Good afternoon, ladies and gentlemen. Welcome to the Beacon fourth quarter and full year 2022 earnings conference call. My name is Daniel and I will be your coordinator for today. At this time, all participants are in listen only mode. We will be conducting a Q&A session towards the end of this call. At that time, I will give you instruction on how to ask questions. 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 is being recorded for replay purposes. 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, Daniel. Good afternoon, everybody, and thank you for taking the time to join us on our call today. Julian Francis, Beacon's Chief Executive Officer, and Frank Lonegro, our Chief Financial Officer, will begin with prepared remarks that will follow the slide deck posted to our investor relations section of Beacon's website. We will open the call for questions. Before we begin, please reference slide two for a couple of brief reminders. First, this call will contain forward-looking statements about the company's plans and objectives and future performance. Forward-looking statements can be identified because they do not relate strictly to historic or current facts and use words such as anticipate, estimate, expect, believe, and other words of similar meaning. 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. Second, the forward-looking statements contained in this call are based on information as of today, February 23, 2023. Except as required by law, the company undertakes no obligation to update or revise any of these forward-looking statements. This call will contain references to certain non-GAAP measures. The reconciliation of these non-GAAP measures to the most comparable GAAP measures 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 at becn.com. Finally, I just want to remind everyone again that we have changed our fiscal year-end to coincide with the calendar year-end. As a result, today we're reporting our calendar year 2022 result as our fiscal year, as well as the result of our fiscal Q4, which is comparable to our transition period in the prior year period. Now, let's begin with opening remarks from Julian. Thanks, Binit, good afternoon, everyone. Let's begin on slide 4. I'm very pleased to report that we finished the year with another outstanding quarter. The team delivered Q4 records for net sales, net income, and adjusted EBITDA. Sales today were up 14% year-over-year as pricing execution drove higher net sales across all three lines of business, despite volume being lower by mid-single digits. While we did see progressively weaker demand through the Q4, pricing held up and remained stable sequentially. Residential volumes were lower as compared to a strong prior year, and markets exposed to higher volume of new residential construction did slow more sharply. I remind you that 80% of our sales come from repair and replacement activity. Non-residential demand remained solid despite destocking at the contractor level and commercial roofing supply chain problems eased with lead times on the majority of products returning to more normal levels. This helped us to unlock more of the backlog that has built up over the past two years. We delivered higher than expected gross margin and recorded our 12th straight quarter of year-over-year increase in adjusted EBITDA, continuing our track record of profitable growth. We also delivered our best quarterly cash flow since the Q2 of 2020 as we focused on rightsizing our inventory and getting to jobs that had been delayed due to supply chain problems, as we said we would on both our second and third quarter calls. We used the cash generated in the quarter to invest in value creating initiatives towards achieving our Ambition 2025 targets while maintaining steady net debt leverage, preserving our balance sheet flexibility. During the Q4, we made two acquisitions, Coastal Construction Products and Whitney Building Products. Whitney is a distributor of commercial and multi-family waterproofing and restoration products located in Boston, Massachusetts. We discussed the acquisition of Coastal on our November earnings call. We welcome the Whitney and Coastal teams and their customers to Beacon. We also accelerated our Greenfield investments, expanding our branch footprint and enhancing service to our customers. Our dedicated Greenfield team is executing at a very high level, which we will highlight later in our remarks. Our share buyback program continues to be an important part of our balanced capital allocation approach, demonstrating our commitment to creating shareholder value and confidence in our Ambition 2025 strategic plan. You may recall that the buybacks are part of a $500 million share repurchase authorization announced at the Investor Day, of which we have completed more than 75% in 2022. In the Q4, we made significant progress towards our goals, and we will continue to invest to generate profitable growth and returns for our shareholders, make meaningful contributions to the communities in which we operate, and build more for our customers and our employees, so that they too can fulfill their potential. Please turn to page five. For those of you who have listened to our calls or attended our investor day, you know that we have a detailed strategy called Ambition 2025. It is a structured growth roadmap with initiatives that are targeted and measurable. The goals we laid out are to grow the business to more than $9 billion in sales by 2025, an 8% compound annual growth rate from our 2021 baseline, and to deliver EBITDA of about $1 billion in 2025, approximately a 10% annual growth rate. On page six, I'll provide a brief update on our strategic initiatives, which will give you insight on how we are achieving our plan. Let me first highlight a couple of ways that we are building a winning culture. As you may recall, we announced a year ago that we have a goal to reduce the intensity of our Scope 1 and 2 greenhouse gas emissions by 50% by the year 2030. I'm pleased to report that we have begun to take steps on this journey by piloting the use of electric vehicles in three areas of our operations. First, two electric delivery cranes, which eliminate job site idling, reduce fuel usage and noise pollution, are deployed in a small number of markets. Second, we are testing electric forklifts in our warehouse. And third, we are using electric vans for express customer deliveries in California markets. Collectively, these initiatives demonstrate our commitment to leverage available technology to build a more sustainable future for all stakeholders. I'd also like to highlight how we have enhanced our capabilities and diversity at the board level with the recent additions of Melanie Hart and Racquel Mason. Melanie has a wealth of distribution industry experience, having spent 16 years with Pool Corp, as well as financial and operational expertise that will no doubt be valuable as we progress towards our Ambition 2025 financial targets. Racquel's depth of management and marketing experience with some of the world's most iconic brands like Coca-Cola, as well as her work architecting cross-enterprise digital transformation, will benefit us as we drive growth and value for our customers. We welcome Melanie and Racquel and look forward to their contributions to our company. We are also driving above-market growth and enhancing margins through a set of targeted initiatives. Expanding our footprint is a major lever in our growth plans, which includes strategic investments in greenfields and tuck-in acquisitions. Our success in ramping up our dedicated greenfield team and accelerating investments in our pipeline is paying off. We added 12 greenfields during the Q4 of the year in key growth markets, improving efficiency and enhancing customer service. This brought our total for the year to 16 locations. As a reminder, our original Ambition 2025 target was to add 10 facilities to our footprint each year, including 2022. As mentioned previously, our dedicated M&A team also completed two acquisitions in the quarter, adding 19 branches, with the majority of locations being in the rapidly growing Southeast markets. Our set of initiatives designed to grow margins is also gaining momentum. Our digital capability continues to be a clear competitive differentiator for Beacon. Sales on our online platform increase customer loyalty, generate larger basket size, and deliver approximately 150 basis points of gross margin enhancement compared to offline channels. We are confident that we provide the most complete digital offering and continue to expand our capabilities to serve customers wherever and whenever they need. The same time, we are building upon our technology leadership by continuing to invest in making it easier for customers to do business with us anywhere and any time. The actions include our recent digital integration with AccuLynx and the launch of our new Beacon PRO+ mobile app, are examples of how we are extending our leadership position. Through our continued investment, we achieved 26% digital sales growth year-over-year, with nearly 19% of residential sales now going through our digital platform. As we have discussed for several quarters, we are driving operational excellence through our continuous improvement and productivity initiatives. Our focus on the bottom quintile branches has consistently generated significant improvements to our service levels, as well as tangible contribution at both the sales and EBITDA lines. Our process is designed to improve the performance of these branches, and the structure is simple and repeatable. We diagnose the root cause of the problem and ensure that branch managers at these locations are properly supported to remedy the issues. This initiative continues to deliver tangible bottom-line results and contributed approximately $4 million to the EBITDA line at the Q4 year-on-year. One area where there was more opportunity for us in the quarter was branch productivity. As volumes softened month-over-month, we could have worked more quickly to adjust our capacity to more appropriately match supply and demand. Lastly, our strategic initiatives are designed to create shareholder value. We are committed to continuing to improve our returns for all owners of our stock. During the Q4, we completed our second accelerated share repurchase program, retiring an additional 1.1 million shares. The share repurchases demonstrate both our commitment to delivering value to shareholders and our confidence in the future. As you can see, we have multiple paths to growth and margin expansion through the cycle. We have a differentiated approach and have built the tools needed to achieve our Ambition 2025 targets. Let me pass the call over to Frank to provide a deeper focus on our Q4 results. Thanks, Julian, and good evening, everyone. Turning to slide eight, let me start by reminding everyone that we had one less day in the quarter versus the prior year quarter. We achieved nearly $2 billion in total net sales in the Q4, up more than 14% on a per-day basis year-over-year as higher average selling prices for our products drove sales growth in all three lines of business. In the aggregate, price contributed approximately 17%-18% to revenue growth. Our backlog conversion was a highlight in the quarter, and while it remained elevated compared to pre-pandemic levels, it continued to come down from its peak in the Q2 and continues to be weighted toward non-residential orders. Acquisitions, including Midway Wholesale and Coastal Construction Products, are performing well and more than offset the divestiture of our solar business on December 1st, 2021. As a reminder, the results of the solar business are reflected in our prior year numbers as part of continuing operations. Strong year-over-year pricing drove residential roofing sales per day higher by approximately 7%. I also want to highlight that the average selling price was stable sequentially from the Q3 to the Q4. As mentioned earlier, weakness in demand from our single-family home-building customers caused shingle volumes to be lower by high single digits year-over-year. Please keep in mind that the prior year comparable was a strong volume quarter, largely attributable to the late onset of winter, allowing for additional roofing days last year. Non-residential roofing sales per day were up 27%, driven by price execution. Single-ply volumes per day were higher year-over-year as the non-res supply chain began to normalize during the quarter. Destocking at the contractor level and tight material availability of certain accessories continued to impact project cycle times, resulting in lower overall non-res volumes, down about 4%-5% year-over-year. Complementary sales per day increased 16% year-over-year, with higher selling prices across all of our complementary product lines, with the exception of lumber. Sales increased in our siding products and our recent Coastal acquisition is performing well. Coastal, which closed on November 1st, 2022, contributed two months of revenue, driving sales of our waterproofing products higher year-over-year. Please keep in mind that with the addition of Coastal, our complementary product category now has approximately 70% residential and 30% non-residential exposure. Turning to slide nine, we'll review gross margin and operating expense. Gross margin was 26.2% in the Q4, exceeding the guidance we put out in November. Price cost was slightly favorable as higher average selling prices more than offset product inflation year-over-year. Higher non-residential sales mix also contributed to the 10 basis point decline year-over-year. Adjusted OpEx was $364 million, an increase of $58 million compared to the prior year quarter. OpEx as a percentage of sales increased to 18.5% or 100 basis points year-over-year. The year-over-year change in OpEx was driven by inflationary pressures in areas including wages and benefits, insurance, fleet and fuel, and travel and entertainment, as well as lease-related expenses such as rents and real estate taxes, utilities, and maintenance costs. In addition, with persistent tightness in the labor markets, we continue to err on the side of ensuring we have the resources necessary to deliver for our customers. Variable expenses related to higher sales and profitability, including commissions, incentive compensation, and stock-based compensation, also contributed to the increase. Recently acquired branches and greenfields opened in the last 12 months accounted for approximately $13 million of the year-over-year increase. Although we continue to be ready to adjust to changing market conditions and respond to the impact of higher interest rates on our business, we remain focused on investing in initiatives through the cycle to drive above-market growth and margin enhancement as part of Ambition 2025. We are continuing to invest in projects related to our sales organization, customer experience initiative, pricing tools, e-commerce, and branch optimization. These and other Ambition 2025 investments totaled approximately $11 million within the operating expense line in the third quarter. Q4. Turning to slide 10, operating cash flow in the Q4 was strong at $320 million, our highest cash generation since the Q2 of 2020. This follows a tremendous cash quarter in the Q3, resulting in nearly $600 million in cash generation in the back half of the year. As you can see on the chart, this is attributable in part to the reduction in net inventory as we return to a more normal seasonal pattern. On a year-over-year basis, Q4 inventory was higher by approximately $160 million, driven by product cost inflation. Inventory from acquisitions and greenfield load-ins also contributed to the increase. We continue to balance our capital allocation between organic and inorganic growth opportunities and shareholder returns. As Julian mentioned, our ability to invest in greenfields and value-creating acquisitions is underpinned by our ample balance sheet capacity. We are investing higher amounts in our business, deploying more than $90 million in capital expenditures in 2022. This not only included the investments in greenfields but also the upgrading of our fleet and facilities, as well as building out the technology tools that will benefit us in 2023 and beyond. As of the end of the Q4, our net debt leverage was at the low end of the 2x-3x range outlined at Investor Day, and we retained liquidity of more than $1 billion. Turning to shareholder returns, we completed the second accelerated share repurchase program in the Q4, which resulted in the retirement of slightly more than one million additional shares. Net of share issuance for stock-based compensation, we reduced our common shares outstanding to 64.2 million at December 31st, 2022, versus 70.4 million at the same time last year. We exhausted just over 75% of the $500 million buyback authorization we announced in February of last year. In summary, we continue to have ample capacity to invest in opportunities through the cycle, an active acquisition pipeline, and a significant jump-start toward achieving our Ambition 2025 goals. We are confident in our ability to successfully compete in and react to changing market conditions and look forward to a successful start to the year. I will turn the call back to Julian for his closing remarks. Thanks, Frank. Please turn to page 12 of the slide materials. Before we move to our outlook, I'd like to take a minute to reflect on the impressive results of 2022 and the progress we have made towards the Ambition 2025 targets we conveyed one year ago. In 2022, we produced sales growth of 24% with higher revenue across all three of our lines of business. We delivered $910 million in adjusted EBITDA and our second consecutive calendar year of double-digit EBITDA margins. We delivered record sales in our national accounts, private label, and digital initiatives, which deliver both enhanced growth and margin. We generated $36 million in additional adjusted EBITDA from our bottom quintile branch initiative, nearly half of our $75 million Ambition 2025 target in our first year. We welcomed five new acquisitions, adding 22 branches, new markets, and capabilities. We opened 16 greenfields across 12 states, enhancing our service to our customers. We filled several key leadership positions within our sales force, lines of business, and leadership ranks, while at the same time advancing our diversity, equity, and inclusion initiatives. We repurchased and retired 6.8 million shares, representing more than three-quarters of the 500 million share repurchase authorization announced at the Investor Day last year. In summary, our performance in 2022 has created significant value for our customers and shareholders and positioned us to deliver on our Ambition 2025 targets. Turn to page 13. Before we head to Q&A, I'd like to provide our 2023 market expectations, much of which remain consistent with our remarks from November. Market demand will very likely be lower this year, especially in new residential construction. We do not expect to see the broad-based inflation in products or labor markets as we have experienced over the last two years. We have been preparing for these market changes for several months and will of course, continue to monitor market conditions and take appropriate actions. We expect aggregate demand to remain above pre-pandemic levels, indicating a healthy end market, supported by non-discretionary repair and replacement activity, as well as storm-related demand in parts of Florida, California, and the Midwest. For the Q1, we expect total sales growth to be approximately 5% year-over-year or around 3.5% on a sales per day basis. This is somewhat less than the 5.5% growth per day that we saw in January, largely due to the lapping of a late January shingle price increase in the same period last year. Our Q1 guide reflects the continued weakness in single-family new construction and a strong shingle comparison in the prior year quarter. We expect softness in our commercial roofing shipments, mainly resulting from continued destocking at the contractor level rather than a step down in construction activity. With respect to gross margin, we expect to be in the 25.5% range, which is down relative to the record prior year quarter, which had significant inventory profits. Before we talk about the full year, let me take a minute to give you our base case assumptions that will underpin the guidance. As mentioned, we expect rising interest rates to bring softness in the regions that have higher exposure to new residential construction. Although I would like to note that sentiment has significantly improved recently, and the majority of the air pocket in home builder demand should be felt in the H1 of the year. With respect to the residential reroofing end market, we expect very good demand as compared to historical levels, supported in part from storm demand and the reroof cycle. Regarding commercial roofing, we are closely monitoring the Architectural Billing Index, which is down from last year's highs, but has seen steady improvement since November. We also see a shift from new construction to repair and reroofing activity as the year progresses. With the addition of Coastal Construction Products and Whitney Building Products, we will also leverage the enhanced offering within complementary products to help us grow above market. For the full year, we expect net sales growth in the range of 2%-4%. This includes contributions from acquisitions previously announced. Regarding gross margin, inventory profit roll-off will more than offset the structural improvements from our initiatives, including higher private label and digital sales. With all that in mind, we expect adjusted EBITDA between $810 million-$870 million in 2023. We continue to expect inventory to follow a more normal pattern of seasonality as material availability continues to improve. We expect this to contribute to higher cash flow conversion compared to 2022. The difference between our low and high end of the range will largely but depend on storm volumes and the extent to which the downturn in new construction persists. More importantly, our focus will continue to be on the areas within our control, including enhancing our customer experience, delivering operational excellence, pricing, and daily execution on safety, service and efficiency. We will continue to invest in initiatives that we expect will result in accelerated growth with acquisitions and at least 15 additional greenfield locations. We're investing in improving our operations, delivering results today, but also getting ready for the future. Last, but certainly not least, we continue to be committed to generating returns for our shareholders and are announcing an increase in our existing stock repurchase plan. The new approval from our Board is in the amount of $500 million, inclusive of the remaining $112 million outstanding authorization at the end of the Q4 of 2022. In summary, our business model is resilient, and we are positioned to outperform the market in this dynamic demand environment, creating value for all our stakeholders. We are looking forward to the rest of 2023, and as always, helping our customers build more. With that, I'd like to open the lines for questions. Ladies and gentlemen, if you wish to ask a question, please press star followed by one on your touch tone telephone. If your question has been answered or you wish to withdraw your question, please press star followed by one. Each caller is limited to one question. The first question comes from the line of Kathryn Thompson of Thompson Research Group. Please proceed. Hey, thank you for taking my question today. Just a clarification on what you said in your prepared commentary and how it also bakes into your outlook. You'd indicated that you had seen an improvement of trends. If you could just flush that out a little bit more in terms of what is, you know, what are the factors that are driving this observation? Against that backdrop, you do have inventories are up year-over-year about 13%. How much of that is volume versus price? Where do you think we are right now in light of the current balance of supply and demand with your inventory journey? Thanks very much. Thanks, Kathryn. There was a lot wrapped up in the question. I think that the first part of it was related to the trends that we're seeing in the marketplace, and our sort of belief in our optimism. Look, obviously, we said that we believe that volumes will be down year-over-year. We think that, as we indicated in prior calls as well, that that is primarily related to new residential construction that we think will be down double-digits plus. We do think the reroof market on the residential side will be down mid-single-digits, give or take. Commercial, we still believe that we're gonna see about a flat market. We are anticipating we've had lower levels of storm over the past couple of years, and we're expecting that. The way we're forecasting it is to return to the 10-year average. We see a little bit of lift in that. Obviously with the, with the storms we saw in Florida at the end of last year, the weather that we've seen in California over the winter, and sort of continuation of some of the storms that hit the Midwest, the Upper Midwest last year. We expect all of those markets to be relatively stronger. Obviously, the sentiment coming out of the first, you know, first month of the year, I think there was a lot of commentary about the builder show being, you know, both much more positive. Certainly our contacts in the builders, in the building community are much more positive than they were perhaps two months or three months ago. We're seeing that trend come through. Well, I would say we're not seeing that in the business today. It's still obviously down, but it is also February. I think overall what we're also seeing is execution on our initiatives. You know, we're seeing the traction that we expected to see that we got from the plans that we announced and the actions that we've been taking. We're seeing great results. We're seeing, you know, terrific results from the acquisitions. We were terrifically pleased to add 12 greenfields in the Q4. You know, I don't know that we can keep up that torrid pace for a whole year. I'm not sure that would be the right answer either. You know, those are going to contribute more this year than they did last year, and we're gonna add additional greenfields this year. We've got lifts from those activities as well. You know, overall, I feel like we're executing very, very well. I think that we're seeing the customers respond to the improved service levels we're delivering on. Overall, it's a healthy market. I mean the overall levels of market demand, while down from the last year, two years, you know, there's high levels relative to pre-pandemic, and we think they're a constructive market. I'll let Frank weigh in on inventory levels, but overall, we're pretty positive. Yeah. Hey, Kathryn. You're right, it's up $160 million year-over-year. When you break that down, about $200 million is inflation, about $40 million-$50 million is M&A and greenfields. You're looking at at least $80 million from lower units if you just look at it Q4 ending year-over-year. In terms of the forward view, obviously we're balancing a couple of different things. We wanna make sure we have the products available for our customers. We also want to improve our turns in 2023 relative to where we were in the last couple of years. Supply chains are normalizing. They're not normalized, they are normalizing, we wanna take advantage of the lower lead times. I would expect us to continue to right-size inventory, maybe not as much in Q1, just given the lower sales level, but you should continue to expect us to, you know, to get a little bit better on inventory as we progress to the midpoint of the year, obviously assuming we get a decent sales season in the spring. Thank you. The next question comes from Michael Dahl of RBC. Please proceed. Hi. Thanks for taking my question. A lot in here. I guess just to follow up, Julian, that was helpful, the additional color on the end markets. I mean, correct me if I'm wrong, but it sounds like you're planning then for a volume environment that's down maybe mid to high single digits on a blended basis. You're guiding the sales growth of 2%-4%, acquisitions adding a few percent. I guess the delta has to be some combination of price mix and the greenfield contributions. Maybe can you help walk us through your expectations for price mix contribution, if you could, by segment? Then if you could maybe help us just ballpark all these greenfields, you know, what the cumulative contribution is expected to be this year. You're right, there is a lot in that. I'll touch on it in general. I know, Frank will have a little bit more detail for you and. You know, I think as we think about the greenfields, to start there, you know, we see the sales begin on day one. We had a ramp that was built into our forecast that sort of led to stable, normalized business after three years to five years. I think in the last 12 months or so with this greenfields ramping up in the demand environment that we've seen, we probably had a little bit of a quicker ramp in many of these branches than we anticipated. They've been more productive sooner than we're anticipating, for sure. Obviously the demand environment, the pricing environment has been positive to that as well. We would expect to see that roll-off. As we said, we continue to see a good demand environment. I mean, if you look back historically, you know, this type of market would've been productive for both price and volume. What we're expecting to see, you know, sort of relatively sideways movement on most of the, most of the business. Volumes will be down. We'll have price carryover, in all segments of our business, in all the lines of business. That will give us a little bit of a lift as well with that price carryover. Obviously, that it will come mostly in the Q1 and the H1, will ease off given how pricing shaped up last year. You know, the one area I think that I can elaborate a little bit more on might be in the commercial roofing segment. I mean, one of the things that we saw there, and we've emphasized this a few times now, is that as the supply chain really locked up, froze up during the pandemic, there was a shift to the new construction market and away from the reroofing market, which just didn't get done, quite frankly. There was a lot of backlog that built in the reroof side. We expect to see that reroof unlock now in a more normal environment with the volumes coming through, with the supply chain sort of unfreezing. That will allow us to unlock a lot of the backlog. We believe that that's gonna be a constructive environment. The dip, as we said, we follow the Architectural Billing Index. The dip in that, down off the highs in the middle of last year and the year before, we think a lot of that work just didn't get done. What we've seen over the last, you know, 90 days, 120 days in that segment of the market in the ABI, is really a reflection of things starting to just get backed up. That air pocket that was in that is actually being filled by work that didn't get done. We see a pretty constructive environment. You know, we're not seeing dramatic changes in inflation, in the manufacturer base. We're not seeing a lot of inflation come through in their raw materials, but neither are we seeing an enormous amount of deflation come through there. I don't think the manufacturers have got a lot of incentive to sort of try to move some things, and the demand levels remain, like I said, pretty constructive. Yeah. Hey, Mike, I'll try to unpack a little bit more for you. In terms of the market, take this as a proxy for, volumes to the point you were making. It's probably on a next storm basis, something in the down mid to high single digits. RESI's probably more toward the upper end of that. Commercial's, relatively flat, as Julian mentioned, and then complementary is obviously a blend in that 70/30, that 70/30 that we mentioned in the prepared remarks, probably down in the mid-range. Once you start from there, then we start to build a bit. You know, the storm planning assumption that we have is the 10-year average, that adds, you know, 2% or 3% there. You've got Ian, you've got the hailstorms in the Midwest from last year, and then the California rainstorm. We're expecting some lift there. Relative price stability is certainly helpful. The Ambition 2025 initiatives, which would include the Greenfield initiative, the customer experience, the sales workforce improvements and additions that we're doing, you know, probably add something in the mid-singles range there. Order of magnitude for the Greenfields, in an absolute sense, we were at about $35 million in Q4. If you looked at that on a year-over-year basis, 'cause we did have a few Greenfields in the prior year, was about $30. We're gonna begin to lap some of those later in the year given the pace of Greenfields openings that we did this year. Coastal and some of the smaller acquisitions that we did in 2022 should add about 2% or 3%. We'll get 10 months worth of Coastal that performed quite well for us in Q4. You put all that together, and you're looking at that 2%-4% revenue growth that we mentioned in the prepared remarks. Remember, we are gonna continue to be acquisitive. Future acquisitions in 2023 are not part of this guide. Not understanding exactly when the timing, the magnitude of those will be, it's hard to bake those in. Just know that those are not in there at present. Thank you. The next question comes from the line of Ryan Merkel with William Blair. Please proceed. Hey, guys. What is your outlook for gross margin in 2023? What is your estimate for price cost? Thanks. Hey, Ryan. I'd say mid-20s on gross margin, down obviously about 100 basis points. About 100 basis points against last year. The big driver there is inventory profits. I mean, we're gonna roll off something around 130 basis points, and most of that's gonna be in your price cost. It's not that the selling price is impacted. It's just that the costs catch up finally, given all the manufacturer increases last year. That's gonna be partially offset by a couple of different things, the structural improvements that we are making in the bottom quintile branches, digital private label, et cetera, and some accretion from the acquisitions. you know, Coastal is a margin-accretive acquisition for us. We likely will have, especially in the H2 of the year, higher commercial mix impact as well. You roll all that through, and you're going to see the inventory profit roll-off, show up largely in price cost. Thank you. The next question comes from Garik Shmois with Loop Capital. Please proceed. Hi. Thanks for having me on. I'm just wondering how to think about operating expenses in 2023 given all the puts and takes. I mean, in the overall, I think I would put it if you looked at an OpEx-to-sales ratio, Garik, I think it's somewhere in that 17% to 17.5% range. As Julian mentioned, we're gonna continue to, you know, focus hard on productivity. If, you know, if and when volumes, you know, go one way or another, we're gonna have to variabilize with those. We're resetting the bonus to targets. Inflation is still in the business on the cost side, so we've got a lot to stomach there. I read off a litany of things in the prepared remarks. Those are gonna be the same inflationary items as we go forward into next year. We did say and believe strongly that we need to continue to invest through the cycle. You're gonna see us invest in Ambition 2025 initiatives, so the Greenfields, the sales and sales support teams, the M&A teams, the service capabilities that we're creating, branch optimization, OTC, I mean, all the things that you've heard us talk about, we're gonna continue to invest in those. If volumes take a dramatic step down, obviously that we'll pull out the old COVID playbook and work from that. We don't see that happening in 2023, managing them, but also investing is gonna be the important thing for us to do. Yeah. As a part of our Ambition 2025 plan, you know, we'd committed to OpEx levels of productivity to get us there. You know, it is something that we're focused on, but we remain confident that we can deliver against that plan and that sort of level of spending relative to relative to sales. Thank you. The next question comes from Truman Patterson of Wolfe Research. Please proceed. Hey, good afternoon, guys. Thanks for taking my question. Wanted to discuss the bottom quintile branch performance. I think EBITDA benefit was $36 million in 2022. Is that purely on kind of the relative improvement versus other branches? How are you all thinking about, you know, the potential there in 2023, improvement to your bottom line? Hey, Truman. good call out on the VQBs. Yeah, $36 million, and again, on the backs of, I think $50 million or more last year and, $25 million in 2020. That initiative continues to bear fruit on an annual basis. That is the year-over-year change in bottom-line dollars, profitability dollars, of that same set of branches in the prior year versus that same set of branches in the current year. It is true bottom-line improvement, from that group of the bottom quintile branches. You know, if you unpack that a little bit, the EBITDA margin improvement was over 200 basis points in those branches. We did a really nice job of driving that. It is both on the gross margin percentage line as well as on the OpEx leverage line, probably a little bit more on the OpEx side in those set of branches in 2022. Interestingly, the sales growth in those branches on a full year basis was higher than the company average. Those branches really did a nice job. We still think there's a ton of opportunity there. There's hundreds of basis points difference between the bottom quintile and what we call the performing branches, so the other 80% of the branches. We still think there's a lot of fruit there. Thank you. The next question comes from the line of Philip Ng with Jefferies. Please proceed. Hey, guys. Congrats on another strong quarter, on great execution. Julian, you mentioned that, you're seeing some destocking at the contractor level on the commercial side. Can you expand on kinda where you guys are in that process, seeing any other areas where you're seeing destocking? Certainly on the commercial side, the reason why I ask is 'cause pricing's been so explosive. Any concerns that you can see some degradation there this year? Yeah. It's a great question, Philip. You know, the visibility in contractor inventories, which is, you know, first of all, not something that I would have been saying three years ago, it's just an unusual situation that they would be taking in inventory and managing. That's, I just think that emphasizes how different this environment has been. We believe that the Q1 this year, you'll see a good deal of destocking there. I don't think the contractors particularly wanna hold that. The information that we have suggests that they took out short-term leases on, you know, warehouse locations in order to stock it. They're stocking at job sites, which has risk to it as well. We think this will be a relatively short-lived phenomenon. We should be through it, hopefully, certainly by, I think, the middle of the year, we would expect to see the majority of that get worked through. It is something that, you know, we're not, it's not been typical to see. I do wanna emphasize, there was a good deal of destocking in Q4, both at the contractor level and at the distributor level. I think that's reflected in the manufacturer shipment data that you saw. Again, you know, your question related to the pricing. I mean, pricing was pretty stable year-over-year, and sequentially. The other thing is that we're seeing is that, as I keep emphasizing, the end markets are pretty solid. We expect a pretty good year, in both the commercial markets and the residential markets. We think there'll be a little bit of a move away from new construction to repair and replacement, in both of those markets. I think that on the commercial side, particularly, that usually benefits us in that a lot more goes through our warehouses as we fulfill replacement roofs as opposed to some of the direct ship that goes to new. We believe we saw a shift there. Like I said, I think it's been positive. You're right, there has been explosive growth in the pricing in the commercial arena. So far, we've seen a relatively constructive market. I think that the fact that there is a bunch of inventory out there creates some incentive to make sure that you don't see degradation in that level of pricing. Overall, and I, you know, look, things can change, but we believe today that we're seeing a pretty constructive market with good end use demand and, you know, generally a positive environment. Thank you. The next question comes from Keith Hughes of Truist. Please proceed. Thank you. You talked on the, on the Q1 guidance about the level of OpEx, which looks up a good bit year-over-year, similar to the fourth. Can you talk about what's driving that up? Do those, any of those costs abate to get to this, mid-17 number you're talking about as the year goes along? Hey, Keith. Yeah, I think if you go back and look at the prepared remarks on Q4, you're gonna see pretty much the exact same set of factors in Q1. As Julian and I both mentioned in our remarks, you know, holding on to employees in what is still a very persistent labor market, especially in the trucking and warehouse and helper and, you know, all the folks who deliver for us every single day. I mean, that job market is still tight, and we don't wanna put ourselves in a situation where we make a short-sighted decision in the winter and end up coming out in the spring and not having enough folks to handle the demand that we would expect on a kind of a normal spring, you know, construction season basis. Maybe one data point that might be helpful. In the implication of about $40 million year-over-year, about half of that's gonna be the payroll and benefit side, and half of that's gonna be from M&A. Don't forget about the fact that we've got M&A in greenfield, et cetera, that are gonna continue to add to the OpEx line. We will begin to cycle some of those investments as we go throughout the year. Obviously, you know, we're not gonna run a 20 or 21 leverage throughout the year in order to get down to, you know, that 17- 17.5 that I mentioned in response to your earlier question. Thank you. The next question comes from the line of Trey Grooms of Stephens. Please proceed. Hey, good afternoon. Julian and Frank, you know, you mentioned on the, on the guide there, new RES down double-digit plus, I think I heard that right, which makes sense. RES reroofing down, I think it was high single digits, give or take. You know, given the highly non-discretionary nature of reroofing and, you know, some storm-related demand you talked about, is this pullback in reroofing in 23 more of a function of, you know, some pull forward of demand over the last few years, or are you, are you starting to see homeowners, you know, start to try to delay some of these repairs or replacement projects, you know, given the uncertainty and, you know, higher cost to borrow? You know, if you could just help us understand, you know, kind of some of those drivers on the weaker reroof portion of the business. Yeah, look, I think that the last couple of years have been, you know, pretty unique in terms of what we've seen with people being literally forced to stay at home. I think there's been a little bit of work that got done there that was perhaps more discretionary than nondiscretionary. The nondiscretionary portion of it is nondiscretionary. We would continue to see that. The storm-related demand is, we do think that is up. That's in our guide. As you said, we always go back to the 10-year average there. That is a little bit of a lift. I don't know that we're seeing consumers pull back, I think was the word that you used. Inevitably, higher rates when a lot of roofs are refinanced is going to have an impact at the margin. I think that we see that. The other thing that you would typically see is part of the reroof demand is created by the turnover in housing. As houses change hands, that's when you do the inspection. The inspection comes back and says, "Yeah, the roof's old, you should do that." Obviously there is a little bit of jam up in that market as, you know, you don't wanna leave your 3% mortgage home and go get one right now because you're gonna pay 6%, so that crimps you. We think we're gonna see a little bit of lower turnover in the housing stock, and that will lead to slightly lower level of demand as reroof gets done on turnover. That's really it. I don't see that as consumer pullback and saying, "I was gonna do a roof, I'm not gonna do it now because I'm frightened of something." It's more related to housing stock turnover and the ability then of the homeowners to get the house inspected and to drive that. That's where I think this forecast is really coming from, and hopefully, that's helpful. Thank you. The next question comes from the line of David MacGregor of Longbow Research. Please proceed. Yeah, good afternoon, everybody. Julian, congratulations on all the progress. It's really remarkable what you've accomplished here in the last two years. I guess I wanted to ask you about price discipline. You know, Beacon's obviously demonstrated over the past two years the positive impact of being disciplined on pricing. At the same time, we all realize that in a more challenging volume environment, promotional programs are gonna become more pervasive. How do you balance the need for price discipline in a slower macro with the need to maintain or grow your market share? Yeah, it's a great question. I think it comes back again to. Look, we actually think demand's pretty good. If we were looking at this demand environment coming from a 135 ARMA number and the ABI index from lower coming up, we'd be talking completely differently about it. The. I think that what we see is that, you know, the reality of the marketplace is that, you know, when you get that type of price competition is when people are like, "You know, I can't cover my fixed costs, and I'm worried about this. The manufacturers are making moves." I mean, I don't think you've got that environment. The overall demand levels are pretty good. Yeah, they're down, but that is still higher than it was pre-pandemic. I think other than 2017, which was a big storm year, you know, I think we're all in a frame of mind that this is probably going to be as good a year as we've had in the last 15, other than maybe 2017 and the last two or so. I do think that we've got a little bit of a sort of distorted perspective on what's going on in the market. I think it's a constructive environment. I think that it's not we're starving for volume and we need to cover fixed costs. I don't think that we're facing that. I don't think any of the manufacturers are facing that. I think the environment is probably more supportive than I think people are managing, given that we're talking about double-digit declines in new housing. Now we're watching it carefully. Obviously, the run-up in pricing has been incredibly supportive. Also remember, this is inflation that ran through raw materials as well. It's, yes, we've enhanced our margins. I think the manufacturers have probably enhanced theirs as well. We're not talking so far out of sort of historical norms that it's just inevitable that it's gonna come back down. I still continue to believe that it's going to be, you know, there's going to be a sense that this is a sustainable market. Our costs are up. I think that a lot of what we've seen, particularly at Beacon in the last two to three years, the inflation has masked the improvement that we've done, our self-help initiatives. You know, like I said, I'm not gonna look into the crystal ball and say it'll never happen, but, the environment just doesn't seem to me to be conducive to destructive actions in the marketplace right now. One other point maybe is just what we did on inventory. I mean, we took a very constructive view on inventory in the middle of 2022, realized that things were likely going to soften up as the Fed engaged in its pace of rate increases. As you can see, we methodically worked that down over the past couple of quarters, and I think have it in a much better place than it was in the middle of the year in 2022. That framework and that methodology that we used, I think was very constructive to where things are from a pricing perspective. Yeah. We saw destocking throughout the Q4, not just in us. You know, volumes were down, manufacturer shipments were down, and prices were stable sequentially. I think that's, you know, an element of that is a proof point of what we continue to believe the markets, the market will bear. Thank you. The next question comes from Ketan Mamtora of BMO. Please proceed. Thank you, and congratulations on a strong 2022. I just want to ask, sort of where you are seeing the most M&A opportunity within your portfolio, and how do you think about it in the context of sort of balance sheet leverage, given at least the economic environment is looking uncertain? Thanks for the question, Ketan. It's, it's an interesting one. Look, I think that the opportunities are manifold across all segments of our business. I think the acquisition of Coastal was a little bit of a game changer in the sort of waterproofing and the repair markets for those product lines. I think that has sort of increased the opportunities we have in that space. Obviously, shortly after that, we completed another acquisition in that area of our business. We're seeing the opportunities there perhaps ramp up a little bit. Obviously, we've had several terrific years in all of our markets, I think it's, you know, as we start to think about what the future holds, you know, we believe there's gonna be M&A opportunity in a, in a lot of different areas, I think in the segments. Obviously, we committed to being disciplined. We're very conscious of our trading multiple and the commitment that we made to ensure that we were at synergized levels. We could, we could get acquisitions done at reasonable cost. We're gonna remain disciplined. You know, we believe that, you know, we're still a great buy in this, in this marketplace, and we've got a share buyback program now that is enhanced. Our capital, our capital allocation approach is flexible. If we don't see the opportunity to do what we believe is significant accretive M&A, we've got the option to toggle more towards share buybacks, and we think that's the right approach. It's really across everything. I would say that, the acquisition we made in the waterproofing space has probably opened up a little bit of our aperture there. Yeah. Hey, Ketan. I think on the M&A side, you should just know that as we have said in prior quarters, we have a very active pipeline and are, you know, involved in a number of both bilateral as well as process-oriented conversations with potential sellers. Your leverage question, just like we said at Investor Day, we are gonna be very disciplined in terms of capital allocation. We are gonna still stay well within the 2x-3x range. You know, we're at 2.0 coming out of the prior year. We've got a strong cash generation year ahead of us in 2023. We feel like we have some deployable capital, and as Julian mentioned, we'll toggle back and forth between, you know, M&A and buybacks just depending on the availability and the timeframe. Thank you. The next question comes from Stanley Elliott of Stifel. Please proceed. Thanks. Hello, everybody. Thanks for the question. Can you talk a little bit about kind of what's happening with national accounts? My math if my math is right, I mean, you're basically at the $1 billion number, you know, almost right now. You know, some of that is, you know, with the move into Coastal and the water remediation piece, you know, what sort of, having more of a national footprint is helping that? Really just anything curious do you have on the national accounts. Thanks. Sure. you know, look, our national accounts business has been terrific. They're executing very well. I think that the value proposition that we bring as a national supplier is being recognized by those accounts. You're right. We set out a billion-dollar number, and they're broadly at $1 billion. Obviously, we're going to push them to raise their numbers so that we can continue that growth. We do think that it is an area where our competitive advantages that we articulated at Investor Day around the scale advantages that we have, the network model, where our branches act as a market, as a team in a market, and our ability to make sure we can serve customers market to market, that is a tremendous advantage to National Account type customers. The investments that we make in, you know, private label, digital, these are things that the National Account customers value greatly. I think that, you know, that has been a tremendous success. Obviously, inflation has also played a big part in that growth. You know, that I won't, I won't discount that. It's not been all volume related, but we're very pleased. Inside of that, I would tell you that the large home builder segment is a part of our national accounts team, so we're watching that very carefully. Obviously, we've seen it down in terms of volume. The more positive sentiment start of the year has been good news. Again, we believe we provide tremendous value. In terms of the waterproofing segment of the business, post-Coastal, you know, we were very thoughtful in going into this. As we thought about our portfolio, a couple of years ago, obviously, we divested interiors, we divested the solar business. We were very conscious about keeping our existing waterproofing business that we had primarily on the West Coast. We believe this was a great segment for us to invest in. We thought the market's dynamics were going to be pro-growth. We did not see any other players on a national basis. We thought we had the opportunity to build the nation's leading waterproofing specialty distributor. The overlap with the roofing business is high. There's a lot of back and forth on that. The Coastal acquisition has opened our aperture, and I think we believe that there's probably more opportunity now than we thought going in. It's a terrific team. It's a very technical sale. It's a highly specified sale. You know, that tends to lead to, you know, good repeat business. Given, like you said, the trends, you know, climate related moves, certainly the tragedy in Florida with the collapse of the condo building that was related to waterproofing, all of these, we believe, point to a segment of the market that we'll see enhanced growth over the next several years. We believe now that we're the leading player in the market. Thank you. Our final question comes from Michael Rehaut with JPMorgan. Please proceed. Hi, guys. Doug Gordon on for Mike. I'm just wondering, regarding your 2023 EBITDA guidance, how much contribution are you assuming from Ambition 2025, particularly as it relates to lower quintile performance, the digital initiatives and private label? If you can just add a little bit of color around those three points. Yeah. I think the easiest way to dimensionalize it for you is to just think through the revenue element of things, then you can imply a fairly standard EBITDA margin to it. If you think about greenfields, OSRs, the customer experience initiative, things that are excluding M&A, you're probably in that 4%-5% revenue growth range. Then you think about M&A that we've already done, how that carries over into the year 2023 would be in that 2%-3% range. I think if you took that and dimensionalize that into dollars then implied your sort of average contribution to the bottom line, you'd get to a pretty good number. Thank you. With that, we will conclude our Q&A portion of today's call. I would now like to pass the conference back over to the management team for closing remarks. Thank you, Daniel. I appreciate all of the questions today and all of you attending it. I do wanna reflect on what was a really terrific 2022. You know, market conditions were obviously helpful, but the execution that our team demonstrated, I think was really outstanding and delivered results that I think were, you know, well beyond what was anticipated 12 months ago. We're certainly excited, and I wanna offer my sincere thanks to all of our 7,000 + team members for a really outstanding 2022. Thanks to you all on the call for your interest in Beacon, we wish you the best in this year. With that, we will conclude today's conference call. Thank you for participating. You may now disconnect your line.