StruXure dealers and installers. If you go to the website, you can interact with one of them. They'll come out, give you a quote, and do a really nice job of installing the product. That's its current state. I think, without getting too specific, as we move forward, there's an opportunity to really expand our position and StruXure's position, especially with that contractor base. That contractor base, in many cases, our contractor base, which is tens of thousands, might just be using or building their own or designing their own or, you know, needing a product like StruXure. We see an opportunity from a synergy standpoint to continue to build out those points of deployment, you know, leveraging our current network and working together with StruXure's current network. You know, I won't get into specifics, but there's a portfolio difference. You know, there's other implications relative to how we do that. But over the long term, there's clearly opportunity there. I'll just. Pete, I'll just take the you know the capacity comment very high level on StruXure. StruXure you know has you know is certainly at this point full. It's you know there is an opportunity to work with the StruXure team to continue to increase throughput continue to reduce lead times continue to expand their ability to meet market demand. You know in some cases that might be modest capital but in a lot of cases it's just debottlenecking their current process. We see a you know great opportunity as a combined entity to not only get synergy on the margin side that Pete talked about through sourcing and working through our AIMS program, but we also see an opportunity to scale their production capability to better meet the needs of customers. Some of that has to do with just capital deployment when it comes to working capital. Some of that has to do with which naturally we have a greater ability to do, and some of that just has to do with you know continuing to invest in debottlenecking and improving their processes. Okay. That's really helpful. Then my second question or follow-up, a little bit more holistically, you do have the aluminum rail business, but this is an acquisition that kind of takes you further into additional material conversion, you know, when you're getting into metals and aluminum. When you look around the backyard of a house or the exterior of a house, there's still a lot of different verticals that would be potential for material conversion. How do you think about the broader opportunity? At this point in your life cycle, kind of how aggressive would you be willing to kind of go after further, maybe larger acquisitions in some of these adjacencies? You know, we really like our business model. We like the opportunity for differentiated products that are you know where we can get paid for the value that we add. We like the opportunity for material replacement. We like the opportunity you know with the focus on outdoor living and that secular growth trend. Clearly, you know, as the StruXure acquisition highlights, we also like the opportunity to continue to expand our position there. We are comfortable already with the three material sets that we talked about, polyethylene, PVC, and aluminum. This just builds on that. You know, to your point, over the long term, we continue to see opportunities to be more relevant in that outdoor space. We're gonna wanna stick to the growth, margin, brand and price profile that we've had. As we navigate through that, we'll selectively look at acquisitions that meet those criteria. I think as I've said prior to these most recent two acquisitions, if you look at what we have acquired in the past, we're now at five acquisitions in the last few years. It's probably indicative of you know the kinds of things we would look at in the future. We just see a huge runway and a huge opportunity to become the player as we look at driving growth in our market segment. That's great. Thanks, Jesse. This concludes the question-and-answer session. I will now turn the call back over to Jesse Singh. I really appreciate all of you taking the time to join us today. As always, feel free to follow up with additional questions. For those of you that will be at the Builder Show, we will have a nice outdoor living area for you to come spend some time with us. Thanks again for your time, and have a great day. This concludes today's conference call. Thank you for attending. You may now disconnect.