Greetings. Welcome to BlueLinx Acquisition of Vandermeer Call. At this time, all participants will be in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Ryan Taylor, Vice President of Investor Relations and Treasury. Ryan, you may now begin. Thanks, operator, and good morning, everyone. Thank you for joining us today to hear more about our acquisition of Vandermeer Forest Products. With me on the call are Dwight Gibson, President and Chief Executive Officer, and Kelly Janzen, our Chief Financial Officer. The call is also being webcast. Access to the webcast and supporting materials are available in the investor relations section of our website, bluelinxco.com. We encourage you to follow along with the slides during our call. Today's discussion contains forward-looking statements. Actual results may differ from those forward-looking statements due to various risk factors and uncertainties, including the risks described in our most recent SEC filings. At the conclusion of our prepared remarks, we will open the line for questions. Given the timing of this call, I also want to establish that our scope for today will be solely focused on the acquisition announcement. We will not provide any disclosure or updates regarding third quarter results or any other topic unrelated to this acquisition. With that, I'll turn the call over to Dwight. Thanks, Ryan, and good morning, everyone. We appreciate you joining us for this exciting news. I wanna first welcome all Vandermeer Forest Products employees to the BlueLinx team. We respect the work you've done to build and run a high-quality business, and we are truly excited for you to join our team. I also wanna thank our BlueLinx teammates who are involved in the due diligence and integration planning related to the acquisition of Vandermeer. I'll begin by saying that the acquisition is well-aligned to our strategy and our disciplined capital allocation framework. This acquisition extends our reach into the Northwest United States, Hawaii, and Alaska, provides a platform for specialty products growth, and strengthens our relationships with key strategic suppliers. We acquired the business for $67 million, including $3.6 million for a 10-acre site in Spokane, Washington. We purchased the business for $63.4 million, or approximately 3.3x trailing 12-month adjusted EBITDA as of September. The deal was entirely funded with cash on hand. After funding the acquisition, we are still in a very strong financial position, with net leverage below 1x and ample liquidity. As I mentioned, this acquisition is consistent with our stated specialty-focused growth strategy. Over the past three years, Vandermeer specialty product sales have averaged 66% of total sales. They have a strong siding offering and a growing engineered wood business. We believe there are opportunities to pull through sales of our key specialty products into Vandermeer's markets, including our private label brands, onCENTER for engineered wood, and PrimeLinx for millwork. This acquisition is very compelling from a geographic perspective. We're adding three distribution branches in the state of Washington, which are conveniently located near Seattle and Portland, two of the largest and fastest-growing metropolitan areas in the United States. This enhances our ability to gain allocation from strategic suppliers and grow key specialty product categories with our national accounts. Vandermeer has high-quality suppliers, including strong brands such as Louisiana-Pacific, Roseburg, and West Fraser. They serve over 250 customers, including some of our key national accounts, such as Builders FirstSource, Home Depot, LMC, and Do it Best. Taking a look at our combined footprint, you can see the acquisition of Vandermeer Forest Products gives us coast-to-coast coverage throughout the United States, and we now serve all 50 states. Our due diligence was comprehensive and thorough. Our integration team is being led by a 30-year veteran in the building products industry, and we have a clear, detailed plan for seamless integration. In summary, this acquisition checks all the boxes in terms of our strategic criteria. We are excited about leveraging this acquisition as a platform for growth in the most attractive MSAs in the West. That concludes my prepared remarks. At this time, we'll be happy to take your questions. Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question today, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Once again, that's star one. Thank you. Our first question will be coming from the line of Greg Palm with Craig-Hallum. Please proceed with your questions. Yeah, thanks. Morning, everyone, and congrats on the announcement here. Thanks, Greg. Good morning. Thank you. Can you maybe expand a little bit on the background of the transaction just from a standpoint, you know, was this something that you know, process driven, you know, was this something that, you know, was more coming from you? Maybe just a little bit of background would be helpful to start. Yeah, Greg, team did a really great job on this. You know, if we've been talking about building out our corporate development capability and being really thoughtful around, you know, what opportunities we would pursue that would accelerate and complement our strategy, and this is the result of exactly doing that. Identifying the regions of the country that we were excited about, they wanna increase our presence in, and going through a pretty thoughtful and disciplined process of identifying potential targets and beginning conversations. That's what happened here, and we're really excited about the outcome. Okay, good. I wanna dig into the potential revenue synergies here, 'cause it sounds pretty meaningful and, you know, you've got a slide, you know, strategic rationale. I mean, I think the geographic expansion is pretty clear cut, but can you just maybe go into a little bit more detail on, you know, just from a synergy potential from a, you know, gaining exposure to additional suppliers? I don't know how much customer overlap there is. You talked about some, but there's probably some customers that they're working with that you aren't and, you know, frankly, a lot that you're working with that they aren't. I'm guessing some cross-sell potential as well. Maybe just, you know, highlight a few that you think are more important. Yeah. I think you've summed it up quite well. You know, we're excited about the opportunity now to have a growth platform in a part of the country that we are very keen on. Vandermeer has some great suppliers that are aligned with our specialty focus strategy, obviously on the siding side and elsewhere. We think this creates more opportunity for us to lean into that market and drive growth. It's a market that is well suited for some of the products that we have that they don't currently carry, and we look for opportunities to bring that into their portfolio and offer that more broadly in their region. There is a, you know, a good overlap on the customer side, which is also exciting, in terms of, you know, us being able to do more, for our customers that we see meaningful growth with and additional customers that potentially, we could bring more capability to. We're really confident that the growth potential here with the combination is gonna be meaningful. We have a really capable team, that's well-versed in the market, understands, you know, the supply side, the customer side, that's really focused on driving the integration here, and, you know, we're excited about the potential. What do you think that Vandermeer gains from being part of a bigger organization like BlueLinx vs doing this as a standalone independent? Yeah. Just all the things that come with scale, right? Obviously from a supply perspective, they now have a part of a broader, bigger organization and can have different kinds of conversations with suppliers. There's customer opportunities that you know, we now can leverage in a more efficient way, not only for customers that they have that we wanna grow with, but vice versa. Just the ability to kinda lean into our capabilities in the procurement side, extend their capabilities in the product management side. Our private label products are something they're very keen on and we think has great opportunity in that market. We can provide that now in a more you know, inclusive and broader way. We're just really excited about the opportunities to give them more capability for us to have greater reach and to do more together. Yeah. Okay, great. Well, thanks again for the call and congrats again. Thank you. Our next question comes from the line of Kurt Yinger with D.A. Davidson. Please just give us your questions. Great. Thanks, and good morning, everyone. I just wanted to start on the margin side. I mean, 12.8% over the last 12 months is pretty impressive for, I guess, a business of their scale and how far they deliver, you know, to Hawaii and Alaska. I would think that would be a problem or perhaps lower margin business. Maybe you could just talk about, you know, why you think the margins there are so strong. Yeah. I'll get started and, you know, maybe Kelly could weigh in a bit as well. You know, really well-run business. Interestingly enough, you know, markets like Hawaii and Alaska, the margin profile is probably a bit stronger, just given the local needs in that market and the ability to get product in. They've done a really good job and been present in that market for a while and established a really good foothold. We actually like those margins quite a bit. Then their mix, you know, they're really focused on the parts of the home that bring the most value, great capability on the siding side, and they've done some really interesting things to establish really strong relationships. Very thoughtful team, capable sales organization, has access to great brands in a good part of the country, and they've been able to perform really well. We're looking forward to leveraging that and continuing to move forward. Got it. Thanks. I think I missed it, but what was the mix of sales, specialty vs commodity? Over the last few years, they've averaged almost 70%, about 66% of their sales have been on the specialty side. Got it. Okay, great. You talked about the purchase of the Spokane facility. Was Vandermeer previously leasing that? Are there any savings associated with the purchase of the real estate? No, that's an old facility that they had as a part of their business and we like it. We think there's a lot of opportunity there. They really have done a good job of creating good capability and the quality of their facilities fits in with our organization and we're looking to kinda take that and use that to create more capability and capacity to drive growth in the region. Got it. Okay. Realizing, you know, you guys gave the kinda trailing 12 EBITDA number, is there any way you could provide maybe kind of a three or five-year kinda look back in terms of what the business has done? I mean, obviously the last two years have been pretty exceptional, so just trying to get a feel for maybe what that business looked like pre-pandemic or even 2020, 2021. Sure. Well, you know, we don't have all the detailed look back here available for the call, but, you know, it behaved a lot like a well-run business with a similar mix that Dwight talked about just a minute ago. Certainly they saw some upside in the last couple of years, given the tailwinds that you just talked about. But again, you know, good margins relative to their mix and not wholly inconsistent with the way we think about what margins should be for these types of products. Okay. All right. Just last two from me real quick. On the synergy front, it sounds like you see the potential for some sales synergies, but is there anything on the cost side? Secondly, are you gonna kind of maintain the Vandermeer brand or are you gonna try to bring that under, I guess, the BlueLinx umbrella eventually? Yeah, well, I'll take the synergy one. We certainly do expect some cost synergies. While this is, you know, this is primarily around expansion, growth, you know, leveraging the networks for both sides, as Dwight mentioned earlier. We certainly do expect some cost synergies. We're still working through what that impact would be, and we can talk about that later. Certainly as we go to bring our best practices and we talk about leveraging our services and our scale, we would expect to see some benefit there. Then I'll let Dwight talk about the branding. We're excited about the capacity and the capability that the team brings, and our plan is to really be thoughtful about that. We will be leveraging the BlueLinx brand in the future as we really drive growth and capability through this incredible team and platform that's now part of the organization. Great. Okay. Well, thanks for the color, Dwight and Kelly, and I'll turn it over. Yeah. Thanks, Kurt. Thank you. Our next question comes from the line of Reuben Garner with Benchmark Company. Please proceed with your question. Thanks. Good morning, everybody. Had some difficulty getting in the Q&A, so I missed part of it, so if any of this is duplicative, apologies. Maybe just to start, I recognize you don't wanna necessarily talk about the third quarter's results, but maybe if you could just kinda weigh in a little bit more on the timing, how you guys are thinking about. I don't know how long this acquisition had been in the works, mortgage rates up where they are today. It certainly appears that you're sticking to the long-term kinda vision. Should we expect this kind of activity to continue in the months ahead, or was this kind of a one-off because it didn't materially move your leverage and it's maybe something you've been working on for a period of time? Yeah. Well, thanks for the question. Again, you know, we are very, very focused on driving great outcomes for the company. Our capital allocation framework remains intact and looking for opportunities to create good value. We felt that this is a really nice step forward for the organization for all the reasons we've talked about, geographic expansion, good specialty mix, strengthens our relationships with some key suppliers, great customer growth opportunity. You know, we felt that it really checked all the boxes strategically and also fit within our capital allocation framework appropriately. We're excited to kinda move forward, and we're gonna continue to really make sure that we take a balanced and disciplined view to the market. Particularly as it relates to our capital. We're still in a very strong position as it relates to our liquidity and our leverage, and we're always gonna look to maintain that. Continue to make sure that we're leaning forward and taking good advantage of good opportunities and creating opportunities to grow cash flows over time. I understand they're serving Portland from the Washington locations. Does having Vandermeer's kind of name presence allow you to maybe organically grow at a location closer to the Portland market or any other markets out west, or do you feel that the way that it's being served today is, I guess, efficient enough as, I guess, constructed? Yeah. We're looking at all really exciting opportunities for growth, profitable growth in the region. They have good capabilities, good presence that we think we could support and continue to invest in, to help them reach the parts of the market that they really wanna reach. We're open to all opportunities, but it really creates a platform for us in this part of the country that we're gonna look to take full advantage of. Any sense on what kind of market share they have in those markets? Are they one of the number one or number two players already, or is that sort of the opportunity? They're well positioned, a key player in the market. But we think it's a market that still has some really great potential, really good characteristics. The kinds of homes that are built here and the products they need fit well with our strategy. We're gonna look to continue to grow our presence and really continue to make this a very high-performing and strong organization. Okay, last one for me. Any risks that you foresee, or have already accounted for in terms of revenue, these synergies, whether it be one of the suppliers that they're working with, or maybe a customer, any color there would be great. Thanks. No, thanks. We took a really hard look as a part of our diligence and planning, and one of the things that is really encouraging about this opportunity is that it's truly a growth opportunity. We feel really good on the supplier side. I have good confidence that we're gonna continue to be able to grow and partner with all the Vandermeer suppliers and similarly on the customer side. Obviously, we don't have any branches in that part of the country, so there's really no overlap from a footprint perspective. We're confident that this will really be a platform for growth. Great. Congrats on the deal, guys. Thanks. Thanks. Thank you. As a reminder, to ask a question today, you may press star one. Our next question is from the line of Jeff Stevenson with Loop Capital Markets. Please proceed with your question. Hi, and congrats on the acquisition today. Thanks. Thanks. Sure. Yeah. Can you talk about the decision to use cash on hand to make the acquisition and whether any options were considered as part of the deal? Yeah, sure. Thanks for the question. You know, we had been positioning our balance sheet for a while now to get prepared for potential M&A acquisitions. We had talked about that previously, and that was really a part of the strategy even last year to raise the cash with the bonds that we did in October. You know, get our ABL opened up and then start, you know, as we started generating cash, you know, we had that cash on hand to be available for a creative investment such as this. Really that was, you know, the first step is to go and, you know, use the cash that we have available before we would go on the line, and that was really the thought process of how we ended up using cash. As we mentioned in the release, we still have ample liquidity, including cash on hand after this transaction. Okay. Got it. At your investor day, you highlighted one of your strategic priorities as increasing your sales concentration at top accounts, and it seems like there's good overlap with Vandermeer and some of the top accounts you currently work with. Can you talk about kind of the opportunity there and if that was one of the kinda key reasons that made this an attractive opportunity for you? Yeah. We like the opportunity to grow share of wallet with good customers, and this clearly allows us to do that. Allows us to have bigger, broader conversations. We can talk about service in more parts of the country that can be consistent and different offerings that we could bring. This definitely is a step in the right direction. Thank you, and congrats again. Thanks. Thank you. At this time, we have reached the end of our question and answer session. I'll turn the floor back to management for closing remarks. Thanks, Rob. This is Ryan. We appreciate everybody joining the call today and listening to the exciting news that we had to share. We'll provide more updates on the acquisition as we disclose our Q3 earnings results in early November. We look forward to talking to everyone then. Thank you. Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.