Good afternoon, ladies and gentlemen, welcome to the Beacon Second Quarter 2023 earnings call. My name is Sam, and I'll be your coordinator for today. At this time, all participants are in listen-only mode. We'll be conducting a question and answer session towards the end of this call. At that time, I'll 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. 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, Sam. 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 the Investor Relations section of Beacon's website. After that, 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 historical or current facts and use the 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 2022 Form 10-K. Second, the forward-looking statements contained in this call are based on information as of today, August 3rd, 2023, 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 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. Now, let's begin with opening remarks from Julian. Thanks, Binit. Good afternoon, everyone. I'm pleased to say that we delivered another good quarter with strong execution on key initiatives and disciplined cost management. Before I begin our review of the quarter, let me remind you of the assumptions that underpinned our prior outlook. We said that the overall residential market would be down mid- to high-single digits, with new down double digits and replacement activity down mid-single on lower existing home sales. We said storm demand would be a tailwind on a return to the 10-year average, significantly above prior year. We expected the non-residential end market would be about flat, but volumes would be affected in the first half by contractor destocking, and we expected price stability. In the first half of the year, end market demand has largely performed as we outlined, with the residential market slightly exceeding our expectations on stronger-than-expected storm demand. While we believe the non-residential end market is broadly flat, excess contractor inventory was significantly higher than anticipated, which created first half headwinds that we believe are now largely, but not completely behind us. Against this backdrop, we continue to focus on the areas within our control and our team's strong execution on our Ambition 2025 initiatives resulted in record second quarter net sales. Average selling prices were up low single digits year-over-year, and combined with contributions from greenfields and acquisitions, drove net sales more than 6% higher year-over-year. We once again delivered double-digit adjusted EBITDA margins in the second quarter through a combination of disciplined market execution and productivity gains, and we generated substantial cash flow in the quarter. Having the right products in the right place, in the right quantity to meet customer needs is a core competence. At the same time, balancing inventory to local demand conditions is critical to ensure we manage working capital and create value for our shareholders. As we saw market conditions change in the middle of last year, we began to proactively and methodically reduce inventory, unlocking substantial cash flow. We converted operating cash flow at over 100% of adjusted EBITDA in the trailing 12 months ended June 30th, demonstrating the resiliency of our business model in changing market conditions. We used that cash flow to create balance sheet capacity to reinvest in the business, conduct M&A, and return capital to shareholders, which I will discuss in more detail on the following slide. As I said at the outset, I'm pleased with the team's execution in what turned out to be a pivotal few months for the company. Now, please turn to page five of the deck. As you are aware, 18 months ago, we laid out our medium-range targets to drive above-market growth, deliver double-digit adjusted EBITDA margins, build a great organization, and generate superior shareholder returns. We can only do this if we deliver a great value proposition to our customers, and our teams are doing that every day. Let me provide you with an update on our strategic initiatives, which will give you a better idea of how we are accomplishing these goals. Let me start by highlighting how we are building a winning culture. In May, we released our second annual Corporate Social Responsibility Report, consistent with our values and our commitment to transparency and continuous improvement. We reported early progress on our goal to reduce Scope 1 and Scope 2 GHG emissions intensity 50% by 2030, relative to our base year of 2020. We are focusing on our fleet and facilities to improve fuel efficiency and reduce energy consumption. I'm pleased to share that we reduced our emissions intensity by 5.7% in 2022 relative to the 2020 base. We also announced an Employee Stock Purchase program so that our employees can be further invested in the success of the company they work for every day. This benefit allows team members to buy our shares at a discount and is available to all employees, including drivers, branch personnel, sales, and functional roles. We are aligning the entire company to our mission and to creating shareholder value. In fact, more than 20% of our employees, including more than 10% of our frontline workforce, enrolled in the inaugural period and are taking advantage of this opportunity. I'm particularly pleased that hundreds of our drivers, warehouse team, and inside sales organization are participating. A real commitment to our company and to their teammates. Next, we are driving growth above market and enhancing market margins through a set of targeted initiatives. Our digital capability continues to be a clear competitive differentiator for Beacon, and sales through our online platform deliver approximately 150 basis points better margin compared to offline channels. We provide the most complete digital offering in the industry and continue to expand our capabilities to serve customers in the way that brings them the most value. Our most recent digital integration with AccuLynx, a leading provider of all-in-one business management software for roofing contractors, drove an impressive 28% year-over-year increase in digital sales in the second quarter, and the highest percentage of residential sales ever at 21%. We intend to build upon our leadership by continuing to invest in this capability. Last quarter, we highlighted the rollout of our customer experience, or as we call it, our CX initiative. Engaging with our customers during their most important moments and leveraging our strategic advantages to solve their most pressing needs, is one of the pillars of our competitive differentiation. We continued to roll out these best practices to six new markets in the second quarter. I'm happy to report that one of our key metrics of customer satisfaction, average on-time delivery percentage, is showing a meaningful increase in CX markets, sustainably improving our reliability relative to our past and to our competitors. We are also seeing tangible improvements in other key metrics, including sales growth and customer wallet share. Customers have told us they are willing to reward a better service experience, and we are building our capabilities, leveraging our competitive advantages of scale and our network model. Expanding our customer reach is also a major lever in our growth plans, which include investments in greenfields and acquisitions. Our dedicated greenfield team is executing on a robust pipeline. We added 14 greenfields through the second quarter, improving efficiency and further enhancing customer service. For reference, we have now opened 31 new branches since the beginning of last year, well on pace to exceed our Ambition 2025 goal. On acquisitions, we completed the purchase of Silver State Building Materials during the second quarter, providing access to the market in Reno and Lake Tahoe. In total, we have acquired nine companies, adding 30 branches since announcing our Ambition 2025 plan, expanding our opportunity in markets across the country. Those of you who've listened to our calls know that we have discussed our efforts to drive operational excellence through our continuous improvement initiatives. Our OTC network leverages the density of our branch network in larger MSAs. Currently, we operate in 57 markets with nearly 280 branches participating, where our teams work together to deliver on our service model to address our customers' needs. Key to achieving these improvements is our routing software, Beacon Track, enhancing the speed and reliability of our network and providing delivery tracking capabilities for our customers. In addition, we leverage logistic capabilities across our network of branches to reduce delivery time and mileage, improve labor productivity, and reduce fleet costs and emissions. We continue to execute on the strategic branch optimization initiative that we highlighted at our Investor Day and are developing a comprehensive standard methodology. We utilize value stream mapping for truck and order flows, leading to optimized processes and branch layout, which increases productivity and reduces wait times. The benefits are tangible, improving throughput, capacity, and sales per hour worked. Finally, I will talk about how we are creating shareholder value and give you some details on the transaction completed last week to repurchase the entirety of the outstanding preferred shares owned by CD&R. We knew that the opportunity would eventually present itself and have been preparing for it by restoring our balance sheet flexibility and maintaining strong liquidity. We recently saw the opportunity to reach out to our largest shareholder and were able to reach an agreement in early July to redeem the shares for just over $800 million, retiring the equivalent of 9.7 million common shares. In addition, we continue to execute on our current authorization to repurchase our common stock. Year- to- date, through July 31st, we repurchased approximately $100 million, or approximately 1.5 million shares. Many of you will recall that we first announced our share repurchase program in February of 2021 as part of our Ambition 2025 plan. I'm very pleased to report that we have since deployed $1.3 billion to repurchase approximately 21% of the shares on an as-converted basis, while maintaining net debt leverage within our stated target range. As a result of this significant return of capital, we have announced that we do not expect additional repurchases during the rest of the year under the remaining authorization. We remain confident that 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. Now I'll pass the call over to Frank to provide a deeper focus on our second quarter results. Thanks, Julian, and good evening, everyone. Turning to slide seven, we achieved more than $2.5 billion in total net sales in the second quarter, up a little more than 6% year-over-year, driven by the combined impact of acquisitions and higher average selling prices for our products. In the aggregate, price contributed approximately 2%-3% to revenue growth, while organic volumes per day were flat to down 1%. Acquisitions, including Coastal Construction Products, are performing well and contributed approximately 4% to daily net sales year-over-year. Our backlog continued to convert in the quarter as we entered the heart of the selling season, and while lower sequentially, remains well above historical levels. Residential roofing sales per day were higher by 8.5%. Higher year-over-year volume growth in the mid-single-digit range, combined with higher prices in the low single-digit range, drove the year-over-year revenue performance. Resi volumes came in better than expected versus a very strong shingle comparable in the prior year quarter. While industry volumes were higher, it is important to keep in mind that ARMA shipments were aided by distributor restocking during the quarter. With that in mind, we estimate that we grew at least in line with the market. As Julian mentioned previously, resi R&R demand, bolstered by higher storm demand in the first half, was stronger than our planning assumptions and more than offset new construction decline year-over-year. Non-residential roofing sales declined by less than 2% on a per-day basis, driven by lower shipments as the expected destocking by our customers continued through the quarter. Higher prices in the mid-single digits year- over- year, partially offset the lower volumes. Complementary sales per day increased nearly 12% year- over- year as the acquisition of Coastal drove higher sales of our waterproofing products year- over- year. Higher selling products, excuse me, higher selling prices across all of our complementary product lines, with the exception of lumber, also contributed to the growth. As a reminder, with the addition of Coastal, our complementary product category now has approximately 70% residential and 30% non-residential exposure. Turning to slide eight, we'll review gross margin and operating expense. Gross margin was 25.4% in the second quarter, down more than 200 basis points year- over- year, given we are cycling the significant inventory profits generated in the year ago quarter. That said, our gross margin performance in the quarter remains well above historical Q2 gross margin levels. While we were within guidance range we discussed in May, we ended up at the lower end of that range due to slower realization of the May shingle price increase, which largely matched the timing of the inflow of higher product costs. Therefore, we did not produce the level of inventory profits we were initially expecting. On a year-over-year basis, price cost was unfavorable by approximately 230 basis points, as higher average selling prices were more than offset by higher product costs year-over-year. You will recall that we had broad-based inflation across our products in the year ago period, including a sizable shingle price increase in April of 2022, which led to significant inventory profits at a high watermark for gross margin in Q2 of 2022. Adjusted OpEx was $378 million, an increase of $8 million compared to the year-ago quarter. Adjusted OpEx, as a percentage of sales, decreased to 15.1%, or 60 basis points of leverage improvement versus the prior year quarter. The year-over-year change in adjusted OpEx was driven primarily by expenses associated with acquired and greenfield branches. Together, these new branches accounted for approximately $24 million of the year-over-year increase. Inflationary pressures in wages and benefits, as well as lease-related rents, real estate taxes, utilities, and maintenance costs also contributed to the increase. These combined increases were partially offset by lower incentive compensation accruals and decreases in selling expenses, largely fuel related. Given the continued tightness in the labor markets, we made an effort to ensure that we were properly staffed to meet the ramp in seasonal activity and provide the high level of service our customers expect. At the same time, our focus on branch productivity remains a priority, and we were able to drive productivity and operating leverage in the second quarter. As you can see, our sales per hour metric reached its highest level index back to the first quarter of 2020, and notably, our operating expense to sales ratio reached its lowest level in 10 years, a testament to our team's focus on driving growth and delivering operating efficiency. While we remain watchful of changing market conditions, we are continuing to invest in initiatives through the cycle to drive above-market growth and margin enhancement as part of Ambition 2025. These Ambition 2025 investments totaled approximately $6 million within the operating expense line in the second quarter. Turning to slide nine, operating cash flow was impressive for the second quarter at $257 million, as we continued to benefit from the inventory rightsizing we started mid last year. You can see on the charts, we experienced the normal seasonal ramp in inventory between the first and second quarters. On a year-over-year basis, second quarter net inventory was lower by nearly $200 million, even with the combined impact of higher product costs year-over-year, inventory acquired through M&A, and new inventory to support our greenfield branches. It is also worth noting that we have generated nearly $950 million in operating cash flow over the last four quarters, a conversion rate of over 100% compared to adjusted EBITDA. We expect strong cash generation in the second half of the year, weighted toward the fourth quarter, given the inventory build in late Q2 and early Q3 to support the stronger selling season. While Julian previously covered the share repurchase program, let me give you some additional details that may be helpful. Share repurchases in the second quarter were made through a Rule 10b5-1 plan and resulted in the retirement of approximately 800,000 shares during the second quarter. Net of share issuances for stock-based compensation, we reduced our common shares outstanding to 63.4 million on June 30th versus 64.2 million at December 31st. The 10b5-1 plan terminated on July 31st, with approximately $25 million of share repurchases during July, and we have mentioned several times, we do not expect any further share repurchases for the remainder of the year. Net debt leverage at the end of the second quarter was 1.9 times trailing 12 months adjusted EBITDA, or slightly below the low end of the 2-3 times target range, and approximately 2.8 times after giving pro forma effect to the preferred repurchase transaction. We remain well positioned to continue to invest in greenfields and acquisitions, as well as upgrading our fleet and facilities to support our customers and employees. We are also investing in the processes and technologies that will lay the groundwork for improved service, future growth, and branch productivity. We remain confident in our ability to successfully leverage an improving residential backdrop and continue to capitalize on growth opportunities in the second half of the year. With that, I'll turn the call back to Julian for his closing remarks. Thanks, Frank. Please reference page 11 of the slide materials. Before we head to Q&A, I'd like to update you on our outlook for the remainder of 2023. We expect the momentum we experienced in the first half and outlined at the beginning of this call to continue into the third quarter. Non-discretionary R&R demand is expected to continue to improve, including carryover from the storm activity we have experienced in the first half of the year. Residential home builder demand is expected to be stronger in the second half, year-over-year, as builder sentiment has improved. Non-residential bidding and quoting activity and backlog is expected to remain healthy, but cycle times continue to extend. While we believe contractors destocking is largely over, some pockets of excess inventory remain, and we do expect the market opportunity to be lower year-on-year on a tough comparable. For the third quarter, we expect sales per day growth to be approximately 7%-9% year-over-year and slightly better than the July pacing of approximately 7%. Keep in mind that the third quarter of 2022 is a strong comparable in which we reported net sales growth of approximately 29%. We have announced a shingle price increase effective next week, corresponding to the manufacturers' announcements. Our team will execute with discipline and rigor, as we have in the past. Given the market developments that we are seeing through July, we expect that realization will be better than the May price increase and will result in sequential margin improvement. We expect gross margin to be in the mid to high 25% range, and keep in mind that the prior year quarter had significant inventory profits. We are also increasing our full- year guidance. We now expect net sales growth to be in the 4%-6% range versus 2%-4% previously announced. This includes contributions from acquisitions previously announced. Regarding gross margin, we continue to expect inventory profit roll-off on a year-over-year basis, partially offset by our improvement initiatives, including higher private label and digital sales. Adjusted EBITDA is expected to be between $850 million and $890 million for the full year 2023, an increase compared to our guidance announced at our pre-release on July 7th. As always, our focus will continue to be on the areas within our control, including safety, customer experience, labor productivity, and pricing execution. We will continue to deploy capital on initiatives that we expect will result in accelerated growth, including executing on our robust pipeline of acquisitions and delivering on our greenfield locations, which we now expect to result in more than 20-25 branches in 2023. We are investing in improving our operations, delivering results today, and investing to generate growth tomorrow. In summary, we're well positioned to continue to outperform the market in this dynamic demand environment, creating value for all our stakeholders. We're looking forward to the rest of 2023 and helping our customers to build more. With that, 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 touch-tone telephone. If your question has been answered or you wish to withdraw your question, please press star followed by two. Each caller is limited to one question. Our first question is from Garik Shmois from Loop Capital. Garik, your line is now open. Please go ahead. Oh, hi. Thanks, thanks for having me on. Nice quarter. I was hoping you could speak to the drivers of the new guidance range. You had narrowed the range about three weeks ago, now you're raising it. I'm just, you know, wondering if you can itemize some of the drivers. Is it just assuming the August price increase, is there some volume in there, or just if there's any additional detail would be great. Hey, thanks, Garik. Yeah, I mean, as we said on our pre-release on July 7, you know, we, we hadn't done the analytics yet in terms of where we were, and we, we weren't really closed on the June numbers. We've been able to do additional analytics on this and, you know, obviously, we're raising it somewhat. We broadened it out. We certainly broadened the top line, the top of the range out as well, and I'll let Frank Lonegro give you some specific details. You know, we continue to see a productive marketplace ahead of us, and we think we're executing well. As we said in our prepared remarks, we do think that the environment is more conducive to a solid price increase and execution this time. Yeah. Hey, Garik. As I think I've mentioned, you know, we really weren't able to engage the full complement of the team, both in the headquarters environment and the field environment, while we were getting, you know, getting ready for the preferred transaction and the pre-release. That's why we put the qualifiers in the, in the pre-release. Wanted to make sure people knew that we were gonna come out with a more refined range. I would say the, the conversations that we have had internally around the resi backdrop, and obviously that translates into to better resi volumes in the second half than maybe we were anticipating, as well as the August price increase. I'd say those are the, the two big things. I'll tell you, we also did a really nice job in the second quarter on OpEx leverage, and would expect that to continue to be helpful for us as we go forward. I think it really comes down to the, you know, the June close, the July. We obviously got another couple of weeks under our belt on July after the pre-release. That, that looked good, and then you forecast all of that forward and you get a little bit of lift. We're excited about the second half. Okay. Thank you. Our next question comes from Joe Ahlersmeyer from Deutsche Bank. Joe, your line is now open. Please go ahead. Yeah, thanks very much. Wanted to talk about the comments around the lack of inventory profits in the second quarter, and then just the expectation that with better realization in 3Q, you would perhaps see sequential margin expansion. Is it right to assume that in addition to sort of lapping the comp from the prior year inventory profits, there's also a consideration around faster terms of inventory that maybe would mute that sequential increase? Yeah, so let me go back and talk about the May increase and then sort of, forward view. You know, if you remember, the manufacturers came out and announced, and we followed on with our announcements for mid-May. I would say at that time, the market was probably still a little bit uncertain about the direction. We had obviously seen some storms, but the way it got executed was that, you know, there were some price holds for some contractors and some builders that went beyond the mid-May increase. As we started taking price from the manufacturers, you know, the market just wasn't realizing that. We did see sequential price improvement through the quarter, month to month, but the fact was that that was sort of timed with the increases that we saw from the manufacturers working its way through our inventory. You know, when we originally came out with the guide, you know, we expected to generate some inventory profits from the May increase, and it just didn't happen, mainly because of the price holds and how the timing of the price increase, our price increase to our customers went through. We, we really weren't able to generate anything from that. Turning now to sort of the, the future look, I think that the demand environment is much stronger. I think we're, we're more resolved around this increase in terms of what we believe we see in the marketplace, the demand environment that we see on the resi side of the business. The storm activity is sort of materialized and, you know, we're gonna continue to see sort of back half demand improve. I think that, you know, there certainly is inside of the four walls of Beacon a real determination around executing much better on this price increase than we did on the May increase. Hey, Joe, on the inventory point, obviously we have less units in inventory this year relative to last year, given all of the destocking that you mentioned. We've actually built some inventory in June and would expect to build some more in July. I, I see your point academically. I don't think it's gonna be a huge driver of inventory profits on a year-over-year basis in Q3. Thanks a lot, Frank, and thanks, Julian, for the detail. Just one other, maybe housekeeping item. I think I missed the price on the commercial, the non-res business in the quarter. Just thinking about the quarter ahead, just any ideas on the mix between volume and price within your, seven to nine daily sales guidance? On the non-res, you, you didn't miss anything because we didn't give it, but happy to provide some color there. In terms of the pricing in the quarter, think of it as being up mid-singles in Q2. Then ask me your, your next question again. Just the balance of volume versus price within your third quarter daily sales guidance? Yeah. There's a, you know, that 7%-9% in the, in the daily. Let me break it down a little bit for you amongst the line of businesses, 'cause there's some, there's some significant moving parts that you would miss if you ended up doing it on an average basis. On the resi side, you should think about sort of high single-digit volume and low single-digit price. These are year-over-year numbers, obviously. On the commercial side, volume's down high single-digits to low double-digits, with price up low to mid single-digits year-over-year. And then on the complementary side, it's largely going to be coastal plus a little bit on the siding side. Think on a revenue basis for complementary on low double-digits. All right. Thanks for all the great detail. Our next question comes from Ketan Mamtora from BMO. Ketan, your line is now open. Please go ahead. Thank you, and congrats on a good quarter. Julian, I'm, I'm curious if you can talk to, talk a little bit about, you know, kind of regional trends, in this quarter and what you've seen so far in supply. Are there any regions that are performing better than what you expected or, or kind of worse than you expected? Yeah. Thanks, Ketan. Yeah, it is actually, there are some significant regional differences across the country. Actually, through the first half of the year, it's shifted as well. You know, as we expected, the storm-related markets are the ones that were the strongest through the first half of the year. You'll remember all of the, the weather that we saw in California at the start of the year. That actually was down in the first quarter because of all the rain and all the weather that was happening there, but was a strong rebound in the second quarter. California was up substantially in the West Coast. Texas experienced some, some of that as well. We expected it down. A lot of new residential construction was impacting Texas in the first quarter. It changed in the second quarter. Storms impacted that. The Midwest had storm carryover from last year, so we, we saw that carry through. We saw that actually dissipate a little bit through the end of the second quarter. Florida had a lot of carryover from last year. Interestingly, there, we saw some declines later in the second quarter in the Florida market as some of the new labor laws there came into effect, and so had impact that, that sort of we saw bring it down. There was some significant storms in Tennessee and Kentucky. We saw that as, as good. Then we saw a relatively, I'd say, stable and quiet in, in the Northeast. Having said all that, we also saw storms throughout the second quarter that impacted a pretty wide swath of the country. I wouldn't say there was any one particular storm that was, you know, very large, but we saw a number of decent-sized storms really across the entire country that we believe is gonna have impact through the rest of the year. You know, you know, it's an interesting question, but it was a really, really a mixed bag across, and we saw markets change from first quarter to second quarter, and as we're progressing through the year. Hey, Ketan, on the, the claims data, just if you look at that in, in Q2, the insurance claims data was up about 25% year-over-year, and that was a, a low comp last year. As we said many times, that 2022 was not a, a very good storm year for us, but certainly the claims in Q2 were a, were a nice lift. Got it. No, this, this is a very helpful perspective. Thank you. I'll jump back in the queue. Good luck. Thank you. As a reminder, please note that each caller is limited to one question. Our next question comes from Michael Rehaut from JP Morgan. Michael, your line is now open. Please go ahead. Hi, guys, Doug Wardlaw for Michael. I was wondering if you guys could give any color on any potential material changes within the supply chain in residential? You're breaking up there a little bit, Doug, but, I think you said, are we seeing any sort of changes in the supply chain on the residential side? I mean, the, the short answer to that would be yes. A 48 million square ARMA shipment quarter would imply, you know, the, the, the manufacturers ship not just all their available production, but also, some of their inventory. You'd expect them to be fairly low on, on inventory coming into the third quarter. Obviously, we don't have a lot of visibility into how they're running day to day. I'll tell you, you know, overall, the market is tight. It's been that way now for a little while. We're seeing differences across, you know, manufacturers. We're seeing some regional product differences. I mean, we're seeing tightness in, in tile in Florida and, and things ease up. In general, you know, the market's tight. Many of the manufacturers are on planned availability, and that's something that we've been dealing with for the last, you know, almost three years now. It's not something that I think is especially difficult right now. We're managing it. We've been used to managing it, but supply is generally tight. Great. Thanks. Just to expand on what you said on contractor destocking a little bit earlier, are, are there any estimations on how you feel that compares in the back half of the year? If so, can you just go into a little bit more detail on that? Yeah, just quickly on that one, we've said that we think that the destocking is largely behind us. I mean, I think, everyone was surprised by the amount of inventory that was held at the contractor locations. We knew that there'd been some build at the end of last year. You know, we'd called it in the middle of last year that we saw the market easing up and supply becoming a little bit easier. I think manufacturers continued to ship in, and I think the contractors at that time were continuing to take jobs that, or to take shipments that they didn't actually have jobs for. You know, it built up pretty quickly. We think that's mostly behind us. It's not everywhere. We obviously, we don't have visibility into every contractor's warehouse, right now. We think it's, it's coming back to normal. We do think the overall commercial market will probably be down a little bit in the second half of the year relative to sort of original expectations, but that's more to do with cycle times extending, labor availability. I mean, you can imagine, I mean, both on residential and commercial, you know, some of the heat-related issues through the southern states, particularly Texas and Arizona, over the last several weeks have been significant. You can't get up on a roof and do that type of work in that type of heat. We're gonna see that come down. We're not sure that gets gets all caught up in the back half of the year because labor's pretty tight as well. But we think most of the supply chain issues and most of the, most of the contractor stock has has been depleted. Our next question comes from Marius Morar from Zelman & Associates. Your line is now open. Please go ahead. Good evening. Thank you for taking my question. Just a quick one on, on storms. About six months ago, I think you said that you expected about a 2%-3% contribution to growth from the storms normalizing on a year-over-year basis. Now, given the strength we've had, I'm just curious if you have any thoughts on that, if you have like an updated number for us. Thank you. Thanks, Marius. We did say that we, you know, our planning assumption was always going to be, and will always be at the start of any year, our assumption will be in 10-year average storm cycle. In the first half of the year, we've probably seen enough storms that would probably carry us through in that if we saw nothing the rest of the year. Nothing the rest of the year is probably not a, a totally reasonable assumption. If we saw a reasonable amount of storm activity in the second half of the year, you'd expect it to be up. You know, quantifying exactly what that looks like, right now is still probably a little bit too early. I mean, I think that, you know, we certainly see it as better than average. We would expect that to be. Even on the storms that have occurred in the first half of the year, we're still getting numbers that are coming in, and it's difficult to quantify. Based on, you know, kind of best knowledge and how we think about the market, you know, we would expect it to be above the 10-year average, but how far above, we're not quite sure right now. Right. Appreciate the thoughts. Thanks, Marius. Our next question comes from Mike Dahl from RBC. Mike, your line is now open. Please go ahead. Hi, thanks for taking my question. Just on that last point, Julian, since it seems like the industry has still been like largely hand to mouth. I know Frank mentioned a little restock, manufacturers kind of producing all out and the sellout volumes have, has kind of matched broadly that, that trend. You're just heading into hurricane season. When we're thinking about, you know, clearly this year could end up significantly above normal storm demand, the concerns out there that still exists on roofing now has kind of shifted to: Well, how do you comp against that next year? To the extent that there's additional storm demand in the form of hurricanes this year, is that something that can get served in 2023? Do you think that helps kind of buffer some of the comps as we look out to 2024?... Maybe if you can just talk about that and, and maybe loop in what you're actually able to do on restock into the back half of the year and, and kind of safety stock that you can build. Sure. I mean, my short answer would be yes, yes, and yes, I think to some of the comments you made. I mean, it's if we were to see significant storm activity in the second half of the year, given the current environment, I think it would be difficult to imagine us fulfilling all needs. Now, remember, if you see... I mean, hurricanes particularly take a while to deal with because of because usually there's a lot of devastation. People are out of the market, and you've got to get back into it. It takes a little while for them to ramp up. They, they generally materialize over four quarters as it is. You know, I, I think that you should assume that the, the shipments in Q2 from the manufacturers, a good chunk of that went into inventory. Not all of that got shipped out of the door and gone onto job sites. There is, there is some inventory sitting in distributors' warehouses right now. Certainly, you know, our balance sheet reflects that as well. You know, so that's gonna be a part of it. The next piece would be, you know, we've- the manufacturers are still going to, you know, produce, you know, and how they run is gonna determine a lot of the marginal output, if you like, you know, one or two million squares here or there. You know, it's, it's really difficult to determine, but any significant storm, you know, there's, there's probably a difference between one that hits Texas and one that hits Louisiana as well. You know, but any storm of any size that has real impact and has significant wind, wind damage, is certainly gonna carry over and bolster 2024 demand from a storm perspective. Look, I mean, our planning assumption is always gonna be 10-year average, and we, you know, there is usually storm carryover. We had storm carryover into this year from Ian last year. You know, these, these things tend to, you know, even out over time. Yeah, any storm in the second half of this year will be difficult to service. Hey, Mike, just a couple of thoughts in addition to Julian's good comments. I mean, ARMA was up 13%. I mean, everyone sort of knows that one. Our volume out the door on shingles was about 6% up. You know, that difference you can largely see is folks restocking in the quarter. You know, we made a pivot, kind of mid-quarter to knowing that the demand environment was going to be better and started to restock, and we'll continue to do that, until we get to the right point in the kind of late summer, early fall, where we don't want to carry that much through the winter. Depending on what happens in winter, you know, the manufacturers probably built a little bit of inventory in the late winter, early spring, which is one of their abilities to be able to, you know, put out a 48 million squares in the second quarter. If they build more inventory, that'll give us the buffer that we need. We certainly have the balance sheet to be able to do it if we need to. We'll lap Hurricane Ian in September, although we think there's probably more than a year's worth of demand there, but it'll subside after we begin to lap the early days of that one. Hurricane season, we'll obviously have a watchful eye on that one as we go forward. We think we're in a good position, and, and we're ready to pivot, and, and hopefully, you've seen us, by virtue of the inventory levels over the last year or so, that, that we can pivot pretty, pretty quickly and, and be responsive. Okay, thanks for the thoughts. Our next question comes from Truman Patterson of Wolfe Research. Your line is now open. Please go ahead. Hey, good afternoon, guys. Thanks for taking my question. So you all drove some nice leverage on the OpEx line year-over-year this quarter. Frank, y-you mentioned lower incentive compensation, payroll benefit costs, and I, I think also lower fuel. As we're thinking through the back half of the year, do you still generally expect continued, you know, leverage year-over-year, or were there any kind of one-time items in the second quarter result to think about? Yeah, I think on the OpEx leverage, look, we were excited about what we did. We did get help, obviously, in the incentive comp accrual reset. Last year was, you know, an awfully, awfully big year for us, and, you know, we reset the targets as we put the budget together this year. You should assume that the year-over-year reduction in incentive comp should, should continue, although it should get smaller as the rest of the year progresses. Look, if fuel stays relatively where it is, we should continue to get a little bit of benefit on that one. I think the big thing for me on OpEx is, when you look at the nominal quarterly number, the $378, and then you back out the greenfields and the acquisition-related costs, you really see the leverage in the existing branches. It's pretty impressive. You know, we'll continue to battle inflation like everybody does, but I think the team did a really nice job of being able to handle the additional volume that came in. Look, resi's our bread and butter, and we did a really nice job of doing that in the field. The team did a nice job of keeping an eye on its costs when, you know, when the volumes came in. We should be able to continue to put something, you know, call it in the mid-15s or so in the third quarter, and then we'll see what the fourth quarter holds. Perfect. Thanks, guys. Our next question comes from Philip Ng from Jefferies. Philip, your line is now open. Please go ahead. Hey, guys, congrats on a really strong quarter. Frank, if I heard you correctly, it sounds like you're expecting volumes to worsen in your Non-res segment in 3Q. That might just be simply comped, but curious what you're seeing in terms of bidding activity, how you kind of see fourth quarter shaping up. Do you expect 2024, from a demand standpoint, returning back to growth? Certainly there's some concerns about tighter lending and what that could mean for the Non-res markets. Yeah. Hey, good, good set of questions, and you're absolutely right. I'm, I'm glad you brought it up. The Q3 volumes are much more around last year's comp. It was an extremely strong comp on the non-res side in Q3 of last year. We're not seeing sequential degradation. As a matter of fact, it kind of gets less, less negative as you get through the months in the second half of the year. You know, bidding and quoting activity is actually up kind of low double digits. We feel good about that. The project sizes are a little bit smaller, but we're seeing a lot of activity on the R&R side of non-res, so a little bit less on the new res and a little bit more on the R&R. That's a pivot that we thought was going to happen as material became available and as interest rates ticked up a little bit. Certainly when you look at, at non-res in 2024, we really haven't put our minds, you know, totally around next year yet, but the comps in the first half will certainly be ones that, you know, hopefully we'll be able to grow off of. Is there any mixing watches between the R&R versus the new construction side for, for non-res? Yeah, in the, in the new res piece, you're gonna get a, a, a little bit higher ISO to single ply ratio. You know, given the fact that you're putting, you know, pretty high R factor on there, so you might get a couple layers of, of ISO before you put the membrane on. In R&R, it really depends on the extent of the reroof. If they're only gonna tear off the membrane, then you might not get as much ISO in it. Obviously, if they go all the way down, you might be able to get some more. Generally, the, the relationship between ISO and single ply is gonna be different in R&R versus new res. Yeah, Philip, this is Julian. It's not a switch between different types of products. It's more of, as Frank said, the ratio of insulation to the skin material. Okay. All right, thank you. Great color. Appreciate it. Our next question comes from David Manthey from Baird. Your line is now open. Please go ahead. Hey, guys. Good afternoon. Just a quick one here. Could you level set us on the current gross margin differential between resi and non-res roofing? Yeah. Hey, Dave. There is the same general differential that you have seen, you know, throughout history. It, it obviously ebbs and flows depending on, you know, the quarter and the mix and, you know, whether it's R&R versus new and, and whether it's direct versus warehouse shipments. No, no real change in the rack and stack on that one. As I, as I think you know, and I'll just blend in the complimentary real quick, the Coastal acquisition was, was helpful on the complimentary side. I'd say the resi and complimentary are, are at the top end of the range, and then, you know, you get the, the commercial on the, on the lower end. Dave, remember that there was a lot more inflation on the non-res side than there was the residential side. In terms of mix of business that we have, it's tilted a little bit more towards the non-res side. But also remember that the OpEx associated with delivery in non-res is lower relative to the performance. We see, you know, margins, bottom line margins are about the same. And, you know, on the commercial, the non-residential side of the business, inventory turns generally are better as well, so we can manage that. There's some direct ships that we get credit for. We can drive, drive really nice return on capital in that business as well. That's great. Thank you very much. Our next question comes from Trey Grooms from Stephens. Trey, your line is now open. Please go ahead. Good afternoon. This is Noah Merkousko on for Trey. Thanks for taking my question. I just wanted to ask, what do you see as the biggest variables that get you to the high end versus the low end of EBITDA guidance range for the full year? Yeah. you know, probably the first thing would be... the most immediate thing, top of mind would be the price increase, execution on that. That will be, that will be critical. Like I said, we're, we're due to execute on that starting early next week. That will be, that will be a really important factor in terms of both top and bottom line. Obviously, the extent of any additional storms. Look, I mean, one of the things that we're looking at is, as you said, we've, we've added a number of greenfields at the start of the year. We have worked very, very hard on making sure they ramp up quickly, getting them to profitability, seeing the acquisitions that we've done drive forward and perform better than help towards the top end and execution at the branches. You know, making sure we can maintain the leverage that we generated in the second quarter. It's a little bit of everything. Top of mind right now, in terms of top end versus others, would be the price increase. The only other thing to keep in mind is just the end of the fourth quarter is always a tough period of time to handicap. You know, once you get past Thanksgiving, is it, is it wintertime or not? That's always in our thinking as we project the second half of the year. Got it. That all makes sense, and I appreciate the color. I'll leave it there. Thanks. Our next question comes from Kathryn Thompson, from Thompson Research Group. Kathryn, your line is now open. Please go ahead. Okay, this is actually Brian Biros on for Kathryn. Thank you for taking my question. On the non-resi side or maybe even the complementary product side, just thinking a little bit bigger picture, are you seeing any impact or consideration yet from kind of state regulations that are aimed at renovating buildings for improved energy efficiency? We've been following some of these. I think a big one is in New York. Just curious to see if or when you might see that in your business. Thank you. Let me give you a little bit of color, Brian, on what we are seeing in, in our complementary business, particularly around the waterproofing. This was one of the thesis that we had. We are seeing significant uptick in terms of repair work in the waterproofing space. That, we believe, is coming from a lot of concerns about the maintenance of waterproofing, post the Surfside Condo collapse 2 years ago. We believe that it's taken some time. We think that there's gonna be some new regulations coming in around that. The one that we've, we've had a thesis around and, and, you know, sort of underpinned, the acquisition of Coastal and our belief in the waterproofing as a, as a great business for us to be in. It ties very, very closely to repair and replacement on the roofing side. It ties very nicely in with the overall non-res roofing market as well. They, they are overlapping businesses. But the specialty part of our business on that side of it is, is certainly seeing impact from from what we believe is, is probably tighter regulation and people sort of going back, condo associations, building owners, going back and taking a look at, at their maintenance schedules with regards to waterproofing, and an uptick in terms of, of what we see there. Beyond that, I think that there's a very long run trend towards more insulation. Obviously, in terms of building energy efficiency codes. You know, generally codes only point in one direction, and that's been to higher R-value. The insulation that we ship into, into commercial buildings has been, has only been increasing. You know, certainly municipalities, you know, they don't all implement the same building code at the same time. That, that's been something that's been a long run trend towards more and more insulation. I think you see it in the, the commercial segment of our business. The other one we see is things like Title 24 in California, where you mandate cool roofs, you know, the, the demand for that product. There, there are certainly, you know, building codes that impact it. I'd say that we're seeing it probably most in waterproofing and in commercial insulation. Thank you. That concludes the questions. Now I'd like to turn the call back over to Mr. Francis for his closing remarks. Thank you, Sam, and thank you to everyone for dialing into our call this evening. We were tremendously excited about both the second quarter and the transaction at the beginning of the third quarter that allowed us to repurchase all of the outstanding preferred shares. We think this is a significant moment for Beacon and the work that we've done over the last several years to build the flexibility and the balance sheet capacity to execute a transaction like that. It's been a tremendously rewarding last month or so, and I'm excited for both our shareholders and the employees of the company. With that, thank you for your appreciation of Beacon. This concludes today's call. Thank you, everyone, for joining. You may now disconnect.