The replacement market also see good solid demand trends. We also think fundamentally in both our markets, the demand is mostly nondiscretionary. Given that we have 80% of replacement, a roof is typically something that you have to replace if something wears out or goes wrong. Now on the commercial side, we also see positive trends. The last year or so has been incredibly difficult to handle on the commercial side of construction. With all of the supply chain challenges that we faced, it's been really difficult to manage that. I think we see that easing somewhat at the moment. We're seeing the supply chain work its way through some of the issues, and we see strong demand down the road. We've talked a lot about our backlog growing, and we're starting to see that come through in our sales. We believe that overall, the long run history of commercial roofing has generally followed the long run of residential, lagged. We see a good macro environment overall for commercial construction and residential construction. Again, in commercial, the interesting part of it is codes are continuing to evolve, and a big part of the code evolution in commercial construction is to greater amounts of insulation. Insulation is one of the key products that we sell. As codes improve in commercial construction, more and more insulation, more and more product is used. When a replacement roof is done, they take all of the insulation off and rebuild it back up. We see strong demand in that environment over the next several years. We also think that we are very well positioned in what is still a fragmented market. I talked about the complementary business, but overall, we think our addressable market represents about $54 billion of opportunity. The majority of that is in roofing, but still the complementary business represents about $24 billion of opportunity. I wanna emphasize that we think that's the addressable market for Beacon. Ultimately, the windows, doors, siding business is actually larger than that, but much of that goes through specialty businesses as well, lumber yards. This is the market that we believe we can get at. Also, we think we're very well positioned in terms of how the market is structured. Obviously, over the last 20 years or so, we've seen some consolidation in the industry, but 45% of the market is still fragmented. We believe 45% is represented by about 1,000 or so companies. Most of them are small, privately held family businesses, just like we once were. Just like we grew, we see the opportunity in that market for further consolidation. We think there's a great opportunity there. We also think that we have advantages over that segment of the market. Certainly scale advantages, but as we'll talk about in a minute, other advantages as well. We think that's the opportunity for us to grow. We also have a great value proposition, not just to our customers, but also to our suppliers. We play a vital role in the supply chain of building materials. Distribution has always played a vital role in the building materials industry in the U.S., and has grown as such. To our suppliers, what we see is that we have fixed locations that they can send truckload quantities to, so that they can manage their freight expense. They look to us to provide that last mile logistics, the break bulk and ship through. We're also a store of inventory, which helps them manage their assets. Having spent most of my career in the manufacturing side, running those assets efficiently is the key to the profitability on the manufacturing side. All of the building materials businesses have seasonality to them. The ability for us to help our manufacturers to manage their supply chains so that they can run their assets efficiently is a tremendous value. You see the types of warehouses that we have all over the country as we manage inventory over a seasonal cycle. To our customers, I think that the services and the value propositions we offer are manifest. One of the critical ones that we do, and it's been so important during the last year and a half, which have been challenged by supply chains, is the ability to put together packages for job sites. You know, we've talked about the challenge over the last six months or so, particularly in the commercial construction, when some of the products are available, but whole sections of the market are not. We've been able to take in certain products and store them, take the orders, but not able to ship as we're coming in because certain products have not been available. That kitting process, that managing the supply chain for our customers has been absolutely essential. I think that what you'll see is what's happened over the last six months or so is that's really been reinforced with our customer base when you just can't get certain products. We're able to take it in, we're able to build packages for them to get to the job site. Obviously, we provide a lot of technical support, job questions, product knowledge. One of the key things that we do that is really hard is delivery to a job site in a residential neighborhood where it's a roof load market. Doing that requires specialized equipment, requires technical skills, and requires drivers and helpers with an enormous amount of skill. That's a great offering that we provide, and it saves our contractors time and money, and we can do it safely. That brings me to what I think is one of the key moments for us, which is determining what our competitive advantages are and really thinking about how we leverage this in our space. Obviously, we think scale is a competitive advantage. We think it's been critical for us to build that scale to position Beacon as a leader in this industry, and we think there are huge benefits to scale. Certainly, on the purchasing side, we see those benefits, but we also think those benefits extend well beyond that, not just about leveraging and absorption of G&A, but also in some of the other areas. Our second competitive advantage is our network model, which is differentiated from all our competitors in the industry. You can't create a network model if you don't have scale. Even if you do have scale, you have to make a choice to be networked in the way we are. We've talked repeatedly about our on-time and complete network, and you'll hear more about that today and the benefits it provides to our customers. But that choice to connect the branches in a local market to serve the customers so that you can optimize inventory, service, freight, talent, all the things that we talk about, is a choice that we made several years ago. To build that out, to centralize dispatch, to connect the branches, to go to a market P&L, that is a choice that we've made that we think serves the customers differently and better. You need scale, but you have to make that choice. The third competitive advantage that we believe we have is the specialized capabilities that we've built. Again, scale helps with this, but it is a choice where to focus. We were really the first company in the roofing space to go towards digital as a platform for sales and serving customers. We've built that out, and you'll hear later on how that is accelerating both margin and sales for us. We think that's a key differentiator. Again, without scale, it's difficult to build. Leveraging that investment across 450 locations and millions of transactions is really powerful. We're also able to have our TRI-BUILT private label. Again, without scale, that's incredibly difficult to build. Even with scale, it's a choice to go down that path, and that's another big differentiator for us. We think we can build a national brand. Clearly, it's margin accretive, and we think it helps us in a number of different ways, differentiate us from our competitors and serve the customers better. It is through these three competitive advantages that we believe that we can win every day in the marketplace. Over the last year, we've been engaging our team. We spent a lot of time with our field organization, and we asked them a different question. We didn't ask them, "How do you think you can do against budget?" We changed the nature of the question, and we asked them, "What do you think is possible?" They came back to us with the answer. If we've got the resources and the commitment to execute against this plan, we can grow. We talked yesterday about building a winning culture and our commitment to our values, doing the right thing, investing in our communities. Today, we'll talk about how we will grow, how we will drive operational excellence, and how we will drive shareholder value. Let me go over some of the highlights of our financial plan for the next four years. We will grow the business more than $2 billion- $9 billion of sales in 2025. An 8% compound growth rate. Our EBITDA will grow from $686 million in 2021 to about $1 billion in 2025, about a 10% annual growth rate. The math's easy. That's an 11% EBITDA margin. On the sales side, we will do it in four different ways. We think the market will, for us, will grow about $400 million. We think we can drive above-market growth and open greenfield locations to drive an additional $900 million of sales. Market plus our go-to-market initiatives, plus greenfields represents about 5% growth rate. In addition to that, we believe we will drive $1 billion worth of revenue from M&A over the next four years. We've been largely absent from the greenfield and M&A space for the last several years, and quite frankly, it's been a drag for two reasons. One, it's been a drag, but seriously, it's actually pulling our numbers down further than it should. Greenfield locations take a while to mature, and when you're absent for it creates this air pocket through which we are now working. We are committed to greenfield locations, and we will invest to ensure that we have them, and we're consistent, consistently entering new markets and new locations. The second component to our long-range plan is driving our margins. Two components to our margin profile. The first is gross margin, and the second is our operating expenses. We've talked a lot about the inventory profits, and you see, we think the inventory profits will roll off over the next year or so and be a little bit of a headwind for us. We think we've got several areas that are gonna drive margin improvement. Our digital and private label, again, you'll hear more about, but you saw them at the hub yesterday. Those are critical important margin accretive investments that we're gonna continue to make to grow. We think we've gone from leader to laggard in pricing. I think we've demonstrated over the last 18 months a real commitment to pricing excellence, and we've led in this space. We will do more. We think there's a tremendous opportunity, and you'll hear more about that today. We've talked a lot about our bottom quintile process and our bottom quintile branches and the improvement we've made. On my very first earnings call for Beacon, I think we said $30 million-$60 million of improvement over an unspecified period of time, and we've delivered $75 million over the last two years as we've really focused on driving improvements in that group. That quintile process has changed the nature of how we think about our operations. Again, something you'll hear more about later, but there's more in the tank. As I said, greenfields and M&A, they're gonna be a little bit of a drag because as they reach maturity, we think they'll be a little bit decretive for the next few years. Ultimately, that's a commitment that we're willing to take. On adjusted operating expenses, we've already reached record levels for the company in terms of efficiency, but we think we've got more to go. A mindset about productivity offsetting inflation and beating it is critical to what we do. We will certainly see some headwinds, we'll see some inflation, and we are going to invest. We absolutely are confident that we can drive efficiency through this company to increase our opportunity to drive the margins higher. We will certainly invest to grow. We think this is a strong investment thesis. We've focused the business. We've adjusted the portfolio to really focus on what we think are our core markets, residential roofing and commercial roofing. We've got strong market fundamentals. We genuinely believe that the markets we're in will see growth over the next several years, and we think we're well positioned in those markets to capitalize on that. We're going to reinvigorate our growth engine. For many years, Beacon grew quickly, but it was really focused on the M&A side of things. We are going to have a much more balanced. We're gonna have multiple paths to growth. We've got demonstrated ability over the last two years to execute. As I said yesterday, one of the things that I've been most impressed with and most proud of over the last two years is the ability of our field teams to execute under duress. Dealing with pandemics, dealing with the type of inflation, dealing with the type of supply chain challenges that we've faced, any one of those is difficult. Having all three of them at the same time has been extraordinarily challenging for our field teams, and they have excelled. Lastly, we're committed to our shareholders and driving returns substantially greater than we've seen over the last several years. For those of you that have checked your emails, we announced this morning a $500 million buyback authorization. We are committed to returning capital to our shareholders, and we think that this is a strong investment thesis. Now I'm gonna turn it over to my colleagues and ask them to come up and go into greater detail on each of our elements. With that, Jonathan Bennett, our Chief Commercial Officer. Thank you. Good morning, everybody. I'm Jonathan Bennett, Chief Commercial Officer at Beacon Building Products. I joined Beacon in the summer of last year. I'm responsible for supply chain, pricing, our national account sales and sales enablement teams, marketing, and digital. My career has been primarily in merchandising, in supply chain, in pricing, and in advanced analytics in a few companies, The Home Depot, a company called Interline Brands, which is now known as Home Depot Pro, and Total Wine & More. I'm very, very excited to be here today to, along with my colleagues, take you through how we're gonna achieve the growth to $9 billion in sales and $1 billion in EBITDA through 100 basis points of margin expansion as part of Ambition 2025. Let me show you how we're gonna do that. This chart really gives you a survey of what we'll be going through over the next hour or so, and really in four key quadrants. The first is our initiatives around enhanced customer service. That, together with our new go-to-market strategy, will deliver $700 million of growth as part of our Ambition 2025. Next, you'll hear about our footprint expansion strategy, which is a combination of greenfield locations and mergers and acquisitions, which together will deliver an additional $1.2 billion of growth. Finally, we'll look at a series of margin-enhancing initiatives that support 100 basis points of margin growth as part of our plan. Let's get started. Let's begin with our strategy around enhanced customer experience. When we think about the customer experience, we really think about two fundamental things. First, our brand. What is our promise? What do we stand for? Second, what is our service delivery model? Why is it different than the competition? Why does it matter to the customer? That's what we're gonna talk with you about this morning. As many of you are familiar, Beacon is the sum of many acquisitions, over 40 over decades. Wonderful, powerful, local brands that, in most cases, continued to reside under our umbrella for some period of time after their acquisition. In fact, only until recently have we attempted to unify these brands under one national brand, Beacon. What is the significance of that? Well, according to our research, our market awareness, our brand awareness among the relevant customers in the markets we serve is low. It's 45%. 45% of the customers, the roofing contractors that operate in the markets we serve, are aware that Beacon is available to serve them. An additional 26% are only aware of the originating brand that we acquired. We see that as presenting a huge opportunity to take advantage of the scale that Julian has referred to drive more awareness, more consideration, and more trial of Beacon in the marketplace. We've been working with our agencies to figure out, okay, what is our brand promise? What do we stand for in the market? What are we gonna commit to customers? This really lays it out for you. Our mission is to empower customers to build more for their customers, their business, and their community, and their family through world-class service and innovative solutions. That's what we stand for. We're gonna take that message through a brand campaign that will launch this year across not only our 450 branches, which have been unified and are being unified under the Beacon brand, our 2,300 trucks, which you could call rolling advertisements, and our unified digital experience, formerly over 40 different web properties, now one singular website. You think about the opportunity to drive market awareness of Beacon and the importance of digital to our strategy. This will play a big part in where our investments from a media standpoint are concerned. Now, I wanna give you a feel for the themes and the marketing communication positioning that will be part of this campaign. Please watch this. There's a reason why every day more roofing contractors are choosing to partner with Beacon, because we're always listening and learning so we can be the best partner to them. We're always striving to save our customers time, right by their side and ready to jump in when they need us. Or better yet, before. We're always operating locally. Our network of branches means they don't just get one knowledgeable partner, they get a whole team of experts. We're always thinking ahead, creating practical innovations, so that we're always with them, whether on or off site. We're always growing. Expanding our fleet means roofers don't just get what they need, they get it where and when they need it. We're always evolving, because our customers want a trusted partner that's striving to build something better for our communities. We're always ready to roll up our sleeves and get to work. We're always ready for the expected and the unexpected. We're always forging relationships that last past a single project, so we're with our customers from start to finish, and start to finish, and start to finish. Because we're more than suppliers, more than distributors, more than great partners. We are builders. Beacon. Always building. I can't wait to take that powerful message about partnership, about innovation, about building out into the marketplace and make that commitment. Once we make that co-commitment, we have to deliver on it every day, start to finish, start to finish, just as set forth in that, in that video. How are we going to do that? Well, it starts with our competitive positioning, which we believe uniquely positions Beacon to deliver a superior customer experience in ways that matter to the customer, in ways that will influence where they spend their money. Joining me on the stage now to talk about our strategy around customer service to drive market share is Jake Gosa, our President of the North Division. Hey, Jake. Morning. Thank you, Jonathan. Good morning, everybody, and thank you again for being with us. You know, when we set out to address an effective customer service model, we decided to do a deep dive and research into the business. We spoke to over 1,000 contractors. The process, you know, for me as an operator, was particularly effective. It did reaffirm some beliefs that we had in and around the customer experience, but it also highlighted some opportunities. Customers tell us that there are five critical moments in the experience that matter to them the most. All right? If we can make a difference in those moments, we can drive business with a customer. How effective we are in those moments ultimately determine whether or not they continue to buy from us or look elsewhere. What you see on the screen are some cartoons around the five experiences, but I just wanna touch on each of them to provide some context. Okay? When the customers talk about coverage, that really goes beyond the outside sales rep that is assigned to them. That gets at the support team behind that rep. The support team behind the scenes in the branch. They want a quality team, and they want an experience. In terms of ordering, customers today want multiple options, and it's official, digital is a priority to the customer now. In terms of delivery, this has not changed over time. Customers want accurate orders, and they want them delivered on time. Issue resolution was particularly interesting to us, and I think a real opportunity. Customers make it clear that they expect us to respond appropriately when we make errors. What they also want is they want a partner who can help them manage their business. They make mistakes. They have a complicated business where surprises come up, and they need someone who can step in and help them work out those opportunities. Finally, invoicing. Customers obviously wanna be invoiced accurately, but again, around the theme of technology, they want digital options. Again, customers have made it clear. If we can impact these moments in the right way, we can drive wallet share. The reason for that is because, at least in the customer's mind, distribution is largely at service parity. I wanna say that again. In the customer's mind today, distribution is largely at service parity. If we can get this right, the reward is significant for us. As we look at our customer makeup, existing customers that we have relationships with today, our share gain opportunity with that group is 2x that of the opportunity with prospects that we are not connected with. We're connected with the customers, the opportunities, and the customer experience. Customers tell us they need a better experience, and we are uniquely positioned to provide it. Our competitive advantage solves for customer needs because it connects to the most important moments, the five moments that we just touched on. I thought it would be helpful if I brought to you three examples today, all right? Three business examples where this plays out. First, I'd like to take technology, all right? Leveraging technology to drive a better experience around ordering. In Columbus, Ohio, about 18 months ago, we ran across a customer. They did not do any business with us. Large customer, fairly sophisticated, and they were looking for a digital solution to address two opportunities in their process: estimating and purchase orders with their distributors. We brought them our exclusive Hover program. That resonated with the customer. They can take a digital estimate and seamlessly push it through to us. All right? The end of 2021 for that year, that customer awarded us as their exclusive distributor. In our space, that's rare. They also awarded us with $5 million of business that year. To put that in perspective, that makes them in the 99th percentile of customer size. Needless to say, that was a significant win. The second example I wanna share with you is leveraging our OTC network. All right. This gets at the moment, the important moment to the customer around delivery. All right. Right here in Houston, and many of you were at the hub yesterday. Right here in Houston, not long ago, we had a customer who we were working with on a commercial project. Okay. The customer had a scheduling issue. We did not make an error, but the customer had a problem arise in their business. They needed a partner. They called us at 3:00 P.M. in the afternoon and wanted some material hot shotted out. Well, the problem was it wasn't something you could throw in a pickup. It was a full semi load of roofing insulation. In our world, that's a bit of a Hail Mary. All right? Industry norm, not Beacon, but industry norm, here's how that process would play out. The customer would frantically call their outside sales rep. That outside sales rep, assuming they're in a multi-branch company, would make phone calls all around the market to find three assets, right? Inventory, a truck, and a driver. They would try to cobble that puzzle together. Well, in this instance, through Beacon, the customer made one phone call to the rep, and the rep made one phone call to our central dispatch department, all right, that runs all dispatch unit throughout the OTC of Houston. That department's actually located in the hub that you visited yesterday. Many of you saw it on the tour. Well, that dispatch department has complete visibility and control of the assets. First, they located the inventory, and then they made the necessary routing changes in the afternoon deliveries to pull in a driver and a truck, and we had the material out in two hours. The third example I wanna give you, and many of you will appreciate this, up at LaGuardia Airport in New York, we had a large project going on, about $2 million of roof material. Here over the last year or so, there's been some supply constraints in the industry, as many of you know, particularly in low-slope roofing. There was a specialty adhesive required for this roof system, that was of tight supply and not available, not just from us, throughout the industry. We worked with the customer by leveraging our commercial sales center and our engineering department to value engineer that project and set up a new roof design. We swapped out that specialty adhesive with a sprayable product. Product detail doesn't matter. They get the job off on time. That product was actually more expensive than the original item they had planned to use. The way that the design had come together, they more than made up for it in labor savings. Point of the story, customer had a crisis. Our commercial sales center, backed by the engineering department, came in, helped them with some design solutions. Job went off successfully. Customer actually made a little more money, and that redesigned system has now been a part of that customer's last couple of bids with us. Three years ago, these stories were not possible, largely. I've been at Beacon for 14 years, so I've been here through the transition. This transition has been challenging. There's no doubt about it, but it's been powerful in our business. We've seen it play out. What I would submit to you is the change requires a few things, right? It requires deliberate choices, which Julian touched on. It requires building out a new operating model, a new culture, and it's difficult. What all that means is these are barriers for others to follow us. Our scale and our network model allows us to build differentiated capabilities that meet customers' needs. There you have it. We have a brand proposition to deliver to the marketplace, an opportunity to drive that out and grow awareness and consideration, and a service platform based on our scale, our network model, and our capabilities that can deliver and make a difference in the service experience of customers who today don't see distribution differentiated. It's a huge opportunity for us to drive share. Let's take that context and now move into our go-to-market strategy. There are multiple elements to the strategy. We'll take you through each one. Where we're gonna begin is with our core business, commercial roofing. As Julian mentioned, we have two core businesses, but we're gonna spend a little bit of time here on commercial roofing because we believe we have an excellent opportunity to drive additional growth in this business. Why are we so excited about commercial roofing? Three reasons. The first, the economics are compelling. It's a $10 billion market. At Beacon today, we are at $1.8 billion in revenue. There is a lot of space to take for us, a lot of market share available. We like the transactions. They're, in fact, much larger than residential transactions, 25% larger average ticket. When you run the business the right way, because the projects are so large, think about a warehouse being built with all that roofing material required, and imagine the truckload deliveries and the way you can drive inventory turnover when you're hitting the mark in those types of transactions, you can drive a terrific return on invested capital. The second major reason we're so excited about this business is because we are very good at it. In fact, as we say here, where we're good, we're very good. We're a market leader in the business, recognized as such by our manufacturer partners. In our top 20 commercial markets across North America today, we average over $40 million in revenue each year in each market. Our top commercial branches drive double-digit operating income. The other thing about this is, this business, as you can imagine, is concentrated in the largest MSAs. Beacon is strong, fundamentally strong in those markets. We have a wonderful synergy. Finally, this is not an easy business to get into. Jake was giving a reference before to the airport construction scenario. These are complex engineered projects. There's a lot of technical specification involved, and technical expertise includes things like engineering and drafting, and we see those kinds of projects every day. Finally, the projects are long in duration. You know, six, 12 or more months from the time the original bidding begins until the material is being delivered for installation. To participate in a market like that, you need project management capability. Distributors don't get to sell whatever brands they want. The manufacturers in this industry are selective. Together, those factors drive barriers and make it the kind of business we think can be very sticky for Beacon. Sticking with this slide, if you look at the right-hand side, you'll see a list of solutions, and these have been proven out in our mind to be successful, where we excel. We found them to be effective, differentiated, and they position us to overcome the barriers that Jonathan just touched on. I'm gonna highlight two out of that list. The first, commercial sales centers. This addresses the barrier of technical expertise. What we do with our commercial roofing resources, we centralize the talent and the other related resources into one facility by market. All right? So think about all of the sales support, job coordination. As Jonathan mentioned, these are complex projects. There's a lot of coordinating work that goes on. All of that is pulled together in one place. The purpose of that is twofold. It creates a more dependable environment and a much higher quality level of service for the customer. In addition to that, I mentioned a minute ago on that project in LaGuardia, we had a centralized engineering group that backed up that job. Well, that centralized engineering department is also tied in with this commercial sales center, and they participate in two ways. They provide takeoffs to customers, and they also help them value engineer jobs. That LaGuardia project was an example of that. Second example, I'd like to touch on LogicTrack. That addresses the barrier of specialized selling. LogicTrack is proprietary of Beacon, and it's a job tracking technology. What it does, it provides two significant benefits. It actually mines public work leads for both us and therefore our contractors, and it acts as a sales management tool in allowing us to track all the various bid work that we do out in the field. One noteworthy routine, to give you some context on LogicTrack, is that system constantly, actually daily, mines those leads. We pull that together and provide out to our customers on a weekly basis, a list of those jobs with the material lists already pulled together for them. We're actually taking leads to the customer. Deploying these capabilities that you see provides for a unique opportunity for our vendors to grow with us. If we truly can differentiate and drive share, they will want to be a part of that. That puts us in position to secure the lines that are critical to winning the market. Let's dimensionalize this opportunity a little bit more clearly. We see commercial roofing during the Ambition 2025 plan period growing at $200 million above our projected market growth. As Julian set forth, there's already a base level of market growth that we anticipate for residential and commercial roofing. This would represent $200 million above that market growth and is part of the bridge that he set forth in the, in his earlier remarks. Now, how are we going to do that? Well, to put it simply, we're gonna take the proven model that Jake was describing that has led Beacon to its strong position in several major MSAs, and we're going to roll that capability out across North America. How will we do that? We'll be investing. We'll be investing in this business through leadership, both corporately and in the field, through what we're calling targeted investments. As an example, think about more commercial sales centers in markets where they don't reside today. Through technology. Jake mentioned LogicTrack, which is proprietary software of Beacon, but here I'm really referencing digital tools. We have a strong digital business you'll hear more about later this morning, and it's excellent in the residential space, but only emerging in the commercial space. We see so many opportunities to help our commercial roofing contractor customers with digital tools that can enable their business and make our communication and workflow through those six and 12-month projects far more effective and efficient than they are today. Finally, by bringing value, more value than we do today through private brand in the commercial sector. These strategies together, again, to deliver $200 million above our projected market growth for commercial roofing. Okay. To remind you, we're within our go-to-market strategy section. We've just covered commercial roofing, and we're transitioning to a broader opportunity within Beacon. We believe we can grow the effectiveness, efficiency, and scale of our sales team in the field. Before we get into the sales team growth and coverage model, we feel that it's important to, for you to understand what we're building to make this team more professional, sophisticated, and targeted in their activities. There really are four areas that we've been building capabilities that support all of our sellers at Beacon, and I'll take you through them. The first has to do with lead generation, and where I'll call your attention is our national call center capability. We think we're a leader in our industry with this capability because we have the ability with the call center to reach out to both new prospects and lapsed customers to restimulate their interest in Beacon. Once that lead is stimulated through our software system, we can send it to the field, to the correct OSR, outside sales representative, for follow-up and action. That we think is a differentiator for Beacon. Within our sales process, it's important for you to understand we are investing in expert trainers and enablers. We've built a corporate team and a field team to allow our OSR teams to build and improve their productivity and for new hires to shorten the period of time it takes from their hire to their reaching what we would call sales maturity. The faster we can make them productive, the more return we get on our investment. That's a critical area for us. The third area is how they engage with their clients, with our customers. We're building tools that make it simpler for them to sit down with an existing customer and identify opportunities for that customer to buy better, to be more effective, and to expand our share of their business. Ultimately, we want them to be providing information to our customers that make the customer's business better. That's what this is really about, sitting down with our sales representatives as a contractor and leaving with opportunities to grow their business. That's what that's all about. Finally, our analytics capability. I'll make reference to what we call our Money Maps. By market, we have, through our own proprietary research, identified the customers whose wallet share is most available to us for targeting. In other words, in each MSA, which customers represent what share of the market? What is our share of their wallet? Where should we be targeting? That may sound straightforward, but it's not a capability that existed for us until we built these tools. They're a big deal because with these strengths, with these capabilities in place, we feel enabled, empowered, emboldened to invest heavily into our outside sales team. Growing our outside sales team. This particular initiative is a big deal for us. I'm excited to have the opportunity to share it with you. Investing in our outside sales rep team, or what I'll refer to as OSRs, entails a couple of things. We do wanna grow the overall size of it, actually significantly, and we wanna expand the coverage, the reach. We have a three-point plan to do that. First is investment. Process was very simple. We did a bottoms-up plan that came up out of the field across the top 50 MSAs. What we uncovered was share gain opportunities that we can get at with a larger sales force and more effective coverage. In our plan is to add more than 100 reps over the planning period between now and 2025. The second point, leadership alignment. Once again, context is very important here. Current industry practice is as follows: OSRs typically report into a branch, so the branch manager, and then that branch acts alone, right? Generally, they're not networked, and so they go it alone, which obviously limits the opportunity to leverage any sort of resources. Well, as I think it's clear to you at this point, we wanna leverage scale and leverage our network model. We're gonna move the OSRs to report underneath sales leaders who will cover the entire market. Clearly, what that'll allow us to do is to leverage the resources across that network. In addition to this, what will also be unique is that by having sales reps report to sales professionals, we think we can improve the execution. We will be adding more than 25 sales leaders to the business over the planning period. The third element of the plan, prioritize opportunities. This gets at how we attack the market, customer groups, etc. Jonathan mentioned Money Maps a second ago. That's a very good example. By adding this number of reps, we're gonna have the flexibility and bandwidth to be very deliberate in how we go about attacking the market. We will prioritize that effort. Whether it's the Money Maps example or other initiatives around hunting and farming, we're gonna very much rifle that group in specific directions. This initiative is the largest organic growth lever in the plan, adding sales of $500 million, organic sales, by 2025. This discussion of investment in our sales force represents sellers of all focus areas in our business, from those that work in a market and serve smaller customers to sellers that work with regional customers, all the way up to our national account customers. I wanna turn for our last section here and talk about national accounts, the last lever in our go-to-market strategy. The graphic you have in front of you is about a single national account customer, one. You can see as it built there, this customer expanding their business across the United States. They've been successful. I may have picked an example here to illustrate one customer, but I could have picked from dozens. We are seeing the success that this customer experienced with other customers. Why are contractors having this ability to grow? They're better operators, they're better marketers, they have access to technology, to data, and capital. They're looking for a distributor partner that can work with them and meet their needs. We believe at Beacon, we are uniquely positioned to support contractors, builders, and other national account customers that have these type of requirements. How do we do that? Well, it comes back to scale. Because we have this scale and this coverage, we can invest in specialized national account sales representatives whose focus is on the relevant end markets, multifamily construction, government, storm, roof replacement, residential roof replacement. Whatever that vertical sector is, we are hiring the best experts in those verticals to serve those customers. You can only invest like that if you have the scale of coverage that Beacon offers. Second, they like and they need our networked model. These are not small businesses. They don't operate in local neighborhoods only. They're operating across markets, and they expect their business to be prioritized as such. They don't want to call each branch and convince them to show them the support they need. They wanna be recognized, and that's a unique value of our networked model to a customer like this. Finally, our differentiated capabilities. I'll just call out technology. Technology matters a lot to these customers, many of whom have integrations, direct API integrations with Beacon. You'll hear a little bit more about that as we talk about digital a little later. Think about these customers as being at the tip of that spear, and they're looking for a company that speaks their language, and we do. Here is our outlook for national accounts during the Ambition 2025 planning period. We see this business, which finished at 2021 at $695 million in revenue, growing to $1 billion or more by 2025. We know it's doable. We have a plan to do this. How? We'll invest against our national account sales teams, continuing to put more people into the verticals that matter, that are driving the growth. Second will be technology. We will continue to lead and invest in the integration capabilities that these customers require. The third is fulfillment support. I mentioned to you, and you saw it illustrated in the page that just preceded, they move from market to market. Well, that first day they place their first order in Phoenix, where they've never operated before, needs to feel just like yesterday felt in Philadelphia, where they've operated for years. That's the experience we want them to have, and that's what our fulfillment support teams are able to deliver, that centralized support on every order every day, so it goes seamlessly for them. Now, this growth in national account sales, it is a reason to believe it's a support for the OSR sales growth that Jake described, for the commercial sales growth I spoke about earlier, and even for the market growth that we plan to take that was represented in Julian's walk. That $695 million-$1 billion is the way we will get, in part, to some of those goals. It's a reason to believe because it's an illustration of a strength that Beacon has. Okay, we've taken you through customer experience and our go-to-market strategy, and now we're going to turn to the third pillar of our revenue growth plan, and that's footprint expansion. For that, I'd like to invite to the stage Jason Taylor, the President of our West Division, and Frank Lonegro, our Chief Financial Officer. Good morning. Let me add my welcome to everyone else's. We enjoyed having you last night at the Houston Hub. Hopefully, you saw what we do and what we do well. As we embark upon Ambition 2025 and specifically the footprint expansion, we do it from a position of strength. Generation that we've exhibited in the last three years, plus what we're projecting in the future, and the balance sheet strength is really giving us the opportunity to do what we've wanted to do for quite a while, and that is to invest in both greenfields and M&A. The expanding footprint is a major lever in this plan. $200 million in greenfield revenue by 2025 and $1 billion of M&A revenue in 2025. Many of you may say, "Well, you've done this before, haven't you?" I'd ask you to listen intently to how we're gonna do it differently than we have in the past. This is a beautiful picture of the North Port, Florida, facility. It's in Munroe Best's South Division, and it's really illustrative of what we're going to do in the future. We are clearly ramping up our capability to deploy greenfields on a consistent basis. We have an extremely strong pipeline of candidates, 65 that we're looking at, 17 that we're actively progressing, and we would project to open 10, not just in 2022, but through 2025 and beyond. We're gonna follow the customer. The key MSAs, as you've heard Jonathan speak about, that's where we wanna be. We wanna follow the geography and the products that have made Beacon what it is today. We're gonna bolster our market position in those areas and achieve what we know can be leadership economics at a local level and leverage the advantages that you heard Julian introduce and Jonathan reinforce. There is an interplay here with M&A. We may have a situation where we think we're gonna deploy a greenfield in a location, but it turns out we acquire something in that location. That'll put us at a fork in the road to either double down and really expand our presence in that market or to pull back on the greenfield and reprioritize and put a greenfield somewhere else. Our plan of 10 per year, $200 million in 2025 sales, but the pro forma impact of that is significantly higher, $450 million when those greenfields reach maturity. It's important to know that we are gonna consistently deploy greenfields, and we are going to have a dedicated team that we've just stood up in the last few months to help us go from the very beginning assessment phase all the way through opening and continuing to track that and make sure that we're reaching our targets. Accelerating the path to maturity in a greenfield is really important. How do we get it from a starting place to where it grows like the company? The early years of a greenfield obviously grow quickly, and we wanna get to that rate as quickly as possible. Historically, it's taken us a little over five years to do that. We think with the process that we have, this dedicated team that we have, we think we can accelerate that by up to two years and reach that maturity level in three to five years rather than in five or more years. This dedicated team actually brings in the former regional vice presidents of both the Texas and the Great Lakes divisions into the core who are gonna help us with both M&A and greenfields. These are people who know the field. They know M&A. They know greenfields. They've done this before. We've created operational excellence under Brendan Daly to really shepherd this process and make sure that we know how to do it very well. As I mentioned earlier, listen to what's different. This is hugely different than it has been in the past. It doesn't distract the field from their day job as we deploy greenfields and M&A in their territories. We know that in order to do that, we have to do things in advance. We have to hire the branch management in advance. We have to hire the salespeople in advance. We need to engage in marketing in advance. We need to load in inventory so that we're fully operational day one. We need to leverage the capabilities that you just heard Jonathan and Julian speak about. It will take about $1.5 million in both capital and operating expense to get those up and running. In this three to five year accelerated path, we think the payback is on the short end of that, between 2.5 And 3.5 years on a cash basis. We've had some recent successes. My colleague, Jason Taylor, is gonna tell you about the one here in Texas, San Marcos, which has been a huge success for us, and let him regale you with that success. Thanks, Frank, and thank you for being here. I wanna do a few things. I'm gonna set the stage for our San Marcos greenfield. I'll talk about our competitive advantages that we think came into play as we set that up. Then finally, I'll talk about the future and allude to some of the things that Frank mentioned about the team that's gonna help us accelerate greenfields going forward. San Marcos is a really good example of the fact that we have multiple ways to grow in our key markets. If you look at the map on the right-hand side of the slide, you have the Austin market in the top right-hand corner with two branches that operate as an OTC. If you look at the bottom left of the map, you have San Antonio, also a two-branch market that also operates as an OTC. They're about an hour and a half apart, and so they both ship into the San Marcos area, the New Braunfels area. When we looked at that market, that's a very fast-growing county. It's both bedroom communities for both Austin and for San Antonio, very fast-growing. We knew from our outside sales team that if we put a greenfield in that market, we would actually get business. They actually told us that. Really from there, as we validated the demand, we had two markets that are in our top 30 MSAs, both play for number one markets. We wanted to go and put a greenfield there. From there, our scale really took over. Because we have branches all over the country, we actually had a landlord who we have multiple properties with, who really parallel processed the opportunity with us. He was in, as we went through approval processes and validation processes. He actually just took over and started getting the property ready for us, believing that we were gonna take it. That really helped us accelerate getting into the facility. We finalized our decision to go in Q4 of 2020, and we opened the facility in March of 2021. That scale really mattered. That helped us get going quickly. The other thing that was really helpful for us in this, in this project was our OTC networks. I mentioned we have an OTC network in Austin, and we have an OTC network in San Antonio. Those branches are used to sharing resources. They were already shipping into San Marcos. They were actually happy to seed some of those sales into that San Marcos market because they knew that they could then really attack more profitable business with shorter delivery times in their own market. That helped seed that San Marcos branch. Ironically, as we started to open the San Marcos branch, our Austin market got hit with hail. It happens from time to time in Texas. That really helped make the importance of the San Marcos branch evident to us. In a situation in a hail market, you all are familiar, that market would have really had to focus on the demand that's being generated in that market. They would have had to forgo those sales in San Marcos. They would not have been able to ship out of that market to go put a truck down there for an hour, turn it around, load it, have it come back deadhead. They just would not have done it. We would have foregone the sales in that market. Adding that greenfield really helped us capture some market there. Then the final thing I would say is to pull back to some of the things that you heard yesterday, this is actually the San Marcos Greenfield is actually the business case for our diversity, equity, and inclusion program and what we believe in. Julian talks about the business case all the time. Diverse teams get better results because they ask different questions and they get better answers. Some of you who were on the tour yesterday, you met Chelsea Oesch, who runs our Private Label business. Before she took that role to run that business for the company, she was a branch manager in Austin. As a branch manager in Austin, she hired a woman named Taylor Holm, who was a management trainee, and Taylor developed under Chelsea's leadership. When the opportunity came to run San Marcos, Taylor took the opportunity and became the branch manager in San Marcos. We had a young, up-and-coming woman running that branch. We paired her with a 30-year veteran in the market, Tom Mott, who is our outside sales rep in that market, who's lived in that market and worked for us for a number of years. That is the duo that's really led to the results that you see. The results have been phenomenal. $10 million in sales in less than a year. Double digit EBITDA in less than a year. We've seen that really perpetuate. We've had even higher growth rates in the whole market combined. That is the business case for DE&I. The last thing I'd say is we had great success in San Marcos. Matter of fact, one other fact, those that were on the tour yesterday, that crane that you saw in the Houston branch, it is actually going to San Marcos. We're very bullish on that market. We actually did not do that on purpose, but that crane is going to San Marcos, so we think there's even more growth potential there. They're gonna have to pry it out of the hands of the folks in Houston, but it will get there. The last thing I'd say is, we think there's upside with the organization that Frank alluded to do this over and over again, to really accelerate our results as we roll out greenfields. The RVP who's come out of the field to go into the corporate office has extensive experience in launching greenfields, and that will help our team in the field focus on developing talent to the point that Frank made about hiring talent in advance, making sure that we hit the ground running and these greenfields take off. With that, I'll pass it back to you, Frank. Tell them how well you did in year one. Yeah, I think I alluded to it. $10 million in sales in less than a year and double-digit EBITDA in the first year. We try to get there in years three, five in the accelerated path, but obviously Jason's knocked the ball out of the park here, so it's fun. We'll do a lot more in Texas, apparently. Let's talk about M&A. We have a significant opportunity to drive M&A. We're going to be acquisitive. We've been on the sidelines effectively since 2018. The Ambition plan includes $1 billion of sales attributed to M&A. Over $100 million of Adjusted EBITDA in 2025. Our ideal target would be an independent distributor, rough order of magnitude of size between $50 million-$250 million of sales with a good geographic footprint for us, something that is additive to us, and also a product footprint that is very similar to what we have today. In a $54 billion market that Julian described in residential and commercial roofing and complementary products that we carry, it is still fragmented. There's huge opportunity for us to be the acquiring party of choice in that fragmented market. We are quite active in terms of a pipeline. We're speaking to about 20 different companies right now. Now, some of those are just get to know you, and others are ready to transact this year. This dedicated team is a really important addition to Beacon that takes us from the cultivation element of M&A through the acquisition and all the due diligence that comes before, plus the integration, which comes after. That over $100 million of EBITDA is one of the key elements of the Ambition 2025 plan and our growth to $1 billion of EBITDA in 2025. We are gonna be very disciplined in the way that we go to market, both in terms of what we buy and how much we pay. That discipline is gonna serve us well. We also are going to have a clear path to how we're going to create value from these acquisitions. It's important to us that the synergized multiple of the acquisitions is below the Beacon trading multiple. We know that's how we create value. When you look at the capabilities that Julian mentioned, the advantages, the Beacon advantage, the Beacon competitive advantages, scale, the network model, and then the specialized capabilities, all these are going to drive either better revenue, better gross margin, lower OpEx, and certainly better EBITDA. You can tie these in your own mind to the P&L and see how they map to value creation. Again, I'll turn it to my partner, Jason, to tell you about a recent success on the West Division, the Midway acquisition. Thanks, Frank. Again, I'll set the stage and then talk about competitive advantages and then what we see in the future. What you're looking at on the right-hand side here is a map of Kansas, Missouri, and Nebraska. You can see our footprint with the Beacon logos, and you can see the new density that we've created with the additional Midway logos in that market. As Frank alluded to, it's a 10-branch acquisition, about $130 million in sales, and it really adds strength to our business in the Midwest in those three states. That was something we were looking for and thinking about ways that how do we grow our share in that market. If you think about the Midwest market, overall, there are less top 50 MSAs, but there's still a lot of shingles and a lot of roofing that go on in that market. How do we think about how we grow share? An acquisition in this particular case made sense. It also gave us a real foothold in Kansas City. We have five branches in Kansas City, and we're adding 1 branch from Midway. Our five branches work in an OTC model. I'll touch on that in a bit. The branch in Kansas City from Midway is a very large branch that we feel can be a really strong piece to that OTC network. Now the combined strength of the two companies give us a real shot to play for number one in that market. That market is the 31st largest MSA in the country, and it's one of our play for number one markets. That really gives us a foothold there and a place to go play for number one. As we think about how we came to be with Midway, you know, we have a history of acquisitions. A lot of folks have talked about that. We had some connection with Midway from prior talks. When we reached out, as we started to refresh our acquisition pipeline, it was the right time and the right acquisition for us. As I think about competitive advantages that we have, we certainly learn from acquisitions when we bring them into the fold, but we bring a lot to the table for acquisitions as we've developed our capabilities. First of all, as I think about scale, if you think about scale, last year with the supply chain challenges that everyone faced, Midway, based on being a smaller regional distributor, less product lines, they really had to pivot their business, frankly, to other complementary products. They were very nimble, and they did a great job of pivoting their business to windows and siding, where they could get their hands on product. We think that while we appreciate the fact that they were able to pivot their business, we would actually be able to add some strength in their purchasing power on the roofing side of the business. We helped them get more shingles so that they could grow even faster. Our scale will help them from a purchasing power standpoint. From an OTC network standpoint, I mentioned it in Kansas City, we now are gonna play for number one because we have them as a part of our network. They're actually used to being a hub and spoke model. They have significant strength and leadership position in Topeka, Kansas, which is where their headquarters are. They do a hub and spoke to some of the more outlying icons that you see on the map to some of their more rural areas. It's a perfect fit for our OTC network to add strength and add to our ability to play for number one there. Then finally, from a capability standpoint, as we've developed our capabilities over the years, we really bring to bear some strength as it relates to private label. That's something that, as good a competitor as Midway was, that they would not be able to pursue. So we can immediately add private label to their offering, which adds margin to their business and enhances their margins. And it really fits with how they're incentivized, how they've historically been incentivized at a branch manager level, at a district manager level. So it really fits well with what, how they've gone to market in the past. Then finally, another capability that, again, a smaller company would not be able to pursue would be digital. As we've started to integrate Midway, they've asked us so many times about how they can start to use digital with their customers, because their customers have been asking for it. That was not something that they were gonna pursue, and now they're gonna have access to it. It's a much better service offering for the customers of the acquired company that we've now targeted and taken in. In terms of what the future looks like, we have, as Frank alluded to, we've set up a functional organization, again, led by an RVP in the field, to really help us with mergers and acquisitions, targeting and integration. We're actually already starting to see the fruits of that. As we've started to integrate Midway, I was actually meeting with a manufacturer last week, one of our large manufacturers who actually we share with Midway. We turned to the Midwest and we started talking about the business there, and then the conversation turned to Midway, and one of the guys turned and looked at me. He said, "You know, they were scared when they first got bought. They didn't know what to expect. He said, "They have been amazed by how easy it has been and how you've made them feel comfortable and welcome into the business." I would tell you, I think that's a part of the functional organization that we've set up, because we really have focused on making sure that the questions that we need to get answered for them, that it's very streamlined fashion, that we take into consideration the things that they do that are special that we need to figure out how to accommodate, and that we prioritize the things that we may need to, update and change in their business, by partnering with them and keeping them in mind as we do it. With that, we've seen really great potential with the Midway acquisition and we're looking forward to the full integration with that company. We'll turn the program back over to Jonathan, and he'll continue along the path of revenue growth and margin enhancement. Okay, we've made our way around three of the four quadrants that we're focused on revenue growth, and now we're gonna turn our attention to margin enhancing initiatives. There really are three that we're gonna walk through. We're gonna begin with pricing. Pricing has been a critical strategic lever in our business during the pandemic, and in particular, a driver of our results over the last 18 months. You might say, and I think Julian referred to earlier, we may have been a laggard in years past, and we feel that we've moved into a leadership role here. There are some strengths. Clearly, some strengths that we are leveraging. First is that we are highly competitive on commodities. Our local teams are super aware of their market. They know the trends, they know the competitors, they know their costs. They know how to price to win and retain business. That's a strength, and we maintain in our system localized flexibility to get the deal done, to move price up appropriately as the inflation cycle results in cost increases to Beacon. That's been, I think, a powerful combination over the last several quarters. In addition to that, our pricing is unified inside of our ERP. Whether you call an OSR on the phone, you visit a branch, or you go into a digital property, you're gonna see the same price. That's important, fundamentally important to omni-channel commerce, which we'll talk more about in a moment. We also have some great opportunities to take this momentum and accelerate. First of all, we are a scale player. We have thousands of transactions every day of like customers and like products, like markets, like transactions. We should be mining that data more effectively to deliver price recommendations to our sellers that are more in line with market and giving that feedback faster to our sellers. That's all about a better customer segmentation. We talked about the extreme versions of local, small, independent one truck operator to a national account, and we have lots of iterations in between. Pricing ought to be tailored to the segment, to the commodity, to the bundle that the customer is buying, and we have the ability to do a better job systematically there. There's trend in our business. We're in an inflationary cycle. It's not created equal in every market. Markets vary. The competition, the available supply, the cost. The system should be faster in reaction in its recommendation to trend. That can be hugely beneficial to driving effective pricing and margin. The mid and long tail. I talked about the key commodities where we're strong. Well, if it's a mid tail to long tail item, by definition, people don't price that item or sell it very often in our branch. They're not as familiar with the competition on that item. They need more help. The system has to work harder to deliver a more relevant recommendation that they can trust. Look, all of this, all of this rolls into user experience. The branches have to have confidence. As Julian says, we don't just get to increase prices. It's an initiative that we take very seriously because it's customer by customer by customer. To be effective at it as a seller in a branch, the system needs to be fast, reliable, and credible. That's what we're gonna build. That's what we've been working on for the last year. In 2022, we will implement a new system for pricing with new technology that will start delivering benefits in 2023 and beyond. For Ambition 2025, we see this system delivering 50 basis points of margin, gross margin expansion. Now, I can tell you from my experience, having implemented pricing systems before in my career, this is achievable. There's probably upside. We're gonna be focused first on user acceptance and branch adoption. If we can achieve that, and we will, the margin will follow. The second major pillar of margin expansion in our plan has everything to do with omni-channel commerce. Joining me on the stage right now is Jamie Samide. Jamie, our Vice President of Advertising, Marketing, and Digital. He's gonna talk to us about the advantages that we have today, and we will have even more of tomorrow in our omni-channel business. Thanks. Yeah. Thanks, Jonathan. Very excited to talk to you about today where we've been with our digital journey, but more importantly, where we're going. When you think about our time, we spend a lot of time with our contractors, really trying to understand what's gonna create a really positive customer experience. At the center of it, what you see here, is where we believe we have an advantage of our omni-channel experience. On the left-hand side, you can see our customers can choose to come into a branch, call an OSR, order online from a desktop or an app. On the right-hand side, they also have same discretion about how they want to have their materials delivered to them. Some may like to go to a branch to pick it up, some may wanna have it delivered. It's up to them. Really, at the end of the day, while we're sharing this, we don't care. We wanna make sure that regardless of how that customer chooses to interact with us, that they're having a seamless and simple and positive experience. No different than you might think about your own food shopping. Sometimes you're in a car to go to the grocery store or Target. Sometimes you may be at home and order something on Amazon, or you may even still pick up the phone and order a pizza on the way home. Our contractors is no different. Depending on what day of the week it is or what circumstance they're in, they wanna be able to have that flexibility. The key differentiator for us is why we're able to deliver this, is because our digital platforms and tools is fully embedded into this omni-channel experience. All the information is linked no matter which channel they choose to go to. How this comes to life, some of our competitive advantages, we think about ordering at any time of the day, any day of the week. Direct customer integrations that we'll talk about a little bit more. We provide critical updates in terms of delivery, which is really important, especially in a tight labor market, because if crews show up and nothing's there, it doesn't really help out the efficiency of our contractors. Again, having these digital tools rooted into our fundamental systems is really what creates our unique omni-channel experience. As we dig in a little bit deeper, we think about benchmarking our local and national competitors and really trying to understand what are those key drivers of that digital experience. This is truly where we believe we're the industry leader. We know our competition has some of these digital elements, but as a whole, Beacon has the most robust and connected experience in the industry. The differentiating advantage here is our complete catalog is online for them to view and evaluate what they need to purchase. As you learn about OTC, a specific customer may be linked directly to a branch, but within that branch, for Houston as an example, they now get the purview of seeing all the inventory available for that entire network. In a sense, that OTC example, it gives them confidence that they don't care which truck is delivering the material or what branch it's coming from. They just know they have confidence to place their order, and it's gonna be there when they need it and where they need it. Now this may seem like a very obvious capability in 2022, but we truly are the only company in the space doing this today. We've had a five year advantage of doing this, and we're gonna continue to invest heavily in our tools, in our talent, and in our technology. It's our ongoing pursuit to having a world-class customer experience. We also spend a lot of time with our contractors doing deep market research, and we find things, although we've talked a lot about purchasing materials online, we like to understand where else we can help them to make their days simpler, and we know saving time is critical. We've looked at the holistic life cycle of the contractor and tried to find specific touch points where we can embed some digital tools and technologies to help them along the way. This comes into things like order history, storm tracking, promotion tracking, that we really hope that our PRO+ system becomes a critical tool that they need to have in their toolbox. We're really proud that in 2022, we're gonna cross that $1 billion threshold in digital sales, but that's not really where we're stopping. Our research also indicates there's really a high affinity in customer loyalty in the B2 B space, if you have a good digital platform. With over 40,000 customers already engaged on our PRO+ platform, we really do believe we have an opportunity to further our lead. Jamie, that really is a great summary of the benefits digital provides to our customers. It also provides great value back to Beacon. You heard earlier Julian reference that digital is a margin driver for Beacon, and we just wanted to illustrate that for you a little bit more. Why does it matter so much in our business? Well, customers who purchase online at Beacon deliver for us a 150 basis point margin, gross margin advantage over those who purchase offline. Why is that? Well, to put it simply, they buy a much better mix of goods when they're shopping with us online. It's simpler, it's convenient, and most important, they don't forget things that they need. Ultimately, they're buying the complete job, which includes accessories and private brand products. They drive a larger basket as a result, and the mix of that basket is more profitable for Beacon. It's really a great result for them also because they're getting everything that they need. Why does that happen online? Most customers who purchase from us are purchasing off of templates. Templates that are set up and configured for them for the most important items in the most important projects that they do all the time. Think of it like a shopping list. You have your list at the market, and you won't forget things. We have that list for them, they check the box, and they leave with everything that they need. The last point here to draw your attention to is how sticky this experience can be for the relationship between the customer and Beacon. We see over 1,000 basis point improvement in customer retention among our digital, our omni-channel customers versus the offline-only customers. 1,000 basis points. Why? I think what it demonstrates is that our most engaged customers are engaging with Beacon across our entire platform. Those that do so have built their business model around the capabilities we provide. That just leads to a solid relationship that continues to flourish time after time. Now you see a takeaway here about the ultimate financial benefit that digital provided for Beacon in 2021 alone. What that number, $13 million, represents is the incremental Adjusted EBITDA from the growth in digital in just one year. One year of digital expansion, we made $13 million more of Adjusted EBITDA as a result. As a result of the plans Jamie is about to provide, we see huge upside here. Yeah. Thank you, Jonathan. We wanted to share the growth rate of where Beacon is on the digital journey. What you see here is a representation of the percent of share that's driven through digital channels over our total sales in aggregate. For instance, in 2021, 13.5% of all Beacon sales was driven through digital channels. You also notice you have a blue bar and a yellow section. The blue represents PRO+, and the yellow represents integrations. Like many B2B businesses, we have small customers, medium, and large customers. The small, medium customers really have an affinity for PRO+. It reduces headaches for them. It makes their life simpler. At the end of the day, it's free. They don't pay anything for it, and a lot of our smaller contractors just don't have the financial resources to invest in their own technology. When we think about the integrations, we start looking at the larger regional players, national accounts, as Jonathan has referenced. We look at those having two facets. They have a direct link to integrate directly into that contractor, or they're using existing platforms, things like digital estimating, Hover, EagleView, or customer relationship management tools like AccuLynx and JobNimbus. We take our time and resources, take our APIs and connect into the back end of their systems. Those customers, whether they're in their own systems or one of these other platforms, still has access to understand what products Beacon has to offer and can hit a button with confidence to place that order. In a sense, we're really extending the omni-channel experience beyond the Beacon borders. We see our customers are really seeing value. That's why they're growing with us. As we look to Ambition 2025, we're gonna get at least 25% of our share through the digital channels. What's gonna help us get there is the next big thing is an upgraded mobile app. Our current mobile app, even though we've seen success with it, is really predicated on the desktop platform. We're working today to build a new true mobile-first experience. We obviously don't have any benchmarks in our industry, so we're looking beyond that to the best of B2B as well as the best of B2C to create that really positive customer experience for our contractors. As Jonathan mentioned as well on the last slide, when we get to the 25% goal in Ambition 2025, that gets us a projected $30 million of incremental Adjusted EBITDA. Again, I'm gonna pause there. That's $30 million incremental that if people were still buying at the store or calling their sales rep, we would not have. We're really excited to continue to push that journey. Also, it's not necessarily where we're stopping. Jonathan, Julian, Frank have given my team and myself the direction, the tools, and the resources to think bigger. Everything today that we're putting in place is really laying the foundation to hopefully get to 50% or beyond. We don't just wanna stop at Ambition 2025, we're thinking much broader beyond that. Let's dig in a little bit deeper of the importance of mobile. Again, it may seem obvious, but most of our contractors don't sit at a desk all day. They're in their truck, they're at a job site, they're checking on crews, they're at a homeowner's site, they're having breakfast or lunch with a supplier. They're living their daily lives and trying to run a business on the side. Heck, we have seen orders come in on 10:00 A.M. Saturday, they may be at their child's soccer game. We've seen pretty large orders come in at 10:00 o'clock on Christmas Eve. They are engaged with this, thinking about their business at all times, and we wanna make the simplest tool for them to use. They have that on-the-go ability, whether it be purchasing things or checking on delivery status, order history, or they may just need a key product detail in the field at that specific moment. I wanna share a video with you that brings to life this transformation. It provides more of an impact of what this is gonna mean to our contractors. In summary, we're really striving to get our customers to become ingrained with our PRO+ system, almost create this level of stickiness, and we want this app to be part of their customer experience. That it's so critical that they're pulling out their phone multiple times a day and engaging and interacting with Beacon, and we truly believe that that consistency will drive our brand affinity, which will lead to more of their wallet share. Super exciting. Jamie, thanks for the summary of all the great initiatives. I am thrilled about the mobile application we have coming this year. It really will be a game changer, driving us towards that Ambition 2025 goal. We've taken you through our pricing initiative and our digital initiatives. The third leg in the stool of our margin-enhancing initiatives is our private brand, TRI-BUILT. Beacon has truly built a marvelous brand in TRI-BUILT. It is extensive, and with its thousands of SKUs, covers literally all of our lines of business. We proudly have in our lineup TRI-BUILT offerings in residential roofing, commercial roofing, and within our complementary categories. The innovations keep coming. The strategy with TRI-BUILT is to source high-quality merchandise. This is not a cheap product alternative. This is professional-grade product from the leading manufacturer of that commodity, labeled and packaged consistently across our entire offering. The customer has confidence because the product performs like its alternative national brand item, and the customer has a brand they can count on every time and every location they visit at Beacon. It also has an inventory benefit for us. What does that mean? Well, in this period of supply chain disruption. The TRI-BUILT program has made us ever more important to our manufacturers. We are on their list. They know our specification, they know the quantity, and they know the ship date. It's a special run they've committed to, and that's why our TRI-BUILT product is in stock and ready to serve, even as, at times, some of our national brand manufacturer products may be running short. That is the kind of partnership and relationship that TRI-BUILT has helped us establish with our manufacturing partners, and it's a big deal. As we look forward through the Ambition 2025 planning cycle, TRI-BUILT will be a $1 billion brand through 2025 and beyond. We won't stop. How will we do that? Well, we'll continue to feature and offer it through our branches, through our digital properties. We'll have great material availability. We'll continue to innovate in packaging and advertising, and we'll extend the line. I mentioned earlier today how many opportunities we see in the commercial roofing space. Depending on the category or subcategory within TRI-BUILT, we can see anywhere from a 500 basis point gross margin advantage anywhere to a 2,000 basis point advantage. It's hugely impactful to offer a customer a TRI-BUILT alternative, and they are adopting it, as you can see by the remarkable growth path we've been on over the last few years. Achieving this $1 billion goal will deliver over $100 million, $100 million of incremental Adjusted EBITDA in 2025. Just put that in context. Our Adjusted EBITDA goal is $1 billion, and here we're talking about a $100 million. It's a strategic driver for our company. We're committed to it, and we're good at it. That completes a walk around four quadrants driving the $9 billion revenue ambition, 2025 goal, as well as the 100 basis point margin ambition of the 2025 plan. We're just super excited to have taken you through all of these, but we also know that none of this happens without the operational excellence we depend upon in our branches each and every day. We have a plan to enhance and improve our operating excellence. For that part of this morning's presentation, I call to the stage Munroe Best, President of the South Division, to take you through the strategy. Thank you. You got it. It's okay. Thanks. Good morning, and, thank you, Jonathan. As he said, my name is Munroe Best. I'm the President of the South Division, and I wanna tell you, it was great seeing many of you last night at The Hub. What a fantastic facility that is. It was really great seeing some familiar faces. Quite honestly, some of you have really been following us a long time, and we really appreciate that interest. Couple of things I'm gonna go through today is show you exactly three major initiatives that we've got going that are driving faster organic growth and EBITDA expansion. Those three initiatives that are driving shareholder value are branch optimization, the OTC networking that you've heard much about, and also some continuous improvement initiatives. The one I'm gonna speak about today is about the underperforming branches, which many of you have been asking about over the last two years. First, let me take you through a couple of building blocks, many that you've heard about already today that are driving these key initiatives. First of all, talent. We all know talent is the most critical element to our success. We've got highly experienced teams in the field, and this is a local business. It is critical for us to continue to put the best talent in the market where our contractors live and work. That is absolutely critical. Secondly, you've heard about two organizations today that we've stood up in the last several months. One that's leading our greenfield initiatives and one that's leading continuous improvement and integration of mergers and acquisitions. I wanna tell you a little bit about where those two teams came from. When we started our Ambition 2025 planning, our regional vice presidents clearly said to us, "We need some help from the center." And what they said was, "To get these greenfields faster, we need a team solely focused on driving that. In addition to that, we need help with continuous improvement, and as we make acquisitions, we need to be able to have a team deployed to get that acquisition online with us and integrated at the right speed." Two of those individuals who are currently leading those teams now were on that regional vice president group. That shows a tremendous commitment from us to take two very successful regional vice presidents, one that was really leading Texas, our largest region, to run those two initiatives. That should just demonstrate the absolute importance that we are placing on standing up the organizations to lead that. In addition to that, you've heard a lot about investments today solely around digital. Last night at the hub, you saw all types of things that are helping us deliver product more efficiently and of course, route trucks more efficiently. Also, I mean, what about that facility? That was quite amazing. That's the type of investments we're making to make our operations run smoother. In addition to that, we're adapting new fleet. A great example of this is the boom truck that you saw last night that we're currently buying and putting in many markets. Right now, what we're doing is we're transferring a lot of our fleet from the conveyor-based trucks to an articulating knuckle boom. Let me tell you why that's important. Today, drivers are in high demand, critically high demand, and we know anything we can do to make that driver's job easier will help us win in every market. With a conveyor truck, a driver is required to essentially handle every piece of material, every bundle of shingles. With the piece of equipment you saw last night that we're deploying to many markets today, that gives the driver the opportunity to use that piece of equipment to unload the material. Happier drivers are huge and helps us with retention and recruitment, and that will help us win. The third thing, the third building block I wanna speak to is process. We're seeing a lot of efficiency gains by deploying our best processes across the country. One of those specifically is our quintile process that we're currently using to attack what we formerly called underperforming branches and now refer to as the bottom quintile. All of these things are driving shareholder value as it relates to these three key initiatives that I mentioned just a moment ago. Let's talk first about branch optimization. What you saw last night at the branch tour is exactly the way we wanna operate. We are organized in a way where we're reducing pick times for every single order that goes out. We're also using value stream mapping to help with flow in a warehouse. Let me tell you why that's important to us. We have been heavily focused the last two years on revenue per hour worked. What we found early on is that we can make significant improvements. Actually, over the last two years with the inflation that we've seen, we've actually changed the scale, so we are including that inflation in our measurements, and we are still seeing productivity gains. Sales per hour worked is critically important when labor is your number one cost. In addition to that, with the value stream mapping process, we are able to turn trucks faster throughout the day. We're turning these branches into NASCAR or Formula One pit stops, train stations where the trains run on time every day, all day long. With this constrained capacity of drivers in this country and fleet being our number two operating cost, turning those trucks faster every day is critically important to our overall success. For those of you who have been following us for a long time, you've heard a lot about the OTC network, and you've seen it develop over the last five years as we've gotten better and better at it every year. Currently, we've got 60 markets where our branches are networked with over 280 branches all working together. In addition to that, we've got combined P&Ls in these markets where you'll have multiple branch managers in that market all trying to achieve the same goal. That's critically important. Anytime you have five or six branch managers in a market working together to achieve the same goal, there is no way we can be beat. But don't take it from me. Let's hear from some of our customers and our employees. OTC means on time and complete. A group of branches and employees working together to take care of more customers. OTC, on time complete, means I get to take seven branches in the Pittsburgh metro market. One branch might be a small little branch with two trucks and $400,000 worth of inventory, joined up with a branch that has 30 trucks and $4 million of inventory. Now I have, you know, 40-50 trucks, 30-40 drivers, and $14 million worth of inventory. If I can't service customers with that type of backing, you know, get rid of me tomorrow then. In a large market such as Atlanta, where you have significant traffic and significant congestion, an OTC allows us to send our trucks from the appropriate branches. We have the capability to get the material to the customer when they want it, which is important in this business, obviously. It also allows us to have the capability to offer them pieces of inventory and products that we previously could not offer them. Response time is within minutes. It's been consistent. There hasn't been many hiccups, if at all, if any. It makes it a little bit easier to manage everything. That's the best gift we could ask for. Before the OTC, it truly was each branch had their set of customers, and each branch took care of their specific OSRs. Now they all work together, and communication is key to making that happen. Now a customer can be taken care of by any of the branches in the market, not just their one branch. I think OTC will allow Beacon to grow the share with existing customers. It'll allow us to differentiate ourselves from our competitors through the service levels and through what we can do capability-wise in a market that has an OTC, allow us to offer products that we previously could not offer to a customer with one individual branch. The On-Time and Complete program allows me to focus more on my clients than it does causing me worry, too, about the materials that will be delivered to my job sites. Don't be afraid to change. People who see this will know that, you know, I've been in this business a lot of years. I'm known as an old curmudgeon, but even I have learned you have to change and keep moving forward. You want something good. Change and move forward. It's great to have that validated by our customers, and we hear that kind of feedback daily. As I mentioned earlier, I truly believe that the OTC model is a differentiator. The market-driven P&Ls are creating the behavior we want by sharing labor, our fleets, and our inventories. That's critically important. It's also creating career opportunities for individuals within our organization. We don't believe the smaller independents have the capacity to launch this type of service platform. as Julian said earlier, we don't see our competitors making the choice that we have to attack the market in this way. What we are really seeing is the combination of scale and flexibility is a competitive advantage. with that said, we truly believe the OTC network and branch optimization is gonna lead us to a faster growth model to hit our $9 billion target in sales. We know that it's gonna allow us to reduce working capital by $50 million-$100 million or a half a turn, and also reduce operating expenses in these branches by over $50 million. I told you all that to really tell you this. Branch optimization and the OTC model is really changing the game, and it's really been accelerated during times of constrained supply. In addition to that, we've got sales teams selling out of every location and getting more deliveries out. Customers are really telling us that they're feeling the difference. It's really a good difference. I've got countless examples of customers telling me how we pulled off miracles. The one that Jake mentioned earlier about Murtex to me from Florida, explaining to me how he was in a pinch, had committed to a homeowner that he would have materials landing on a job site, but could not find the materials in that market. Our leadership in that OTC market, which typically works extremely well together to get this customer service, actually reached to another OTC, an adjacent OTC, to find that material and get that material on the job site on time. The exact comment from the customer was, "When two good companies come together for one goal, great things happen. Thanks for making me look good." That's pretty powerful. In markets like Atlanta, Houston, Chicago, and dozens of others, by banding our teams together, we know we cannot be beat, and that's where we're headed. We've now covered branch optimization and OTC. Continuous improvement is also paying dividends, specifically around our approach to underperforming branches. We've talked about this for a couple of years now, and we've pivoted our approach to more of a quintile methodology. The changes that we've encompassed over the last couple of years is we've moved from multiple approaches to a single company-wide approach. In addition to that, we used to have varied measurements, and today we've got standard KPIs and dashboards. Those dashboards are live and updated down to the branch manager level every day. That's powerful when they know where they stand. In addition to that, we had static benchmarks. The former benchmark was typically a branch that was operating at less than 3% operating income. That's what we used. Today, with the quintile methodology, that's moving, and shortly you'll see it's moving up. Before I go to that, let me just outline the four-step process that we've used to really improve these branches. The structure has been simple and repeatable. First of all, we diagnose the issue. This is really sometimes a missed step by leaders. Diagnosing the issue is not hard, but you've got to get at the root of the problem. We categorize the problem in one of four areas. It's either a sales problem in a branch, a gross margin problem in a branch, an operating expense problem, and sometimes you do have a leadership problem. What we found is typically one or two of these problems, but rarely is it three or four. Once we diagnose the problem, we can put specific action plans against the issues we see. In addition to that, a key for us is developing solid rhythms. The backbone of that solid rhythm is monthly financial calls with that team. I'm telling you, this is an all-hands-on-deck approach. This is the branch manager, the district manager, the regional vice president, sales leaders, and other functional support teams that are there to help fix this branch. Next, we talk about consistent communication. We've got to get all the stakeholders at the branch involved, pulling that wagon in the same direction. Then lastly, we demand that the branch managers are resourceful and enlist help. An example of this would be a branch that has a potential gross margin problem. We require them to reach out to supply chain or the pricing teams to help fix that gross margin problem. This process is simple, straightforward, and it's absolutely working for us. These are two examples of branches which I could have put up dozens. The first branch you see is a Florida-based branch with sales right at $22 million. Any branch with $20 million should really be able to make good money the way we operate. They clearly had some gross margin opportunities and also some operating expense opportunities. In this particular branch, they enlisted the pricing team to help. They also put specific actions in place to drive TRI-BUILT, our private brand. You can see the results in both the gross margin and OpEx have improved. Those actions they took were around the gross margin. They also attacked OpEx. They recognized that our two biggest costs are labor and fleet. With the labor piece, they were able to reduce their overtime by 36%, and they also reduced their fleet costs by 22%. That's meaningful in a branch like this, and you can see the results right here. As you think about the Virginia branch, they had a lot of the same plays that they ran. They enlisted help from the pricing team. TRI-BUILT adoption is now right at 50% in this particular market, which is really adding a lot of gross margin to this branch's bottom line. You can see that this is really working for us. I will tell you, two years ago, as Julian mentioned earlier, we told you we thought that there was $30 million-$60 million worth of opportunity in these branches. Today, we're really pleased to tell you that we have delivered $75 million against that commitment. We've increased sales, we've expanded gross margins, and we've been extra diligent to get our operating expenses in line in these locations. This work has really paid off. In addition to that, and maybe more importantly, many of you have asked along the way, "Is there still gas in the tank?" Clearly, there is. We think that there is an additional $75 million for the opportunity as we continue with our quintile process and improve these locations. Lastly, before I invite the other speakers up, I want to just leave you with this. We firmly believe that scale, flexibility, and the execution we're demonstrating is unlocking value for this company. Thank you. I think we're going to Q&A now. If the other presenters would like to come up. Move in these ends. In the branches and this, yeah. Yeah. I'll come on in. Come in, scoot in a little. Okay. The way this is gonna work, I think we have a couple of microphones floating out in the room here. Our request would be, if you have a question, raise your hand. We will bring you the microphone. The other request would be, don't start asking your question until you have the microphone. Everybody here and also who is listening in online can hear that answer, and we'll try to get to as many as we can. All right. Thank you. My question was on TRI-BUILT. On the slide you showed, a $100 million EBITDA contribution. I just wanna make sure, you know, you're projecting about $300 million gain, so a third of it comes from TRI-BUILT. Am I using the same right numbers there? What the $100 million is the difference in TRI-BUILT versus a branded product all in. That entire worth of that revenue in 2025, that's gonna contribute on an incremental basis, $100 million. It's $100 of the $1 billion, it's not $100 of the incremental from where we are today. Oh, okay. What would be the incremental from the $700 million or so you projected for the end of 2022? 40-ish neighborhood. 40? Okay. 'Cause TRI-BUILT's about $600 million today, and if you use about 1,000 basis points, you're gonna get to, you know, about 60 or so. Okay. All right. That was my question. Thank you. Yeah, sure. Hey, guys. This is Phil Ng from Jefferies. Quick question. On the 3% above market growth, certainly very impressive game plan. What's the larger opportunity set in terms of gaining share? Is it from the smaller independent guys versus the bigger players? Just kinda help us contextualize that. From a growth standpoint, hitting that 3% target, how do you see that ramping up? You know, certainly we're seeing a lot of shortages, whether it's material and labor. Just help us contextualize how that process ramps up in the next few years. Thanks a lot. Maybe I'll start with the competitive question you asked, and then pass it to Frank on the ramp. First of all, we believe that what differentiates us competitively is our scale, our network model, and our differentiated capabilities. When you think about those as competitive levers, they're most effective against smaller regional distributors. It doesn't mean that we don't benchmark ourselves against all industry players, but we see opportunities especially strong and against our smaller competitors, and I think that's probably where we're primarily focused. Frank, did you wanna comment on the ramp? Sure. On the ramp, Jake mentioned the OSR additions. We're in the process of sort of ramping up the talent machine, so to speak, that Sean talked about yesterday, so we're beginning to onboard OSRs as we go. We are going to be hiring throughout the planning cycle. I would say it's a little bit front-loaded. It's not entirely front-loaded, but there is a little bit of front-loading there. It's important for us to get folks on board early in the process, because if we miss some of the early targets on hiring, it's harder to catch up as we go. On the greenfields, I think the cadence that we've laid out there of kind of the 10 per year is gonna be important for us. You know, we're again heavily in the development phase there. We think we've got good line of sight to 10 per year. Hopefully more. Like, this is a machine we wanna build and continue to be able to replicate that. When you think about commercial, you know, Jonathan's got a team that he's standing up on the commercial side of the business there. That's gonna be an important team for us to really ramp up the capabilities and go to market differently than we have been in the past. We're already started in many of these things, but the momentum will pick up as we continue to add OSRs and add greenfields, and certainly add the capabilities that we've mentioned today. Questions? Sam Darkatsh, Raymond James. Again, thank you, each of you for all your efforts today. It's much appreciated. Why are your large competitors disincentivized to use centralized dispatch? Why aren't you concerned that they will even more so compete on price if they don't have a delivery advantage, especially once supply constraints ease in this industry? Jake, you wanna start with maybe how we think about it versus competitors? Yeah. I'll do that, and then I'll pass it back to you. As I mentioned in my discussion, the change is difficult. I think the question is more about whether or not our competition would be willing to make the choice and go there. Ultimately, if they have the scale, they can make the choice, but it's challenging. You know, what I've found over the years that I've been here, as one of the more challenging elements, is the cultural piece. Think about something as basic as how we incentivize to pay people, right? If you've got a model that is rooted in, Living in your branch as a silo and you're incentivized through comp that way, that is a very complex and challenging cultural change to work through. I think there's really two components to it. One is it would be difficult just structurally to get there. You've got the second element where it's a difficult cultural change. We think there's some there. The follow-up on that was if they don't have a delivery advantage, theoretically, they would compete on price, especially when supply is a little bit more readily available in the industry. Why are you okay with the fact that your delivery advantage is going to lend itself to favorable price cost if your large competitors start to get real aggressive? I think that, you know, the question is why are we comfortable being a value-added seller in the face of the possibility that a competitor might use price as a competitive approach. Glenn, do you wanna talk about how we win as a value-added distributor? Yeah. I will tell you, Sam, it's we can't manage the way they run price. We think that our approach and our value-added approach is meaningful and will give enough value to customers that we can get more price in the market than, you know, if they take price down so. Sam, one follow-up I'll add to that, which is all of the research that we've done to segment the customer base and understand the customer better, which you only got, you know, the tip of the iceberg of all the work that we've done along those lines. It is pretty clear to us that the best service product in the market is gonna command the best price and the best volume. The other thing is the competitive set is not just the bigger players. It's also the 40-ish% of the market that's fragmented, and we know that this creates a competitive advantage against them. Yeah, just to kinda underscore your comments, and Jason maybe you can comment on this also. In the research we've been doing and the project that we've been managing together, the issues that we showed you today about what really drives loyalty or churn, you didn't see price. That doesn't mean that you can go way off the reservation, but what creates loyalty or dissatisfaction are the five elements of service that we were referring to. Yeah. If you refer back to the cartoon that you saw with issue resolution, ordering, delivery, invoicing, those are actually projects that we're running in Los Angeles and Denver. We've heard time and time again that those are key elements of a service platform that really start to make. Price is always gonna be a factor, but it starts to really reduce how that really impacts buying decisions. We've seen our ability to gain share when we execute on those five areas, and we've seen churn when we don't. We think that that's typical in the market. We certainly are continuing to invest in our service platform to drive that value. The last thing I'll share is we are now keeping track of customers who 50% or more of their spend with us is through the digital channel. They become entrenched in that. That's hard to walk away from. If we're delivering with excellence and have an easy platform, we do think we create that stickiness. Hi, Garik Shmois, Loop Capital. Thanks for all the information over the last few days. My question's on M&A. As you're looking at the targets, would you anticipate a material amount of consolidation on your end? Are there targets with a high degree of current branch overlap? Then secondly, would you characterize this as more of a buyer or seller market in the context of wanting to pay a valuation multiple lower than Beacon's current valuation? Yeah, for sure. Thanks, Garik. Maybe I'll take that one and let others comment. In terms of the valuation, I'll hit that piece. I would say a few months ago, it was definitely a seller's market. I think things have settled down a little bit, certainly as we're turning the page into 2022. I think that's an important thing for us. I do think on the cadence of M&A, you're gonna see a fair amount of activity in the pipeline that's gonna be important for us, as we've mentioned. You know, I do think there's a ton of opportunity as we ramp up this team that you've heard us mention a couple of different times. We see it as being quite active. You know, the multiple that you mentioned, I mentioned the synergized multiple. Obviously, it's even better if you can buy it for less than the trading and get it even lower on a synergized basis. A lot of the capabilities that you saw us talk about today are gonna be really important. This is not scale acquisitions of the past where there was 20%, 30%, 40% overlap in the branches. This is not a way for us to buy market share and then close a bunch of the competitors', you know, branches. This is an environment where we're looking for the things that are truly bolt-on, and things that are not overlapping in any meaningful degree. You know, the presidents here, Jake, Glenn, and Jason will tell you know, if they were both good revenue branches and good money-making branches before, we should probably keep them open. Yeah, I'll jump in. I think, you know, when we think about synergies with acquisitions, we really think about what our competitive advantages can bring to bear in the acquisition as opposed to branch synergies or branch closures. Really from a synergy perspective, we bring purchasing power. Our OTC network can really, if you think about two branches in a market, we were operating as competitors, now we can operate as teammates. Two profitable branches become more powerful when they work together as opposed to, "Oh, we have to consolidate those branches." That's not gonna be our approach. Again, we bring some profitability aspects to the table with our private label and with digital that we can bring to those branches. Mon talked about our bottom quintile process. If, in fact, we happen to acquire somebody that has a branch that might be struggling, we feel like we have a methodology to help them. All those are synergies that are about growth, and EBITDA expansion as opposed to consolidation. Scanning across the room, we have a question. I have over here a question here. Yep. One back there. Yeah. Thank you, guys. Ken Zener, KeyBanc. Still trying to get my brain around why Kansas City has 10 branches versus Austin at 2. My two questions are this. First, digital, you said it was 150 bps higher margin. Is that G&A? Can you explain that a little bit? Second, and this ties into digital to some extent, amid inflation, how can you guys kind of maintain your net pricing while easing, or what's the value proposition to ease the customer's pressure that they're gonna face? 'Cause historically, you know, given today and, you know, wherever oil and asphalt's gonna go, inflation could very much be a persistent thing. You've got net pricing demonstrated by your inventory profits, but how are you gonna help the customers, i.e., avoid just the pricing, you know, in this? Does it tie to digital, etc? Thank you very much. Okay. I followed your first question, which I think I can address, and I'm probably gonna need clarification on the second part. With the first question, I think the question was explain the 150 basis point advantage to buying digitally versus buying offline. Whether that's back-end cost or that's something else, it's really driven by the bundle of the customer that they're buying. It's at the gross margin level that we're able to ascertain that. We look at customers who are buying strictly offline and the mix of sale that we were getting from them, and then they move online, and they're purchasing, and we look at that change in behavior and change in mix. I wanna just go back and re-identify for you what the real driver there is. When they're purchasing online, their bundle is more complete. They're getting all the items they need in their basket, and they're buying more private brand. It becomes routine. They don't need to remember. It's all listed for them there. It's a checklist. It's a shopping list. It's your favorites. We call it templates. We're kinda driving the mix that we want, and we're getting it routinely versus, you know, in an offline setting where that may be more episodic. We're really excited about building that TRI-BUILT brand because when it pops up on your digital channel, it's not some foreign entity. They understand what it is, and they accept that as a, you know, alternative option. Whether we have the product in inventory or not, we can make that suggested selling online, which helps build that package for them. Ken, two things, and then I'll let you clarify the second question for us. If we get to something like 50% through the digital channel, clearly, we need to look back at the OpEx and figure out whether or not we need to make some adjustments there in the way that we're going to market. That would potentially have some impact on, you know, OpEx at some point in time. The filling out the basket that Jonathan mentioned, generally speaking, the things that are forgotten or under ordered are generally gonna be something on the accessory side, which is a little bit higher margin than the rest, so that bleeds into the margin expansion. Maybe the second question to clarify. Yeah, just one other thing. I think when we do study G&A, we're gonna see it's more profitable than we think now because it's less transaction processing intensive than a counter order. But we haven't studied that. You know, this was really at the gross margin level. You had a question about inflation, though. Yeah. I'll defer right now. I'll just touch later. Okay. Thanks. Thank you. You have another question? We're probably gonna have time for one more or so, and then we'll take a break. If you have another. Hey, guys. Kevin O’Leary, I've been a shareholder at different firms for over 10 years. I wanted to go back to deals. First a comment, and maybe with the scars of time, I think a lot of investors are still questioning the utility of whether consolidation continues to make sense in roofing distribution. With that, I guess the first question is, you know, it's about. I'll call it dyssynergies and synergies. On the revenue side, when you're looking at a deal, do you guys assume any share loss of the combined businesses? Like, Midway is a good example. As I look at the map, there's a lot of overlapping, you know, smaller city locations. Do you guys make any, you know, share loss assumptions in a given market for Roofing Contractor Joe that just, for whatever reason, you know, doesn't use Beacon historically, so he's gonna go more to ABC next time? Or, you know, how do you think about revenue first? Wanna take that one? Yeah, I'd be happy to take that. Yeah. Good. Thanks anyway for being the shareholder of ten years. Appreciate that, and hopefully you'll be here for another ten years. We do in the pro forma. We've learned some lessons of the past. In the past, we've met the synergies, but the top line didn't necessarily cooperate, and that led into some gross margin compression, etc. Getting the acquisitions so that they are complementary to us is a really important aspect of what we're trying to do. Too much overlap is not a good thing, to your good point. We tried in the map to really be able to show you a street-level view of how far apart some of these branches really are. It's tough on a map that's hundreds of miles across. That's an important thing for us. In the pro forma, we do actually show, you know, some attrition there in the early days and then grow it back. We're trying to be thoughtful in the way that we're building the model and, you know, not overpromising and underdelivering, as I know some of you all believe has been done in the past. Great. That's really good to hear. Second, is it possible to sort of paint a broad brush and rank order what the most important synergies typically are on the cost side, you know, as you do these deals? Or is it so unique to each deal? Yeah. I mean, there's a level of uniqueness in all of those. It's going to depend on how those branches are performing. Obviously, if you just take it from the top to the bottom, the revenue piece, you know, we've gotta understand what some attrition might be and then how we're gonna grow off of that. The gross margin really comes down to two things. Do we have pricing capabilities that maybe that entity doesn't really have? Do we have better market data, local data, etc, that's gonna educate pricing? The model that Jonathan has spoken about, when that becomes, you know, part of the fabric of Beacon, that'll be really helpful for us. The buying synergies, clearly. You know, at our scale, we should be able to buy better than a local distributor, and we should have better product availability, which is one of the things Jason mentioned as he was talking about the Midway transaction. I mean, they could have sold more shingles had they had more shingles in the last, you know, year or so. So we know that we're gonna be able to bring product to them in that framework. Then on the OpEx side, look, we're not trying to slash and burn as we're buying these companies. Clearly, we'll have some G&A synergies there, but I'd say the main driver is gonna be on the gross margin line and then us bringing the tools to really grow revenue at a faster clip than maybe they would have done on their own. Yeah. On that last point, digital, our national account sales capabilities, some of the commercial capabilities that Jake went through in some level of detail, for most of these companies, they don't have access to those areas of expertise. That should be a revenue-driving synergy that it kind of depends on the business case, but is available to us in these situations. Mun, you were gonna say something. Yeah. I was just gonna mention your comment about the acquisition in Kansas City. I mean, we do think density, market density is really important. Leverage economics are extremely important to us. Where we see we're overweighted in certain markets, we're delivering greater EBITDA. Great. Thank you, guys. Maybe one more, and then we're gonna have another question and answer session at the end with Julian and I. There'll be some questions clearly we can do there, but maybe if we've got time for one more. I saw a hand in the back. Let's go there, and then we'll let us go to break. Okay? Thank you. Paul Dirks with William Blair. Just quickly touching upon the gross margin and, you know, the Ambition 2025 question, obviously a 27% target there from the normalized 25.8% last year. Just curious how you see the trajectory going over the next few years. In other words, as we see price cost normalize, should we expect to see perhaps a little bit of a dip before a step function higher as the new pricing model comes online? Or how do you guys envision the trajectory of gross margins over the next few years? Thank you. Yeah. Hey, good question, Paul. When you look at the gross margin implicit within the guidance for 2022, you're going to see the 90 basis points of inventory profits roll off. You're gonna begin to see some of the traction that we're having around the initiatives. I've got a gross margin walk in a few slides, which you've probably taken a peek at. But I would say it's gonna be fairly methodical over that time period, recalibrated against the 25.8 normalized base. Obviously, if you're gonna compare it against the 26.7, you're gonna see the dip, and then you'll see it come back up. Why don't we break it there? Let's take 15 minutes for a break, and then we'll come back up. I'll do a section on shareholder value. Julian will close, and then we'll do some more Q&A. Great. Move these back. Hey, welcome back, everybody. We'll give you a second to take your seats before I get started. Hopefully, the information that we've been sharing with you has been very helpful for you to understand Beacon's past, present, and more importantly, the future. I'm gonna try to wrap everything together for you, at least from a financial perspective and how we're creating shareholder value, and then Julian will come up and close, and then we'll do some Q&A and look forward to having lunch with you as well. The investment thesis. Julian talked about this in the beginning. Why invest in Beacon? These two top boxes have really been the storyline for the last two years as Julian and I and others have spoken with investors. Resetting the business focus, making sure that we know what our core businesses are, the residential roofing business, the commercial roofing business, and the overlapping complementary business that Julian mentioned. Recruiting the team that you've seen today and yesterday has been really important. That's been a big linchpin of our ability to come forward and say, "This is where we're going." You've heard us talk at length about repositioning the balance sheet. We can't invest for growth if we don't have the ability to invest. We've done a lot in terms of the divestitures, interiors, most specifically, as well as the refinancing, which has given us the ability to get the leverage where it is, where it needs to be, and that in turn gives us the ability to invest. We know we have a good market. It's an attractive market. It may be slow-growing, but it's an attractive market. It's a large market. It is still a fragmented market. We know that through consolidation, there will be an improving industry structure. I believe we've seen the benefits of that through the COVID period as well as in the post-COVID period. We've wanted to have this investor day for a long time. I think Julian and I have been talking about, hey, we should have an investor day for probably a good 12-18 months, but we know that we needed to do things to be able to stand on this stage and talk to you about the future. We needed the team to come forward. We needed the portfolio to be adjusted back to those core basic residential roofing and commercial roofing. We needed to get our leverage at a place that gave us the ability to invest. Candidly, we need to establish a track record of success. We've done that in the last two years. The missing pieces have become evident to us, and those are really the bottom two boxes that you see here. It's about growth above market, it's about margin enhancement, and it's about the ability to deploy capital both for growth and efficiency, but also the ability to return capital to shareholders. The Ambition 2025 really adds these two bottom boxes in that heavy, healthy balance between organic growth and inorganic growth, improving the margins through all the mechanisms that you've heard the team talk about, and investing the cash flow for growth, for efficiency, and certainly the distributions. The value for the shareholders and the stakeholders, all under the framework of ESG that you heard the team talk about yesterday. Being able to announce a $500 million share buyback program and certainly being able to reinvest in the business, that's why you should invest in Beacon. This context of history is really important, and the recent results can give you a sense of what this team is capable of. Under Julian's leadership, if you look at what we've done since 2019, he joined in late 2019. Look at the performance against a 2019 base in 2020 and 2021. 7% sales momentum, 310 basis points of gross margin accretion, 400 basis points of EBITDA margin expansion and a 38% CAGR of Adjusted EBITDA dollars. That's unlocking value, and we expect to continue to do that over time. Some of these metrics, not the least of which are the gross margin and the EBITDA margin, have been somewhat range bound in the last 10 years. You can see those orange lines or blue lines breaking through the barriers. We have broken through the gross margin barrier. We've broken through the EBITDA barrier. You've wanted us to be here for a long time. Double-digit EBITDA margins is something that we've been talking about for the last two years, and we're there, and we're gonna continue to be there. That's an important breakthrough. You'll see in the OpEx slide in a few minutes, a breakthrough there as well. We're gonna continue to drive for margin enhancement. We're gonna continue to invest for growth. High single-digit growth in the future is a really powerful mechanism for us to drive value. As I mentioned, there's been a huge change in our balance sheet. The ability for us to generate significant Free Cash Flow. Those three years, the last three years, are our best three years of Free Cash Flow. Historically, we were at about 45% conversion. That conversion ratio is against EBITDA. We would expect to beat that on a going forward basis. We tried to give you some visibility in the cash flow chart with the inventory challenges that we've had recently in the inventory drawdown that we had in 2020 during COVID, so that you could understand what cash flow would have been absent those situations. The balance sheet is in tremendous shape. At 2.1x levered, that is a really good neighborhood for us to be in. It gives us lots of optionality, lots of flexibility. It's a far cry from where we were at 6 times just a couple of years ago. It's been difficult to sit on the sidelines when we were over-levered to watch others buy companies, to watch others deploy greenfields. We were able to remedy that situation and no longer have to sit on the sidelines. That we could be acquisitive, that we could deploy greenfields, and we can invest capital for growth. We've got $1.5 billion of liquidity that's available right now. Through the ABL that we have and the cash on the balance sheet, we have capital to deploy. We also, through the refinancing, made it a key element of that refinancing strategy to clear the decks, to in essence, have no maturities between now and the end of 2026. That framework has been set up to be able to do all of the things that we're talking to you about today. They were done consciously, strategically, sequentially, to be able to get to this point, to be able to invest for growth. Julian started in his opening remarks with the Ambition 2025 targets. These are very meaningful to this team. $9 billion in revenue in 2025. $1 billion of Adjusted EBITDA in 2025. A double-digit CAGR and 11% EBITDA margins. I'll walk you through the details. To dimensionalize the 8% growth, there's a couple of easy ways to break it down. The $400 million of market growth, the $700 million that Jonathan and his team talked about, the $200 million of greenfields, and the $1 billion of M&A. That registers $9 billion on the revenue scale, not the Richter scale, but the revenue scale. It's a well-balanced portfolio. It's about 5% organic growth and about 3% inorganic growth. We have the ability to do that. We have the capital to do it. We have the team to do it. We have the market to do it, and we have the drive to do it. Gross margin. A couple of really important setups here before I go through the slide. The dashed lines give you a sense of where we were. Average margin from 2012- 2019 of 24%. Peak during that period, 24.8%. When you look at the 2021 performance, the normalized 2021 performance and the 2025 target, it's all above where we've ever been, sustained over that period of time. We broke out last year. The execution that we were able to accomplish in an inflationary environment was a testament to the capabilities of this team. Yes, there was inventory profits. We've talked with you about inventory profits quite a bit to try to dimensionalize it, to be transparent about it, so that you knew when those inventory profits would go away, that you'd understand what the baseline would be and how we're gonna grow off of that. The path to 27% gross margins has a couple of key elements that we've spoken about. The digital and private label. The reason those are grouped together is there's some overlap there. We do have private label, a significant amount of private label that goes through the digital channel. We wanted to make sure that we showed you the blended element of that. That's the 65 basis points that you see there of accretion. The pricing model that Jonathan talked about, he mentioned that it probably won't be fully operational until 2023, but between 2023 and 2025, about 50 basis points. He said 50 basis points or more of accretion from the pricing models. That's really gonna be helpful for us. The quintile methodology. Munroe Best talked about the quintile methodology. He showed you a $75 million opportunity in the quintiles. We split that for modeling purposes about half in gross margin, about half in OpEx. That 40 basis points is about half of that $75 million. There are some offsets there, for sure. If the commercial business grows like we think it will grow, there'll be a little bit of unfavorable mix there. We also know that as we buy... When you roll all that together, it gets us to about 27% gross margin and a far cry from where we've been as a company and certainly even in some of the best times that we've had in 2021. OpEx, again, I'll point you to the dashed lines at the top. The important thing is lower is better here. It's like golf, right? You wanna be lower. The prior average of 18.4% and the prior trough, the good guy, 17.9%, we broke through that in 2021. As we walk across to our Ambition target of 17%, couple of key elements. The impact of sales growth. Certainly, the new growth will come on at incremental margins, and that will provide us the ability to deliver 90 basis points of sales impact. Productivity. One of the things that Julian brought to our company was the continuous improvement mindset. How do we do it better, smarter, cheaper, faster every year? How do we leverage sales per hour worked? How do we leverage the quintile branch methodology to make sure that we're adding value every single day at every single branch by every single person? We intend to fully offset inflation with productivity. We know there's going to be inflation in the market, whether it's labor, lease costs, fleet costs. We know it's going to be out there, and we've got to do a good job of offsetting that through productivity. Excuse me, the bottom quintile branches. We know that better service is better for cost. We know that the OTC model is better for cost. We know that less hours per delivery, less miles per delivery, better fleet utilization. You all saw that yesterday in action at the Houston Hub. There'll be some things we have to figure out. We don't have line of sight to 150 basis points. We have most of it under control, but we're gonna figure things out over the next four years. That's what good companies do. They set ambitious targets, and then they go get it. That's what we intend to do. We also know that we're making some strategic investments, and those will be operating expense in addition to capital expense, but operating expense. We know we're going to invest in the OSRs. We know we're going to invest in the greenfields. We know we're gonna invest in digital. We know that some of the companies that we bring on board with M&A are gonna have a higher cost structure. It will take us a little bit of time to get that cost structure down. We fully expect to set a new benchmark for OpEx at 17% of sales. Here's our plan. This is a fabulous peel-away slide. I'd encourage you to print this one off when you get back and put that one in the folder. This is essentially your peel-away. It's your takeaway slide, and it's got all the Ambition 2025 elements in it from a financial perspective. 5% organic growth, 3% inorganic through M&A, giving us 8% total CAGR growth over that 2021-2025 time period. The market, low single digits. The initiatives driving 3% above market growth. The greenfields and the OSRs that we've spoken about are a big part of that. Then the re-acceleration of M&A, the 3% inorganic growth. We think there are value accretive transactions out there, very similar to the deal that we did with Midway, which is going so well, as Jason mentioned to you. The margin increasing gross margin, reducing the OpEx margin, obviously getting more leverage out of OpEx, getting us to 11% EBITDA margins, places where we as a company have wanted to be and wanted to go. There is a lot within this in realizing the benefits of this new business model, the scale advantages that Julian mentioned, the networked model that we have, and the specialized capabilities that you're hearing us talk about and hearing us continue to build. We have a great model here. Strong cash flow. Obviously, when you do a good job on EBITDA, you're generally going to do a good job on cash flow. That EBITDA combined with a new leverage target of around 2.5x, we know we're going to need flexibility around that. If there are opportunities to go faster on M&A, go faster on greenfields, buy back shares faster, we're going to utilize that operational flexibility on leverage. We should essentially moderate between two and three depending on the circumstances. We'll have $1 billion of dry powder. That's at 2.5x leverage in 2025. We'll have $1 billion of dry powder. We need to have that flexibility to be able to take advantage of situations as they develop. We want to be nimble as a company. We want to be able to pounce when the opportunity presents itself. This will be important for you as you think about modeling us out. The bottom set of bubbles there are going to be important. $3.4 billion of cumulative EBITDA. You know we're going to end a billion, but the roll from 2022 to 2025 amounts to $3.4 billion of cumulative EBITDA. We've modeled working capital at about 17% of sales. Interest cost at about $60 million. Tax rate at about 25%. Obviously, the cash tax rate is less than that. That gets us to an operating cash flow of about $2.2 billion. We've got some annual fixed charges. You would know those as the preferred dividend as well as under the term loan. We have about a $10 million debt payment that we have to make annually between now and 2025. Those are the fixed charges. Historically, we've also had about 1% of CapEx, largely maintenance CapEx. We would anticipate maintenance CapEx to be about the same going forward, which brings us to $1.8 billion of what we're calling distributable cash flow. You add the leverage that I just mentioned to you and the $1 billion at 2.5x 2025. We've got $2.8 billion of investment capacity. Now let's talk about capital allocation. The $2.8 billion of investment capacity breaks down in a couple of pretty significant ways. $300 million of growth investments. That's additional CapEx. I'll dimensionalize that for you in a moment. $1 billion of M&A. You've heard us speak about that already. Five hundred million of share buybacks. We'll still have that $1 billion, which is really important for us. It could clearly be invested in any one of those buckets. As the opportunities present themselves, that's what we'll be looking for, those opportunities to invest that extra $1 billion. Looking at the organic side of things, 2% of sales for CapEx. That's 1% maintenance capital and 1% for growth and efficiency to make sure that we have the capability to deliver for our customers, the capability to grow to $9 billion. You'll see those dollars expended for fleet, facilities, technology. Specifically, if you think about the fleet, there's both a renewal element of it, because as you heard Mark Schoenfeldt talk about yesterday at the hub, our fleet is not the youngest. We want to make sure that we have a good fleet for our customers, our employees, for the environment. We know that the new trucks, they have better repair and maintenance, better fuel efficiency, lower emissions. We're doing the math all the time in our heads to make sure that we're optimizing the investments for the fleet. Facilities, OTC. You should expect us to continue to expand that model. You know about the greenfield investments. Branch optimization. You saw Houston yesterday, which is a model of efficiency. It is laid out in a really good fashion for us to have the employees able to do their jobs safely and efficiently. It's laid out well for will call customers who are coming in to pick up from the branches. It's laid out well for our delivery drivers to be able to hook and haul. It's a really important thing for us to do. You'll see us begin to think about ways to take 450 different branches, 450 different models of branch operations and making those much more homogeneous over time so that we're built for speed. Technology. Jonathan mentioned this a couple of times in his remarks. Digital is a huge investment for us, and it will continue to be an important investment for us as we scale to 25% and up to 50%. The pricing model that we'll work on hard this year to get it up and running by the end of the year, so it's adding value in 2023. Automation. I told you that we don't have everything solved yet on productivity. We know automation is a big thing, right? We're gonna learn from others, we're gonna deploy those automation capabilities at Beacon, and we're gonna drive value as a result of that. The $900 million of above-market growth that we've mentioned, so the $700 million from the customer experience and the go-to-market initiative, plus the $200 million in greenfields, that's the $900 million that I'm speaking of. That's gonna generate about $110 million of EBITDA in 2025. The run rates are higher. The sales reps aren't necessarily gonna be fully deployed or fully mature by 2025. The greenfields aren't gonna be fully mature or fully deployed by 2025. The run rates of these things are actually higher than the numbers that we're targeting for 2025. The M&A allocation. A billion-dollar strength staying true to the core. It's really important for us to buy companies that fit well with us. I walked you through the ideal target, the type of company that we're looking to buy, the size that we're looking to buy, the type of products, the geographies. Those are all gonna be really important. We're gonna be very disciplined in the way that we're going to market in acquiring companies. The buybacks. We've been talking about buybacks for a while, too, but we're delighted with the announcement today. The board is excited about the announcement to return capital to shareholders. It is because we have such significant confidence in these ambition targets, in the growth, in the cash flow generation. It also reflects our perspective on the share price. It is the third allocation priority, but you should expect us to be in the market consistently returning capital to shareholders. The investment thesis summary. When I joined Beacon, Julian and I fairly quickly began to sit down and talk about what Beacon could be. Internally, he talks a lot about unlocking the potential, and now you're beginning to see what unlocking the potential is really all about. When we sat down together, we saw great things. We saw a phenomenal history. The timeline that Julian went through, who we were and who we are, it's a phenomenal history. We stand on the shoulders of the folks who built Beacon to the scale that it is. We also saw the untapped potential of having that scale created, but not yet delivering the value that was embedded within it. We also saw a team that wanted to win. They wanted to be pointed in the direction that we wanted it to go and just tell them to go get the value. They want to do that. They want to win. You saw the morale yesterday in the Houston hub. That team is winning in Houston. We wanna win in every market that we're playing. Our plan set forth a new trajectory of growth, heightened margin performance, and the ability to deploy capital for value-creating opportunities, whether those be growth, margin enhancement, CapEx, or shareholder returns. We're extremely excited about where we're headed, and we've been delighted to share all this with you. Let me invite Julian back up for his closing remarks, and then we'll go to Q&A. Thank you. What he said. Some key takeaways. I mean, Frank really did capture it, and I'm shaking here 'cause I'm really proud of what we've been able to do over the last couple of years. When I joined Beacon, you know, I said yesterday, I knew the history of the company. They'd been a customer of mine for a long period of time. I knew about their growth story. What I didn't know was the internal dynamics. While I would never wish a pandemic on anyone, quite honestly, I think the crisis spurred us into action. What I found was 6,000 people who, as Frank said, really wanted to win and pointing them in the right direction and investing in their growth meant they would deliver. We needed to make sure we were focused, and we needed to take a look at the portfolio and get that right. We took that opportunity. The divestiture of the interiors business, the divestiture of solar, has given us that focused business where it's that, those core markets that we are in, residential roofing and commercial roofing. As I've said, I do think those, that distinction between those is important. What I want you to take away from that is we have a strong team that is with a demonstrated history now of executing at a high level and in an environment which was challenging. Sometimes I think we made it look a little too easy. This has been hard work over the last few years to get this done in an incredibly challenging environment, and I wanna thank all 6,000 of my colleagues for the effort that they put in over the last 24 months. It's been extraordinary. It's been hard, and they've responded with incredible passion for the work that they do. The second thing is that we have multiple paths to growth. I think the history of Beacon and the growth of Beacon in the past had really been predicated on M&A. That's not where we are today. We still think it's a valuable tool, but it's not our only path to growth. We have multiple paths to growth. I think that on the M&A side, my colleagues up here earlier as they were answering questions were very polite. Quite frankly, the history was that with the performance levels of Beacon historically, we would buy companies that were sometimes, not always, but sometimes better than our performance. We can now show you the numbers that say, "We're gonna buy companies that don't know how to operate as well as we do and turn them into us, not the other way around." The problem with turning them into us in the past was they weren't necessarily better. That is a huge difference. We are now a much better company. The third thing I want you to take away is we have multiple paths to margin expansion. Historically, it's been a real challenge, but a differentiated approach and the tools that we've built. This goes back to competitive advantage. The tools that we have built are margin-accretive tools, whether it's digital, whether it's TRI-BUILT. Overall, those businesses, those tools that we have, those capabilities that we've built, those advantages that we can deploy in the market are margin accretive. I'm not sure that that's been true in the past either. We are now in a place where the scale advantage gives us the opportunity to network our branches, gives us the opportunity to deploy technology and product brand across multiple markets and drive multiple paths to margin enhancement. On the continuous improvement side, I mean, look, like I said, I just spent my entire career until Beacon in the manufacturing side. You just come in every day, and that's the only question you ask, "How am I gonna drive my costs down? What are the things that I'm gonna do?" Every year, no matter where you are in manufacturing, you say, "This is our estimate for inflation, and here's the plan to beat it." You have to do that. It's essential. That's the mindset we've changed. The bottom quintile branch process that Mun described certainly yielded more improvements than I had anticipated when I came in. I was probably a little less ambitious than I should have been, but that didn't stop the team. They went after it, and they delivered it. To come back, setting a target of $30 million-$60 million, exceeding that, and then coming back with a $75 million incremental plan, I think that demonstrates a mindset shift that's taken place at Beacon over the last few years. Lastly is our focus on shareholder returns. That is a really important shift for us. I think that it's taken time, and I think that given the prior debt load, there were real concerns about how we were gonna do that, how we were gonna generate this. Honestly, today, and like I said, I don't think it's an argument amongst the team that's sitting down here and over here, we're the best roofing company to buy anywhere in the world right now. And we are really excited about being able to return to investors the capital that you've entrusted us with, and we think it's powerful. Those would be my takeaways. This team's ready to perform. We have multiple paths to growth. We have multiple paths to margin-enhancing initiatives, and we are really focused as a leadership team on ensuring we're making sure the returns to shareholders are better than they've been historically. With that, I'm gonna ask Frank to come back on stage. I'm gonna set this down. We're gonna bring the stools to the center, and we'll open it up to questions. Same process as before, if you don't mind. If you can raise your hands. Thanks. We'll do our very best. He'll do his very best. I'll sit here and say nothing. Sam Darkatsh, Raymond James. Again, thank you for all the efforts. I'm interested in the $500 million repo plan. What's the? I know you said you'd be in the market consistently. I'm not sure. I keep putting the word consistently in my model, and I just get an error sign. What's the? Cadence, do you think, is it gonna be front-end weighted? Is that a good way to think about 2022 repo? My follow-up to that is, if the pipeline for M&A is so fertile that you can get $1 billion or so in after synergies below the valuation of your stock, why not just make that $1.5 billion? I mean, why even do repo if there's that much accretive M&A? Is that a organizational capacity issue, or why not just do all M&A if that is the metric you're looking at? I'll take the last one first, and I'll give it a little bit to Frank because we're still arguing about that a little bit. Obviously we have to put a proxy out there in terms of, you know, what are our targets? What do we think we'd do? Deal flow right now, you know, I'm pretty optimistic in terms of what we could do. I don't know what it's gonna be like in six months, 12 months. It might get better, it might get worse, but we have to have some proxy out there. If we see good deals that we think we can do, we're gonna take them. Now, what I don't wanna do organizationally is lose sight that the key difference for this plan versus history with Beacon is the organic component. If we have all of our resources focused on the M&A and we lose that focus, I get a little concerned. That's part of the reason we've stood up organizations around this. The history was that didn't exist, and the M&A component was actually said, "Oh, you've got a business you want," it goes into the field. Those are the people that do the work. That's how it happened. There's a little bit of organizational capacity, but I also know that even if we can get the synergies that we believe, organic growth is still fundamentally more valuable, and so we have to demonstrate that we can drive organic growth, and I do not wanna take the focus off the field. I went back to it earlier. We really did, you know, that question that we asked, not what's your budget, but what's possible, really changed the team's view of how they come at the market. I think their eyes have been opened, and they say, we can do a lot. I wanna go back to the question you asked earlier about pricing, because if you don't ask it again, you should. This isn't a land grab. Those numbers up there are not chunks of market share that are happening, and we don't have a market share metric. Certainly not market by market, we don't. This is incremental growth on that. It's not chunks of market share. There's very little incentive to go slashing price to give up because it's leaking. It's not big land grabs. I think part of the history was there was big land grabs, and that's gone. I don't believe that this plan says we are gonna just boom, big land grabs. It's not what it's about. That's where I think the pricing will be sustained. I think it's manageable. The pricing in this industry tends to be determined by the gap between what the manufacturers set. We've got a nondiscretionary repair and replacement market that you're gonna pay what you pay. Some of it's driven by insurance, so people just go, "I wrote my insurance check. They owe me something." That one worries me less because I just don't see this as a land grab. Yeah, I think you've dimensionalized the right framework, which is how fast are you gonna go? How much leverage are you willing to take on, and what does M&A look like? We gave ourselves that operating flexibility, a half a turn either side of 2.5. Look, if the stock stays at 55, we're gonna be more aggressive in buying shares back, as you would expect us to. If we end up with opportunities in the M&A side, which we've got to pay 12x for, like, and we don't see synergies that get us below, you know, kind of eight or nine, then, you know, we're probably gonna toggle more toward buyback. It's gonna be a very fluid equation for us. That dry powder was there for a reason. It was there to be opportunistic if the opportunities presented themselves. Obviously, if the share buyback goes more quickly, then we'll exhaust it and, you know, be thinking about the next program. We're actively discussing the pacing right now. I think the point around consistency wasn't just that you would take the 500 and divide it by four. It was the point that we expect to be in the market on a consistent basis. We won't be dogmatic. No, that's right. That's it, I guess. Okay. Ken Zener, KeyBanc. Regarding this capital allocation, given the steadiness of your end market, more on the replacement repair compared to perhaps distributors that are more new housing centric, therefore cyclical, just to expand this with clients that I have that focus on dividends, how is your thinking evolving around that given the confidence you have in cash flow? Obviously I saw your slides. I mean, how would you put that metric on for extending the appeal of your stock given the stability of your end market? We talked about a dividend. We believe there's more value accretion to shareholders through the buybacks. We also won't be forcing a taxable event on shareholders. We feel like we've got, you know, a fair number of pools of capital to attract, versus you have to put a percent or more on the dividend in order to make it attractive to the pools of capital that I think you might be thinking of. We have not had any difficulty in attracting value, GARP, you know, hedge, etc, index long term. We do feel like we have a good shareholder base that will be attracted to us through these growth trajectories that we've mentioned. You know, more than anything, it's right now the higher return based on where the stock is versus where we think it could be, should be. It tells us that there's value in buying the shares back. I think we won't be dogmatic, and it is a permanent call on capital. The flexibility early on is really important to us because we're just starting this journey. I said yesterday, we've gone through the transformation. The transformation is behind us. This is our new plan. We wanna make sure we've got flexibility. Yes. Thank you. Ketan Mamtora, BMO. Thanks for the presentation and all the details today. Want to just talk a little bit about, you know, how you think about on the M&A side, you know, in terms of where you think there is, you know, kind of most opportunity, whether it is sort of filling up regional holes in your sort of the core market, you know, whether it's on the commercial side or thinking about sort of, you know, where you think is, you know, kind of more opportunity on the complementary side, and areas that you think, you know, could provide most opportunity. Thanks. Frank talked in his presentation about 20 active conversations that we're having. It's across the board. I think that we are pretty nondiscriminatory right now in terms of each of those segments. It's still early for us. We're reengaging in this. We're finding opportunities. I think that the difference might be with commercial roofing, you really do require specialist skills. We would look at what they bring to us in certain markets or what can we bring to them. The criteria might be a little bit different. But we are looking at opportunities across all those areas. As I said, the thing that we talk about internally is own the overlap. We probably wouldn't go into a complementary market where we didn't have strength in roofing. Just go in there and buy a siding distributor where we've got very low market share or we're trying to rework our share in roofing. We're not even gonna be, you know, consistent about that. If we think that they give us particular strength in the market, probably break that. We're really looking for owning that overlap. Really it's across the board. We've focused the portfolio on where we wanna be now, and so we're interested in everything across that portfolio. One thing that's important to dimensionalize how we're doing things, it's very much a bottoms-up process. I don't know the Houston market as well as Damian does, that you guys met yesterday. When we ask Damian, "What's available in the Houston market? Who are your competitors? How much overlap would there be? How do you think you can run their business better than they can run their business?" We're very much cultivating it this way rather than us trying to pick things from a Dun & Bradstreet report or something like that. We're very much trying to bring it up from the bottom because they know who the competitors are in the market. They know where the branches are located. They know what kind of product mix that they have. They know what they're good at or not good at. They can tell us whether or not it's a good fit, good fit culturally, good fit product-wise, geography within the local town. All those things are really important. You know, not surprisingly, those things happen to meet in the middle, and we end up making some good decisions. Midway's a prime example of that. Yeah, I look, I'll tell a little anecdote. Jason brought that to me, and I sat him down in a hotel, and he's gonna smile now 'cause I'm like, "How badly do you want this?" It wasn't about how badly I wanted it. How badly do you want this? And he said, "I want this really badly." I'm like, "Okay, let's make a run at this." I mean, it was. I think it's very much a change of focus for the organization that we really want our operators to own their business. Got a question over here from Garik. Hi. Thanks. Garik Shmois, Loop Capital. You've done a tremendous job over the last two years in a difficult environment, but the market has also been fairly extraordinary. Sure, yeah. I think it offered a fairly sizable tailwind in over the last 18 months in particular. If the market does not improve in a 2% clip over the next several years, could you speak to perhaps some of the sensitivity around the EBITDA margin forecast? What levers do you have to pull, and how are you dampening the cyclicality in EBITDA if the market doesn't participate? First of all, absolutely in terms of market tailwind, I'd be naive to suggest it hasn't. It's not been all candy and roses. Storms were down last year. That's obviously a significant demand, both residential and commercial. The supply chain, I mean, it's really been a challenge. If we'd had more availability of shingles, we would have sold more shingles. If we'd had more availability of polyiso, we would have sold more commercial roofing fasteners. When you talk about a tailwind, absolutely, it certainly drove a lot of incremental pricing, for sure. I know that's not your question. That's fundamentally where I see some still some opportunities for growth in the market. If it is rollover, digital's not slowing down. Our private label adoption isn't gonna slow down. Our branch improvement is not going to slow down. We can do those in any market, in any conditions, with any demand environment. It'll certainly have an impact on our top line. Yeah, would we expect to see some rollover on pricing pressure? Yeah. Look, we're in the middle of the supply chain. We go back up the supply chain and we're talking to our manufacturers about, "Look, this is where the pricing dynamic is in the market." We've got the ability to react in that space as well. I mean, they face the same dynamics as we do, so we're working on a sort of margin in between that and trying to take the difference. Look, I'm optimistic. I don't think we're best in class, quite frankly, today in terms of either gross margin performance or even down margin performance, and I think we've got room to improve. I think we put in place today a demonstration of how we think we can do that. I don't think it's price has to go up and we can take a margin on price. I think it's all self-help initiatives. In Julian's closing when he was going through the takeaways, he said two things that I think are important in this answer. One is multiple levels of growth, and the other one is multiple levers of margin expansion. If price isn't gonna be cooperative with us, like we know we can hire more OSRs, we know we can deploy more greenfields. The companies that are gonna be out there are gonna be struggling in that environment as well. They're gonna be, you know, for sale maybe even a tad cheaper than they otherwise would be. You know, we have levers here, and we also have the dry powder that I mentioned, so we can accelerate things as necessary. You know, we put together this Ambition 2025 set of targets, and we know that we can get there a lot of different ways. Yeah. Bill Fiedler, Keeley Teton Advisors. Really nice presentation. I appreciate the hard work and time dedicated to it. Your last comment was the first time that weather had been alluded to in any way during this entire presentation, and that's a real departure from the past. It was actually kind of refreshing in a way, and I imagine it was intentional as well. Is there anything to say about that beyond what you just said about storm activity in terms of the historical context that may put the last few years in perspective relative to where we might go in the future in a- Yeah. You know, quote-unquote, "normal environment"? I laugh because when I joined the company and I went back and read earnings reports and releases, I said something along the lines of probably a curse word in the middle. I'm not the weatherman. That's not what we're gonna do, and we've been very conscious about that. The reality is, you know, it does affect demand. If you actually look at history, you know, look, this is sort of normal demand. I mean, as you know, I came from Owens Corning, and I think Owens Corning's done a terrific job of sort of modeling that out. I know all the effort that they put into it. I was at the company at the time when they did it. We... I really look at their model and say that they've kinda got that, but the way we plan for this is average. Will there be years in which there is below average? Yeah, probably about half. Above average? Yeah, probably about half. That's sort of where we are. What is probably a part of your question is you can actually respond well to weather events. I would go back to two things in the presentation on how to take advantage of that differentially. One, I'll go back to it over and over again, the networked model makes a difference. Being able to come in and serve a market and move things around in a market, get inventory in, that aids that type of event. Winning those markets is tremendously powerful. How we go about it is focusing on the accounts that do it. There are specific stormers out there who move market to market and cover storm. They have interactions with the insurance companies. They do it very well. They know what the process is. They make it easy for the homeowner to work through it, but they move market to market. As you think about our national accounts model, where they can be served by a Beacon branch in a storm market, there's no one else that can go over to another market and say, "I've already got my credit set up. I've already got the branch network. I already know who my account manager is. I already know." Those two things, that national accounts model and networking our sales organization and networking our branches, huge advantage. I think we will differentially take advantage of those, but from a planning standpoint, we're average. Thank you. Ketan Mamtora, BMO. You have highlighted a number of initiatives, you know, today in the greenfield go-to market initiatives. I'm just curious, kind of what are the checks you've put in place to kind of, you know, sort of measure that some of these investments that y'all will make are generating the kind of returns that y'all are expecting? Thank you. Well, we're smiling 'cause we've put together an Ambition 2025 checklist of KPIs, etc, and just had a good discussion with the board about it last week. We are, as you probably saw yesterday, much more data intensive than we have been in the past. You should expect us to track every single one of these initiatives and to understand whether we're progressing against this plan and whether the returns are coming in as we expected. We have the ability to toggle speed and pace, which will be important for us to do. If something's, you know, being more accretive than maybe we thought of, we should do more of that, right? And if it's a little less, we should do less of that. We've got the measures in place. We've got some new team members that we're bringing on board to really help us stay true to the project management, program management, you know, KPI tracking, etc. We will fully intend, give us a couple of months, but we fully intend to be able to have a conversation with you on earnings calls, in roadshows, etc, about how we're doing on all of these things. We disclosed it here 'cause we intend to disclose them in the future. Fair enough. Well, seeing no other hands, we'll shut down the questioning here. On behalf of the entire Beacon team, the leadership team that hopefully you've had an opportunity to meet and interact with, I greatly appreciate all of your efforts to be here. I know there was some with travel challenges that didn't get in last night, but I'm thrilled that you made the effort to come in today. We're tremendously excited. We're a motivated organization with a plan that we will execute. We termed it Ambition 2025, not because we think it's necessarily ambitious. It's our ambition to reach there, but it's not the end either. We fully expect to meet this, exceed this, and then go on to Ambition 2030. With that, thank you. I hope you've enjoyed your time. I hope you found it incredibly valuable, and appreciate it very much. Thanks, everyone.