Good afternoon, ladies and gentlemen, and welcome to the Beacon first quarter 2022 earnings conference call. My name is Selina, and I will be your coordinator for today. At this time, all participants are in listen only mode. We will be conducting a question and answer session towards the end of this call. At that time, I will give you instructions on how to ask a question. If at any time during the call you require assistance, please press star followed by zero, and a coordinator will be happy to assist you. As a reminder, this conference call is being recorded for replay purposes. This call will contain forward-looking statements, including statements about the company's plans and objectives and future economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and often use words such as anticipate, estimate, expect, believe, will likely result, outlook, project, and other words and expressions of similar meaning. Forward-looking statements are only predictions and are subject to a number of risks and uncertainties. Therefore, actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but not limited to, those set forth in the Risk Factors section of the company's 2021 Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission. These forward-looking statements fall within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of the company, including the company's financial outlook. The forward-looking statements contained in this call are based on information as of today, May 5th, 2022, and except as required by law, the company undertakes no obligation to update or revise any of these forward-looking statements. Finally, this call will contain references to certain non-GAAP measures. The reconciliation of these non-GAAP measures to the most comparable measures calculated and presented in accordance with GAAP is set forth in today's press release and the appendix to the presentation accompanying this call. Both the press release and the presentation are available on our website, www.becn.com. I would now like to turn the call over to Mr. Binit Sanghvi, Vice President, Capital Markets, and Treasurer. Please proceed, Mr. Sanghvi. Thank you, Selina. Good afternoon and good evening, and welcome to our first quarter 2022 earnings call. With me on the call today are Julian Francis, President and CEO, and Frank Lonegro, Chief Financial Officer. Our prepared remarks will correspond with the slide deck posted to the investor relations section of Beacon's website. After management's prepared remarks, there will be a question and answer session. I will now turn the call over to Julian. Thanks, Binit. Let's begin on slide four of the slide presentation. I'm extremely pleased to report that we have started the year with first quarter records for sales, net income and adjusted EBITDA. Sales increased 28% year-over-year, well ahead of the expectations we set out in February due to a combination of focused execution of our Ambition 2025 strategy and leveraging strong end market demand. I'm also especially pleased with our team's responsiveness to a dynamic market and their ability to tackle a challenging supply situation and a highly inflationary environment. Through their hard work, we continue our track record of growth, expanding profitability, differentiating our service, and adding value for our customers. Gross margins increased by 80 basis points to 26.1%. As we have successfully done in prior quarters, our team focused on pricing execution in order to stay ahead of the cost curve. We successfully implemented multiple increases to offset the inflationary headwinds and remain price cost positive. Productivity initiatives contributed to favorable operating leverage, and adjusted EBITDA increased by nearly 90% to $140 million, a margin of over 8%. An impressive first quarter performance from the top line to the bottom line to start the year. As we have discussed in our prior calls, we have restored financial flexibility to our balance sheet. Our net debt leverage today sits at 2.3 x, and we have $1.1 billion in liquidity. Our balance sheet provides us with ample ability to invest in value creating growth opportunities, and that is exactly what we are doing. In November of last year, we successfully closed on the acquisition of Midway Wholesale, a premier distributor of roofing products with annual sales of approximately $130 million in 10 locations across the Midwest. I'm pleased to report that the integration of Midway is on track and performance is better than forecasted. We also continue to proactively invest in our team to ensure we are able to meet anticipated demand as we enter the construction season across the U.S. and Canada with a robust backlog. Our customers trust us to reliably deliver high caliber service in any demand environment, and they can be assured that we are prepared with inventory of products and services when and where they need them. Our market's fundamentals continue to be strong. The replacement cycle that underlies approximately 80% of our business remains a tailwind. A typical residential roof lasts about 20 years, and if you look back 20 years in terms of new construction, you see a historic surge in building. Keep in mind that the vast majority of this demand is also non-discretionary. On the commercial side, we believe our specialized capabilities will allow us to grow share and take advantage of the positive trends in activity. While some economic signals are mixed, we believe we are positioned to grow volume in a variety of markets by capitalizing on our scale through greenfields and acquisitions. We remain confident that we have a multiyear runway of growth opportunities underpinned by the reroofing cycle. Please turn to page five of the slide deck. We were thrilled to see so many of you in person at our Investor Day in Houston in February. There, we detailed our strategic plan named Ambition 2025, through which we intend to unlock the potential of our people, our growth engine, our operations, and shareholder returns. We have structured our roadmap in four areas with detailed initiatives that are systematic and measurable. The first area is about building a winning culture. Second is a comprehensive set of measures to drive above-market growth. Third is our continuous improvement process, which drives our operational performance. Lastly, these will create value for our shareholders. We will grow the business more than $2 billion to $9 billion of sales in 2025, an 8% compound annual growth rate. Our EBITDA will grow from $686 million in 2021 to about $1 billion in 2025, approximately a 10% annual growth. Now please turn to page six of the deck. I'll provide a brief update on our strategic initiatives, which provide insight on how we intend to achieve our plan. First, I'd like to highlight some of the ways we are building a winning culture. We are committed to putting people first and doing the right thing for the communities where we operate. Issuing our inaugural corporate social responsibility report is an important milestone in fulfilling our commitment. One highlight from that report is our goal to reduce the intensity of our greenhouse gas emissions by 50% by the year 2030. We have just begun this journey, but there is no doubt we are building a more sustainable future for everyone who has a stake in Beacon. Second, we are driving growth above market and enhancing margins through a set of targeted initiatives. We have a strong pipeline to expand our footprint through a combination of greenfield locations and tuck-in acquisitions. So far in 2022, we have opened two greenfield branch locations and acquired two others, expanding our presence in attractive markets. Our focus on national accounts is also generating results. We grew sales to our largest customers by approximately 35% in the first quarter. Our scale and capabilities position us to uniquely support contractors, builders, and other national account customers by investing in specialized account representatives who focus on the operational dynamics in each end market and high-volume customers. We also have a set of initiatives that support margin growth as part of our plan. Our digital capability continues to be a clear competitive differentiator for Beacon, and sales on our online platform deliver approximately 150 basis points better margins compared to offline channels. In the first quarter, 17% of residential sales went through this platform. We provide the most complete digital offering and continue to expand our capabilities to serve customers in the way that brings them the most value. Just this week, we added to our digital integrations, announcing our go live with AccuLynx, a leading provider of all-in-one business management software for roofing contractors. Our private label line of high-quality building products sold under the TRI-BUILT brand deliver professional results at a competitive price for customers and yield between 500-2,000 basis points of additional margin versus the alternatives. Sales of our private label are up nearly 40% in the quarter versus the prior year. TRI-BUILT is becoming a recognized and trusted name by professional contractors across our residential, commercial, and complementary end markets. For those of you who have been following us, you know we intend to enhance productivity and capacity via operational excellence. Our OTC network remains a differentiator. Currently, we have 60 markets, including over 280 branches, where our teams work together to deliver a service model that solves for customer needs. In addition to that, we have combined P&L in these markets in which multiple branch managers are all united in trying to achieve the same four goals. First is improved customer service levels. We have greater flexibility to deliver from the branch with the best combination of product and service to support the customer's needs. Second benefit is a lower cost to serve. By leveraging resources and logistics across a network of branches, we are able to reduce delivery time and mileage, improve labor efficiency, and reduce fleet cost and emissions. We have identified at least $50 million reduction in operating expenses in these branches by 2025. The third benefit is optimizing inventory levels, which has been challenging in this environment where we continue to see supply chain disruptions. However, our ability to manage inventory across locations is an advantage, and we continue to believe there is potential to cut our inventory investment by around $50 million-$100 million while maintaining service levels. Fourth, critical to our ambition is that we accelerate our talent development. Our OTC initiative creates opportunities for the people at Beacon to build fulfilling careers and for us to unleash local talent, enhancing our ability to execute on our plans. We were very pleased with the recent launch of our Los Angeles OTC hub, which is an approximately 120,000 sq ft facility with dedicated will call locations for both residential and commercial roofing customers. The hub adds value to customers by sharing market resources, inventory and systems to deliver an outstanding experience in one of the country's largest MSA. Our focus on the bottom quintile branches has also produced meaningful results, and we are continuing to see efficiency gains by deploying our best processes across the country. We generated approximately $6 million year-on-year EBITDA improvement in the first quarter, a solid first step on our way to our $75 million Ambition 2025 target. Lastly, our strategic initiatives are designed to create shareholder value, and we are committed to improving returns. As part of a $500 million share buyback authorization announced at the Investor Day, we executed a $125 million accelerated share repurchase program, which we expect to settle in the second quarter of this year. The share repurchase program demonstrates both our commitment to delivering value to shareholders and our confidence in our plan. As you can see, we truly have multiple paths to growth and margin expansion. We have a differentiated approach and have built the tools that are delivering measurable results as we embark on our journey to achieve our Ambition 2025 targets. Now, I will pass the call over to Frank to provide a deeper focus on our first quarter continuing results. Thanks, Julian, and good evening, everyone. Turning to slide eight, we achieved nearly $1.7 billion in total net sales in the first quarter of 28% year-over-year, driven primarily by higher average selling prices for our products. In the aggregate, price contributed approximately 23%-24% to revenue growth, and estimated sales volumes contributed around 3%-4%, largely driven by continued demand strength across our lines of business. Our acquisitions of Midway and Crabtree performed well in the quarter and offset the divestiture of our solar business late last year. Residential roofing sales were up approximately 22% on shingle price execution, including the recent January increase. Shingle volumes were flat year-over-year, in line with ARMA and slightly better than our expectations. This is in comparison to a robust prior year shingle comparable, which benefited from the COVID snapback and a stronger hurricane season in late 2020. The fundamental drivers of residential demand remain strong. An important indicator of the strength in residential market is the two-year stacked comparison to the calendar first quarter of 2020. Residential shingle volumes were 14% higher in the first quarter of 2022 compared to the first quarter of 2020. Non-residential roofing sales were up approximately 48% as price execution more than offset inflationary pressures and combined volumes were up about 4% year-over-year. Despite continuing supply chain issues, commercial activity continues to show an improving trend as evidenced by our strong quarter end backlog. Complementary sales increased approximately 20% year-over-year as we achieved higher prices across nearly all product categories. Higher volumes in siding and waterproofing also contributed to the growth. As a reminder, our complementary product category has approximately 80% residential and 20% non-residential exposure. Turning to slide nine, we'll review gross margin. Gross margin increased 80 basis points year-over-year to 26.1%. The execution of price increases across many product categories, including the January shingle price announcement, contributed to the improvement. In the aggregate, price cost was positive by approximately 130 basis points in the first quarter on a year-over-year basis. Our team's focused execution once again kept price above product inflation and created favorable timing benefits, which contributed to gross margin expansion. In addition, our private label sales increased approximately 40% year-over-year, providing gross margin enhancement. Higher non-residential sales caused a 50 basis point mix headwind, which partially offset the price cost improvement. Adjusted OpEx was $323 million, an increase of $45 million compared to the year-ago quarter. The increase was predominantly driven by increased headcount and wages year-over-year, together with higher selling costs, namely commissions, credit card fees, and travel and entertainment, and inflation in fuel, rent, real estate taxes, and insurance. The current year OpEx also includes approximately $10 million in costs associated with recently acquired branches net of our solar divestiture, as well as greenfields and OTC hubs opened since Q1 of 2021. Excluding the Midway and Crabtree acquisitions, our headcount was up year-over-year, largely in line with volume growth. We consciously winterized less this year, given the difficult hiring environment, and to make sure we are appropriately staffed for the healthy selling season we are expecting. Our focus on labor and fleet productivity continues to show results. Our efforts, combined with higher sales, drove adjusted OpEx to sales down 190 basis points year-over-year. Importantly, we are making investments in our Ambition 2025 growth and margin enhancement levers. We are nearly complete on building out our dedicated M&A and greenfield teams, investing in our sales organization and cross-customer experience initiative, while also progressing our work on a new pricing model and maintaining our industry-leading digital platform. Turning to slide 10, we will review our financial flexibility. Our Ambition 2025 strategic plan prudently balances the investment of capital on strategic growth opportunities while maintaining a targeted leverage range of 2x-3 x trailing 12-month EBITDA. Net debt leverage stood at 2.3 x trailing 12-month adjusted EBITDA quarter-end compared to 2.9 x at the end of the same period a year ago. Some of you may recall that net debt leverage stood at 6.1 x at March 31, 2020. Over the last two years, we have reduced gross debt by approximately $1.8 billion and significantly increased our trailing 12 months EBITDA. This transformation of our balance sheet has been integral to the launch of our Ambition 2025 strategy. We have no near-term refinancing risk due to a comprehensive refinancing completed last year, which pushed out our debt maturities to 2026 and beyond. Our liquidity of approximately $1.1 billion at quarter end provides significant ability to invest in our future. As Julian mentioned, we have started to use our restored financial flexibility to accelerate our growth. In recent quarters, this has included tuck-in M&A, greenfield openings, and rebuilding our inventory to ensure we can effectively meet demand. We will also invest in our business through capital expenditures at approximately 1.5% of sales this year. Net inventory is $375 million higher compared to the end of the first quarter of 2021, largely due to product cost inflation, which accounts for approximately 55% of the increase. We are also carrying certain elements of inventory longer than expected due to lengthening project cycles and ensuring material availability to support our strong backlog. Acquired inventory from both Midway and Crabtree also contributed to the inventory build. Operating cash flow, adjusted for items related to the sale of our interiors business, was - $162 million in the quarter. Given the seasonal pattern of working capital needs in our business, we typically use cash in the first half of the year and generate cash in the second half of the year. We're pleased to report that our share buyback program is off to a good start as we executed on both open market purchases as well as an accelerated share repurchase program. We repurchased approximately $113 million of our common stock during the quarter. As a result, shares of common stock outstanding decreased to 68.7 million as of March 31, 2022 from 70.4 million as of December 31, 2021, a reduction of approximately 1.7 million shares. To wrap up, we're very excited about our performance in the first quarter. We have significant momentum as we enter the most important part of our year and are making progress on our Ambition 2025 plan. With that, I'll turn the call back to Julian for his closing remarks. Thanks, Frank. Before we turn the call over to Q&A, I want to briefly wrap up our first quarter and turn your attention to the remainder of 2022. Please reference page 12 of the slide materials. We expect end market demand to remain strong even as headwinds such as inflationary pressures, supply chain disruption, and labor and material shortages persist. Overall macro indicators are mixed, and we will keep a watchful eye on economic and geopolitical developments. Residential roofing demand and the residential exposed areas within our complementary products will continue to benefit from R&R and new construction market tailwinds. Regarding commercial roofing demand, the rising trend in activity we saw begin several quarters ago is expected to continue. The Architectural Billings Index and overall sentiment remains positive, and we enter the construction season with a strong backlog. April net sales per day are up around 25%. In our second quarter ending in June, we expect total sales growth to be up in the low 20% range year-over-year, reflecting the fact that the sales comparables get slightly more challenging as the quarter progresses. This guidance also reflects our recent acquisitions and the divestiture of our solar business. Gross margin will reflect our price increases across all product categories from the beginning of the year as well as anticipated inventory profits. Our emphasis remains on pricing execution and operating efficiency to offset inflation. Please remember that we will be lapping a prior year quarter, which had two price increases as well as the related timing benefit. We expect solid execution to result in a year-to-year gross margin percentage between 27% and 27.5%. Regarding the remainder of the year, we will continue to focus on sales and operational execution, product availability, and cost management, all areas within our control. We are increasing our full year 2022 sales growth expectations to approximately 20% versus calendar year 2021. We expect that sales growth and continued cost discipline will result in adjusted EBITDA in the range of $800 million-$850 million. We continue to believe that the constructive demand environment will continue and that supply chain challenges will ease through the year. We have a resilient business model and a leadership team capable of adjusting quickly to changes in the market. More broadly, our Ambition 2025 plan provides us with multiple paths to growth and margin expansion. Nondiscretionary R&R demand underpins our end markets and will continue to provide us a secular growth opportunity. I thank our more than 6,000 team members for their dedication, which allows our continued success. We are strategically and financially positioned for growth as we empower our customers to build more. With that, Selina, we'll open it up for questions. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star followed by one on your touchtone telephone. If your question has been answered or you wish to withdraw your question, press star two. Each caller is limited to one question. The first question comes from Ketan Mamtora with BMO Capital Markets. Please proceed. Thank you, and congrats on a strong start to 2022. I was just curious, as we think about your guidance for 2022, you know, I was just curious, what is contemplated, you know, sort of by way of, volume and price within your, you know, 20% revenue growth number? If you can break that down by segment, that would be helpful. Hey, Ketan, thanks. Appreciate the congratulatory remarks. On a full year basis, when you blend it across the entirety of the portfolio, you should think of something in the low single digit volume range. Obviously, the rest of it being price. If I looked at it on a LOB basis, and obviously shingles are only a component of resi, but we're really handicapping shingle volumes in the mid-single digit range. You'll see more of that in Q2 and Q3, given that that's the strongest selling season for us. When you look at non-res on a full year basis, that one's a little harder to handicap, given the supply chain issues. Right now, we're handicapping that one as flat overall, but some fairly significant swings by quarter based on the prior year comps. You might remember the Q2 comp was quite high and the Q3 comp was softer. As you model that out, just give that some thought. Then on the complementary, I'm just sort of using a broad brush here given the fact that there are a number of different items inside the complementary business, that's probably in the low single digit blended range there as well. That's very helpful. I'll jump back in the queue. Thank you. The next question comes from Mike Dahl with RBC Capital Markets. Please proceed. Hi, thanks for taking my question. Frank, just to follow up on the guide. You know, I'm probably missing something here, but when I put in the sales guide, put in the gross margin guide, it would seem to require quite a step up in SG&A to knock the EBITDA down to $800 million-$850 million. And that seems a little weird given how much leverage you should get operationally on the SG&A side, given the pricing dynamics. Can you just help bridge that a little bit more maybe? Yeah. Just for the gross margin guide, we did not guide gross margin for the year. We guided gross margin for the quarter. So that might be part of the math there. Okay. That's it. That would change things quite a bit, I'm sure. Yes. Okay. If I could ask a second one then. Non-res, the pricing dynamics, I mean, that's fairly robust being in the 40s% for the quarter, implied. So, could you elaborate a little more on what's driving that and how to think about that through the balance of the year? Yeah. Obviously, it is a big number. Right around 40% is probably a good place to see that on a blended basis. There's a number of different products in there. You know, I would chalk it up to a combination of the supply chain challenges that we have been all encountering on the non-res side, the price increases that are coming through from the manufacturers, and then demand. You know, demand has come back strong. Obviously, it was delayed versus the resi comeback from COVID, but the demand is healthy. You know, I think it's all of those things. Do I think that, you know, we'll continue to see 40s% across the board for the rest of the year? No. I think it will continue to be a, you know, an inflationary environment for us. Obviously, we begin to lap across all of the different lines of business. You've got to go back last year and think about the price increase timing last year across the various lines of business. That will obviously compress as we go forward throughout the year. Mike, I'll add a couple of things as well to that, Julian. It's you know, it's it is difficult to see forward in the commercial roofing supply chain. It's been a real challenge. It continues to be a challenge as the project construction timelines alter. We think we've seen some things pull forward into the quarter that has been delayed from last year. We think that there was a strong demand there. We believe that will continue. I think we'll continue to see some pricing momentum. Obviously, we don't bake in anything that has not been announced. We're cautious there. In terms of the SG&A growth, I mean, we've got a lot of inflation that runs not just through product cost, it's running through all areas of the business, fuel. You know, we wanna add investments to our business as we execute against Ambition 2025. We've got additional investments there that we're considering. We believe we're managing it very well. We certainly are looking to get leverage, but we also wanna make sure that we're investing for growth in the future as well. Got it. Okay. Thanks, Julian. Thanks, Frank. Thank you. The next question comes from Garik Shmois with Loop Capital. Please proceed. Oh, hi. Thanks. Obviously, congratulations on the quarter. I guess I'll follow up on the gross margin question, just recognizing that you didn't formally guide for the full year. You know, how should we think about some of the puts and takes? I think specific to the inventory costs, previously, you had warned us of about a 50-100 basis points drag for this year. I'm just curious if that still holds, or could that be pushed out a bit because of the pricing strength you've seen so far? Yeah, Garik, good question. If you remember from the Investor Day, we took the reported 2021 of 26.7%, and normalized it down to 25.8% as sort of reflective of the inventory profits that once we got done the year, we calculated at about 90 basis points. You know, to your good point, we won't see as much of that reduction given the fact that we are generating some inventory profits this year. I think we'll be above the 25.8%. With the mix differences year-over-year, I think it'd be hard to get up to that 26.7% number. You know, something on the middle to just slightly below middle on that one's probably a good number for the full year. Great. Thank you. The next question is from the line of Keith Hughes with Truist. Please proceed. On inventory. Thank you. Questions on inventory. I know it's up a good bit year-over-year. I know there's a lot of inflation there. Could you just talk about inventory of units, where you stand, particularly in residential roofing? Are you at a level you would like to be at, or are you still in kind of a deficit position? Yeah. Thanks, Keith. So yeah, inventory just aggregates 55% of the increases on the price side, obviously 45% on units. When you look at it on an LOB basis, on the resi side, it's about 2/3 volume, one-third price. Non-res, if you look at it on that one, and again, these are sort of broad proxies, given the fact that there's lots of different products in each one of these, about 40% up on dollars, and more price than units. But you know, there's a different story on insulation and single-ply. You know, it's in different places. Obviously, the ISO is really holding for the membrane to allow us to unlock it. There's a little bit of holding there in general on ISO and some other products there waiting for the job lot to be able to ship. When you look at complementary, you know, lumbers sort of all over the place, depending on what the spot market is doing. Let's talk about siding maybe. It's up about 47% in dollars and more price than volume. Your overall question about how we look on inventory, I mean, we've obviously built it in expectations that we're going to grow. Obviously, you see that in the numbers that we just talked about. We did, you know, buy ahead of the price increases. We know the OEMs are producing full tilt. You know, we were taking on more than we were selling, given the fact that it was not the most robust selling season, given the seasonality of our business. You know, January, February, March are not the highest output year or output quarter, you know, month for us. In terms of product inflation, like we see that continuing as Julian mentioned. I mentioned the commercial supply chain items. I mean, we're just having to hold inventory longer because, you know, that last product needs to come in for us to be able to unlock the, you know, the job lot. Then look, we're building. We acquired some inventory in the M&A. We, you know, built the couple of OTC hubs and opened those. We've got the greenfields that we opened. To me, all of that contributes to where we are on inventory. There are still places where inventory isn't where we want it to be. Where the demand's highest, the inventory is the most challenged. And where the demand is a little bit softer, the inventories are in good shape. We're gonna continue to buy in the places that we need them. We do think it is an advantage to us to make sure that we have the products that our customers need. Julian may have others to add, but. Kind of where we are, Julian. Thanks, Frank. Yeah, just to try and answer your question, around where you want to be, as Frank alluded to, there is a regionality to it today, and also across the various product lines. Overall, I'd say I was very pleased with where we finished up. I think that, you know, we were able to take advantage early in the year, build some inventory ahead of price increases, and that's gonna be very constructive for us going forward. Obviously, as I did say in my prepared remarks that we expected some of the supply chain challenges to ease through the year. We certainly expect that to predominate in the commercial roofing sector. We do think that will be easing up, and so as we go through the year, we'll start to think about how we manage that a little bit more tightly as the supply chain pressure eases and, you know, lead times get down to, you know, maybe not normal, but perhaps closer to normal. Okay. Great. Thank you. Thank you. The next question comes from Noah Merkousko with Stephens. Please proceed. Good evening, and thanks for taking my question. First, I think, Julian, you mentioned a few times in your prepared remarks that we're sort of in this reroofing cycle, if you look back at the last 20 years and see all the home building that was going on. I guess the question is, you know, what inning are we in in this cycle? Or maybe asked another way, how long can it last? I think you also mentioned a couple of times you're seeing a multiyear demand tailwind. Just any additional color there would be appreciated. Sure. Be happy to answer that one, Noah. Thanks for the question. Look, again, we estimate that a typical residential roof lasts about 20 years. Commercial roofs have a slightly different cycle, but give or take, they're in the same range, depending on the type of building. You know, we see that, as you said, being a multiyear. If you go back to, you know, the boom in residential markets, it really started to happen through 2000-2005, 2006. 2006 is where it started to come down. We still see a good trend in that direction and several more years of that growth. The other thing that we're seeing that is a positive, we think, for this trend is that, you know, insurance companies are now looking at homes when they transact, so existing sales and turnover, and more and more are saying that, you know, you have to get a new roof if the roof is over a certain age on the home before they will insure it. We're seeing a good number of positive trends that we think will positively influence the overall cycle in both residential roofing. Commercial has typically lagged the residential cycle by about 18 months. Commercial building owners, they're doing a lot more repair and maintenance on an ongoing basis on roofs as well, more so than the residential side. We continue to see that as an opportunity, and we think there's lots of room for growth. We also believe that there's plenty of opportunity in our space, even with a relatively flat market for us to continue to grow share and execute against our plan. We're excited about the growth opportunities that are ahead of us, not just from the market, but for the things that we control and we can drive forward as well. Okay. Thanks for the answer. I'll leave it there. Thank you. The next question comes from Truman Patterson with Wolfe Research. Please proceed. Hey, good afternoon, everyone, and thanks for taking my question. Just wanted to touch on the non-residential commercial roofing side a little bit more. You know, you're stating that, you know, the supply chain is still challenging, but you were able to grow volumes in the first quarter. I'm just hoping to understand, are you beginning to see any incremental improvement of the supply chain? And how should we think just how deep the strength is of your backlog in that segment? I'm really trying to understand. You know, I believe you gave flattish volume growth in this segment going forward. Just trying to understand if there's, you know, upside if the supply chain improves. Thanks for the question, Truman. It is difficult to see, so I understand the question. I think I've got the same question on a daily basis. What I think we saw in the quarter was a little bit. It was so difficult at the end of last year. The supply chain was really jammed up. Projects were really getting pushed out. We probably saw a little bit of catch-up from the demand that had been pushed out of last year in the first quarter. We had, you know, a not too bad weather quarter. Honestly, the commercial roofing contractors continued to work robustly through that period. So we think some of that had been pushed out probably picked up a little bit. Obviously, our inventory improved, which suggests that the supply chain is easing a little bit. We're able to get some of the materials that we need to ship those jobs. That's been important for us. We're leveraging our scale to really get the product in the door from all the vendors that we need to so that we can support our customer base. I do think that some of the challenges that we faced prior year, you'll remember the February freeze last year that completely jammed up the chemical industry in the U.S. that supported the commercial roofing manufacturers. That hasn't repeated obviously, so we're not gonna see that come through. I think that combined with, you know, strong operations on the manufacturing side that I do think has improved year over year, will lead to an overall improvement in the supply chain situation, that's gonna ease. The backlogs continue to grow, I think primarily because we do still have some supply chain challenges. You know, it's a little bit of the pig going through the snake here. But I think that overall, as I said in my prepared remarks, we're seeing it easing. We feel we're in an advantageous inventory position. It's still about labor and production and other materials that go into- Mm. Completing a commercial roofing job is not just about commercial roofing, it's about all the other elements of getting the building closed. We're not just dependent on our materials, we're dependent on some other materials in the supply chain that we don't touch, but that affect the overall schedule of production of a building. Overall, we think it's easing. We feel we're in a good position, but we do continue to see a solid backdrop of demand. Truman, from a couple of quick data points, I guess, on the backlog. We're up 20% sequentially, and up about 3x what we were a year ago. As you know, that's been growing fairly consistently here for the last four or five quarters. And about 60% of that overall backlog is in the non-res space. As you look at volumes throughout the year on non-res, as I mentioned, I think in an answer to an earlier question, the second quarter 2021 volume comp is the strongest in the last four years, and the only reason I say four years is 'cause I only went back four years. I mean that's sort of post-Allied for us. Really heavy comparable on both the single-ply and the ISO for us in that quarter. If you pulled that one out, obviously you'd see a different volume growth story. Okay. Perfect. Thank you. Thank you. The next question comes from David Manthey with Baird. Please proceed. Thank you. Yeah, good afternoon. Given that growing above market is one of the goals of Ambition 2025, I'm wondering from a management standpoint, what systems do you have in place to ensure that your branches maintain price discipline at the point when supply and demand reach equilibrium? Julian, you were talking about supply chains getting better. I mean, at some point they will, clearly. When that happens, how do you maintain price discipline at the branch level? Thanks for the question, David. I mean, I think that, you know, this is something that we've focused on certainly since I came in. I had a lot of experience in that space. We've hired people to the company with a lot of experience in that space, and we've also building out a new pricing model that we've talked about that we think will benefit us over time. We do provide guidance to the branches. We have a lot of management systems in place around that. We have daily measurements to see not just at an overall company level, but branch by branch, how we're doing. We can measure that at a branch level on a daily basis. We can look at price cost on those things. We've got a number of management systems that we can follow. Obviously, the pricing dynamic over the last couple of years has been incredibly important in driving our results. I think one of the other management systems we have in place is the incentive compensation put in place, and it's been. I think everyone's learned just how valuable it is from the standpoint of managing that price cost relationship and making sure that it's well and balanced. I think the experience we've brought into the company in terms of price management and systems that we're investing in to provide better visibility, as well as the incentive compensation schemes that we've put in place to ensure that we're managing this on a daily basis and everyone benefits from good management around this. As you say, rightly, we do wanna grow. We don't think that's independent of good management of the business. We'll obviously be balancing price volume on an ongoing basis no matter what. There are lots of ways that we believe that we can grow above market that aren't just related to you know sort of price management. We do think that whether it's greenfields which have we've got an air pocket and we're gonna invest in whether it's the M&A component then we can bring specialized skills to help those companies that we acquire grow more than they had done in the past as well as specialized services digital platform all of those things that we can do that are differentiators we believe will help us drive growth as well. That's good. Thank you. Thank you. The next question comes from Michael Rehaut with JPMorgan. Please proceed. Hi, good afternoon. Doug Wardlaw on for Mike. You just mentioned M&A, and just regarding it, how should we think about M&A over the next 12-24 months? You know, what type of opportunities are you evaluating in terms of size and number of targets? Thanks for the question. I'd refer you back to the statements we made at our Investor Day. We said that we anticipate somewhere in the region of $1 billion of revenue to come from M&A over the next several years and in our Ambition 2025 plan. Our ideal targets are between $50 million and $250 million of sales. Quite frankly, you know, we're in the market for the companies that are a great fit for us. The ones that we've done most recently have been single branch locations that put a dot on the map where we think there's opportunity to grow. We can bring them unique capabilities that we have, integrate them into our OTCs and leverage that strength. We see a good pipeline. We think that it continues to be focused on our core markets, and we've described that as our residential roofing, commercial roofing, and the complementary products that serve the overlap of those customers. That's where we're focused. You know, we think there's a good pipeline that we're involved with right now. Awesome. Thank you. Thank you. The next question comes from Deepa Raghavan with Wells Fargo. Please proceed. Hi, good evening, everyone. Thanks for taking my question. My question is on Q2 revenue growth guide of low 20s%. How does that split across segments? You have pretty tough comps and complementary. Right Like you also called out, non-res also has some tough comps there. Yeah, thanks, Deepa. Yeah, the low 20s%, if you look at it in the aggregate, think low single-digit volume in the res price. I think on the shingle volume side, you know, sort of in the mid-singles there's gonna be some regional strength, obviously, where the sun shines the most. And then there's some acquisitions that we have already brought on, which will add a little bit on the res side. I think on the non-res side, you're gonna continue to see the pricing that was referenced earlier in the call. Even though the volumes are going to be healthy volumes, I did mention the prior comp last year, which means that we should be probably down in volume, but the pricing will remain strong there. I think on the complementary side, if you again, it's a lot of different product categories in there. If you just look at siding as a good proxy, it'll probably be in the low to mid-single digits on a volume basis there with the rest price. Continued strength on price across the board, and then the volume commentary that I just mentioned. That's great. Thanks very much. If I can squeeze just one more in. Can you give us an estimate of how much inflation you're really baking into your full-year EBITDA outlooks and how much price is in there in terms of dollars? I mean, these are substantial numbers, I'd assume. Yeah. I mean, you'll have to do the math, but you know, when we look at the full year guide of about 20% net sales up year-over-year, as I think I might have mentioned earlier, you've got low single-digit volumes in the rest price, so you can see what that accounts for. Obviously the inventory piece is gonna be impacted by inflation as well, as we continue to see the product costs go up and we have the net cost catch up with the replacement cost. We did not factor in any future price increases as Julian mentioned. We'll have to, you know, be responsive to those as if and when those come out. as Julian also mentioned, and I think I mentioned in my prepared remarks as well, there's inflation on the OpEx line, as well, whether it's, you know, fuel or labor, you know, any of the fleet aspect of things, insurance, real estate, real estate taxes. Like everything seems to be going up right now. We have baked all of that into our guide, both the things that help us and the things that don't. We think we're, you know, gonna be able to manage that quite well this year. You know, when you look at the sales guide and imply, you know, what I mentioned earlier on gross margin and maybe a little bit of progress on the leverage on the OpEx line, you get to a pretty good spot in that $800 million-$850 million that Julian mentioned. Thanks for the color. I'll pass it on. Good luck. Thank you. The next question comes from Ryan Merkel with William Blair. Please proceed. Hey, guys. I had a question on COVID and just the impact to your business. Clearly pricing has helped margins quite a bit, but what's less clear to me is how investment in the home, you know, might have boosted residential reroofing. I realize that, you know, shingle volumes are flat here, but when you look at the shipment data, you know, the shipments are up quite a bit the last couple years. The question is, could there be a sales hangover in 2023 from pull forward or if the consumer is spending money elsewhere outside the house? Thanks for the question, Ryan. So I'll pass that in terms of what I think has happened over the last 10, 15 years. I mean, since the sort of housing crash that began in 2006, 2007, obviously led to the Great Recession, there's been substantial under-investment in housing in general. I mean, you know, as you think about how people might react, so many people went underwater at that time that the investment in housing seemed to be just not the place to wanna put your money. I mean, I think that was inevitable. I mean, there was all this talk for probably the last 10 years about how everyone was gonna live in a condo downtown close to work and was never gonna travel anywhere, and the single-family home in the suburbs with a white picket fence had just gone out of style. I think COVID just changed that. I think people realized that, you know, for our entire history, not just as a nation, but as a species, we've wanted to live in single-family dwellings, and I think that the aberration has been the last 10 years, where the massive under-investment in single-family dwellings occurred. I just think that COVID has made people reassess that again and say, "You know, I do aspire to sort of live as a single-family unit with my kids. I do want somewhere where I can actually get out of the house and, no pun intended, breathe. I think it's just a revert to normal. I think that we've got, while it's a slow growth, you've got a growing population, you've got household growth. We're just returning to a more normal situation, and I think it's creates a positive momentum for us. I do think, as I mentioned earlier, you've got some other trends that are impacting demand, particularly on the residential side, with this idea that insurance companies say that, you know, we're not gonna insure a house on a transaction if you haven't got a new roof, 'cause the roof's over 12 years old. You know, we're seeing more of that behavior, in which case, that spurs demand. As houses turn over, we're probably getting more of them today getting re-roofed than you have in the last 10, 15 years. Combined with the re-roof cycle, combined with these other trends that are suggesting that you know, there's that you need to replace a roof, if you get a new house, 'cause that's what the insurance companies are saying. I think we've got a great backdrop for the residential market for the next several years. Makes sense. Thanks, Julian. Thank you. The next question comes from Phil Ng with Jefferies. Please proceed. Hey, guys, congrats on a excellent quarter. I guess question for Frank. You know, had some questions around the working capital. The inventory build makes sense, just given where inflation is, but receivables increased quite a bit as well, just given the, you know, solid demand backdrop. Can you kinda walk us through some of that noise? Then I think in terms of your full year guidance, Frank, I think you called out mid-single digit volume growth for resi. How much of that is tied to M&A versus organic? The reason I ask, you're obviously lapping tougher comps, and you had some weaker storm carryover demand as well. Yeah. Thanks, Phil. Appreciate the shout-out. In terms of AR, you know, it's up about $250 year-over-year, about $150 quarter-over-quarter. Higher sales obviously are a big driver of that one. The other thing that's happening, given the mix shift that we've seen in favor of non-res recently, probably a couple of days' worth of DSO, given that the terms on non-res receivables are generally longer. A lot of those deals have kind of a pay-when-paid type of a clause, and we've talked a lot about lengthening project cycles and things of that nature. I would see it as just the inflation in the sales as relating to inflation in the AR and then that mix shift in terms of the higher proportion of the AR being you know non-res. Give me your second question one more time. Your guidance for a full year, you're calling for mid-single digit growth for resi. How much of that is M&A? The reason why I ask is, there is weaker storm demand coming through, so it just seems like a pretty healthy growth backdrop with that environment. Yeah. The M&A that's in there is only what we have announced, so you've got obviously Midway and Crabtree and then Wichita Falls, which we just announced earlier in the week. It's not a huge number there, just given the magnitude of those businesses that we acquired. I wouldn't handicap it as being all M&A by any stretch. To answer your question, I did the dollars on an overall basis, and when you net out the divestiture last year of solar, and I know this is not an answer to your resi question, but more broadly, and you add in the M&A that's already been announced, it's about a 1% move in revenue, so + 1% that we get from the net acquisitions. Okay. Thank you. I'd also emphasize that it's still early in the year in terms of storm activity. We're still saying that it's, you know, we think it'll be about average. I know it's been a little bit light in the first half of the year, but last year it would have been heavier, and it was light by the end of the year. We're still forecasting about that average in our guide. Now, if it's lower, we'll be at the low end of the guide. If it's higher, it'll be at the higher end of the guide. Gotcha. Helpful. Thank you. The next question comes from Stanley Elliott with Stifel. Please proceed. Hey, everybody. Thank you guys for squeezing me in. Quick question on the private label business, you know, big numbers. Are you seeing better uptake right now with the residential customer or your commercial customers? Are you also seeing more reorder activity in the private brand products, or is some of this momentum that you're seeing a result of some of the supply chain issues? Thanks for the question. I'll start with the risk. I don't think there are supply chain issues. We do think that we get favorable treatment because of our private label position in terms of supply. We think that's very important to our manufacturers to partners in this to keep us supplied. That's very important in this environment. Look, I think broadly speaking, it's across the board. You know, we do have customers who, you know, like the private branded product. You know, it's a high quality product. They get used to using it. It fits obviously with our sales model. We're certainly incenting our people to position that with the customers, and we'll certainly take advantage of the sales when they come. I mean, you know, the penetration is substantial in those categories. The categories where we have private labels, we do very, very well. You know, we'd like to add additional categories as we go forward, but it's a great opportunity for us. We see it in residential, in the commercial roofing business and in the complementary business, and we think there's more room to grow, as we indicated in our Ambition 2025 plan, that we intend to grow to at least a billion-dollar business over the next several years. Great, guys. Thanks for the time. Congratulations and best of luck. Thank you. Thank you. That concludes the questions. Now I would like to turn the call back over to Mr. Francis for his closing remarks. Thank you, Selina, and thank you everyone for joining us this evening. Obviously, we're thrilled with the start to the year. We're excited about the opportunities. We're excited about our Ambition 2025 plan, and if you're celebrating Cinco de Mayo tonight, please make sure you drive home carefully. Thanks, everyone. That concludes the Beacon first quarter 2022 earnings call. Thank you for your participation. You may now disconnect your line.