Greetings, and welcome to the GMS Inc. first quarter fiscal 2022 earnings conference call and webcast. At this time, all participants are in a 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 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Carey Phelps, Vice President of Investor Relations. Thank you. You may begin. Thanks, Daryl. Good morning, thank you for joining us for the GMS earnings conference call for the 1st quarter of fiscal 2022. I am joined today by John Turner, President and Chief Executive Officer, and Scott Deakin, Vice President and Chief Financial Officer. In addition to the press release issued this morning, we have posted PowerPoint slides to accompany this call in the investors section of our website at www.gms.com. On slide 2. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties, many of which are beyond our control and may cause actual results to differ from those discussed today. As a reminder, forward-looking statements represent management's current estimates and expectations. The company assumes no obligation to update any forward-looking statements in the future. Listeners are encouraged to review the more detailed discussions related to these forward-looking statements contained in the company's filings with the SEC, including the Risk Factors section in the company's 10-K and other periodic reports. Today's presentation also includes a discussion of certain non-GAAP measures. The definitions and reconciliations of these non-GAAP measures are provided in the press release and presentation slides. Please note that references on this call to the first quarter of fiscal 2022 relate to the quarter ended July 31st, 2021. Finally, once we begin the question and answer session of the call, in the interest of time, we kindly request that you limit yourself to one question and one follow-up. With that, I'll turn the call over to John Turner. John Turner? Thank you, Carey. Good morning. Thank you all for joining us today. We hope that you have had an enjoyable summer and that your families, friends, and colleagues are remaining safe and well. If you'd move to slide 3, the strong momentum we had exiting fiscal 2021 continued through our first quarter, with net sales topping $1 billion for the first time in our company's history. Through outstanding execution and our intense focus on delivering superior customer service, our team capitalized on continued strength in the residential market, an inflationary pricing environment, and solid demand for our core and complementary products, resulting in strong profitability. We delivered record levels of net sales, net income, and adjusted EBITDA, with sales up meaningfully in each of our 4 reporting product categories. We realized higher than expected gross margin of 32.2% as year-over-year increases in ceilings, steel framing, and complementary products partially offset pressures on wallboard margins, principally due to the timing of our passthrough of supplier pricing actions. Continued cost discipline and the outpacing of product inflation relative to operating expenses enabled us to improve SG&A and adjusted SG&A as a percentage of sales for the fifth quarter in a row, while at the same time, we maintained the customer focus that continues to differentiate GMS in the market. As a result, adjusted EBITDA margin improved to 12.3%, 200 basis points over last year's first quarter. Also contributing to our strong start to fiscal 2022 was our continuing platform expansion activities, enhancing our product offerings and broadening our service territories in numerous geographies. There's no question that we are still living in dynamic times, with continued strength in the residential market contrasting the lingering softness in commercial. Despite supply chain disruptions in the inflationary environment, the residential market remains strong and future indicators of sustained growth are mostly positive. While some builders in the near term temporarily paused construction as material costs skyrocketed and labor was constrained, others continued to build. Solid demand for both new and existing homes continues, as evidenced by the reporting from publicly held builders and the National Association of REALTORS, and the outlook for relatively low interest rates remains intact. In commercial, we have seen promising activity in certain sectors, such as those projects supporting education and government, technology, healthcare, and smaller retail and office tenant improvement. New and repair and remodel activity for larger office space and hospitality remains muted in many markets as developers are facing higher material costs and many large office tenants have not yet cemented their return-to-office plans, contributing to the holding pattern in these projects. Looking forward, however, the Architectural Billings Index has posted 6 consecutive months of increased billings as well as growth in inquiries, which have been broadly distributed across the country. Similarly, our internal measures of bidding and backlog are starting to improve, but the timing and the reality of these quotes turning into projects is yet to be fully seen. Of course, this growth follows 11 months of material decline in this indicator. Put-in-place non-residential spending has yet to show growth on a year-over-year basis since the start of the pandemic in March of 2020. This said, the Architectural Billings Index has always been the benchmark for future commercial activity, continued strength will eventually lead to a commercial recovery. On the supply side, across our end markets, product availability continues to be constrained in many areas. Notwithstanding, our scale has been a key competitive advantage, our results this quarter are indicative of our relative ability to secure and deliver product. Our team continues to navigate challenges as we provide the outstanding level of customer service that is foundational and distinctive for GMS. Commercially, we continue to reposition our resources to capture demand where it is strongest, demonstrating the agility of our capabilities and business model. Operationally, we have effectively partnered with our suppliers and customers to ensure delivery and fulfillment. Moving on to slide four, our strong quarterly results were also representative of our continued focus on the execution of our strategic priorities. First, expanding share in our core products, particularly in geographies where we are under-penetrated. During the quarter, each one of our core products delivered strong net sales growth and positive volume growth, demonstrating our team's success in growing our reach and customer base. Second, growing our complementary products to diversify and profitably expand our offerings. With strength in products such as tools, insulation, joint treatment, and lumber, we recorded 27% sales growth for the quarter in our complementary products, marking the fifth consecutive quarter of growth in this category. Third is our platform expansion. We are expanding our platform through accretive acquisitions and greenfield opportunities while maintaining discipline in managing debt leverage. During the 1st quarter, we made significant strides in expanding our reach and enabling enhanced service to our customers with the opening of 5 new greenfield locations and the completion of 2 important acquisitions. Notably, on July 1st, we added Westside Building Material to our distribution network, including 9 locations in California and 1 in Las Vegas, expanding our presence and reach into critical and previously underserved markets. Westside recorded roughly $200 million in sales for calendar year 2020 and appears on pace to exceed that number in 2021. Also during the quarter, as further expansion of our complementary products, we acquired Architectural Coatings Distributors, a specialty EIFS and stucco operation, and providing a platform for further expansion in the Northeast Ohio market. This transaction provided us the opportunity to advance our exterior envelope capabilities in that part of the country. Even with a slight pause in M&A activity at the outset of COVID, we have added 35 new locations to our footprint in just the last few years. Looking forward, we maintain a robust M&A pipeline with a focus on opportunities that create shareholder value. Building materials continues to be a highly fragmented industry with opportunities to enhance our complementary product offerings, deepen the scale of our core products, and reach customers beyond our current service territories. Our strong balance sheet and liquidity position provides us the ability to continue to pursue both organic and inorganic opportunities. The fourth pillar in our strategic priorities is to leverage our scale and employ technology and best practices across the business to drive improved productivity and profitability. We are driving purchasing efficiencies, enhancing our pricing practices, providing improved transactional efficiency and effectiveness for our customers, and supplying our team with the tools and data to make informed business decisions, all with the intent of improving our value proposition for all stakeholders. These efforts are focused on lowering our cost of doing business, delivering superior service, or both. With that, I will now turn it over to Scott to provide more perspective on our financial results for the first quarter. Scott? Thanks, JT, and good morning. Looking at slide 5, net sales increased 29.8% for the quarter to just over $1 billion, rising 23.2% organically. This exceeded our expectations for the quarter as we benefited from continued strength in the residential market and heightened inflationary trends in the marketplace. Adjusting for 1 less selling day year-over-year, net sales increased 31.9%, with daily organic net sales increasing 25.2%. From an end market perspective, in the U.S., for example, residential sales showed considerable strength, up more than 30% on both higher volume and price, while commercial sales, which were also up double digits, have continued to be sluggish from a volume perspective, but were up overall on higher pricing. Wallboard sales of $390.1 million increased 18.9%, or 14% on an organic basis, comprised of a 12.5% increase in wallboard price and mix, and a 1.5% increase in volume, or 3.3% on a per-day basis. Overall, on a per-day basis, wallboard sales increased 20.8%, with volume gains reaching 5.5%, together with 15.3% in price and mix. On a unit basis, contributions from acquisitions and strong residential volume more than offset lower commercial activity. Given recent supplier pricing actions, our average realized wallboard price has gone up sequentially each month since last September, with a first quarter fiscal 2022 average of $356 per thousand square feet, up 8.4% from the fourth quarter and up 14.5% from the first quarter of last year. Having received notices of additional impending manufacturer price increases, we expect this upward trend to continue at least into the second quarter. Ceiling tile and grid sales of $138.1 million increased to 20.4% year-over-year, and 16.8% on an organic basis, comprised of 13.2% of price and mix, and 3.6% from higher volume. On a per-day basis, net sales of ceilings were up 22.3% year-over-year, with 5.8% realized through volume gains and the benefit from acquisitions. steel framing sales of $196.3 million increased 77.6% as steel prices were up more than 70% as compared with a year ago. On an organic basis, steel framing was up 68.7%, comprised of a nearly 68% benefit from price and 0.8% on increased volume. On a per-day basis, steel framing sales were up 80.4%, including a 9% increase in volume, including the benefit from acquisitions. Sales of complementary products, on which we have placed increasing emphasis internally as one of our primary drivers of growth, grew 27.4% to $317.6 million for the first quarter, as we benefited from positive contributions from acquisitions, continued strength in our Canadian business, and strong pricing in certain product categories. On an organic basis, sales of complementary products were up 18.1%, with daily net sales up 29.4%. Gross profit of $335.8 million increased 28.9% over a year ago as gross margin performed better than expected, coming in at 32.2%, or 30 basis points behind last year's level. Price-cost dynamics, principally related to the timing of the implementation of price actions, were the notable driver of this performance. Turning to Slide 6. Adjusted SG&A expense as a percent of net sales improved 200 basis points year-over-year to 20.2% as significant product inflation outpaced increases in operating costs. All in all, first quarter adjusted EBITDA of $128.1 million was 54.2% higher than a year ago, and adjusted EBITDA margin improved 200 basis points year-over-year to 12.3% for the quarter, representing an incremental margin of 18.8%, several points higher than our earlier projection. Slide 7 references our cash flow dynamics during the quarter as well as our balance sheet and liquidity position. As is typical during our first quarter, we recorded a use of cash from operating activities and free cash, albeit at a heightened level in this environment. These amounted to $75.1 million and $81.9 million, respectively, as we work to ensure product availability amid an environment of tight and less reliable supply and as we proactively manage inventory levels in certain product categories where further manufacturer price increases were expected. The significant increases we had in our revenues during the quarter also drove a use of cash related to accounts receivables. Looking ahead, we do expect to generate improved levels of free cash flow, particularly in the back half of the fiscal year as these dynamics normalize, which is also typical of our normal quarterly cadence. On a longer-term basis, we continue to maintain our through the cycle objective of generating free cash flow in the range of 40%-50% of adjusted EBITDA. Capital expenditures of $6.8 million compared to $4.7 million in the prior year quarter. We continue to expect full-year fiscal 2022 cash capital expenditures to total approximately $30 million-$35 million. As of July 31, 2021, we had cash on hand of $43.6 million and $354.6 million of available liquidity under our revolving credit facilities. Our net debt leverage at the end of the quarter was 2.7 times, down from 3 times a year ago, but up slightly from the end of fiscal 2021, principally due to the funding of our Westside acquisition on July 1st. Our balance sheet remains healthy, and our liquidity position affords us ample resources to continue pursuit of our strategic growth priorities. Now, let me turn the call back over to JT before we open the line for questions. Thank you, Scott. We are off to a great start in fiscal 2022. Before making my closing remarks, I'd like to highlight how we believe the second quarter is shaping up. Despite some delays by builders, we expect to see continuing solid demand in residential and for our complementary products. Plus, price inflation is expected to continue across many of our product lines. As a result, we currently expect to generate year-over-year net sales growth for the second quarter of approximately 30%, slightly up sequentially from what we saw this quarter. In terms of profitability, given the expected continuation of pressured price cost dynamics, we expect second quarter gross margin to decline sequentially to around 32%. Meanwhile, we expect continued favorable operating expense coverage, yielding an incremental adjusted EBITDA margin in a range of 15%-20%. Looking further out, we remain confident in the steps we are taking to ensure further and sustained growth. There is fundamental support for continued strength in the residential market, with favorable demographics, historically low interest rates, and low levels of inventories to service the demand. While the timing of the return of larger scale office projects is uncertain, we are seeing favorable activity in other areas of our commercial business. We also expect the current inflationary trends to continue through the balance of this year. Given these dynamics, we intend to remain agile and deploy our resources to align with the highest value opportunities. Moreover, as we stay focused on executing daily in this unique environment, we also remain committed to our four key strategic objectives to deliver value to all of our stakeholders in the long run. GMS is well-positioned now and for the future. Our scale, best-in-class customer service, and entrepreneurial culture set us apart and differentiate us in this market. With a strong balance sheet, substantial liquidity, and a history and expectation of strong cash flow generation, we are squarely focused on servicing our customers and driving shareholder value. Operator, we are now ready for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press * one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press * 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. As a reminder, we ask that you please limit yourself to one question and one follow-up question. One moment, please, while we poll for your questions. Our first questions come from the line of Trey Grooms with Stephens. Please proceed with your questions. Hey, good morning, everyone. JT, Scott, and Carrie, hope you're all well. Good morning. Thank you, Trey. Good morning. I guess first off, could you talk a little bit about the puts and takes around the wallboard volume in the quarter? You point out res being pretty good and non-res continuing to be a drag, but wallboard volume being up 1.5%, if you look at some of the industry manufacturer kind of volume we saw. Granted, I know there's differences in timing and that that's sell-in, not sell-through, in geographic, there's a lot of moving parts. I guess if you could maybe help us unpack that, the wallboard volume in the quarter of 1.5%, the kind of puts and takes. Sure. First of all, on the wallboard manufacturer data, right? You're looking at a Q2 number that included April, that's a little bit different versus our timing. From a purchasing perspective, we feel very like our share is right in line, and we are gearing up for a busier season going forward. On a daily basis, 3.3% is kind of the same story we've been telling, which is very strong residential and weak commercial. We're about 14, 15 months into this pandemic, the larger commercial projects have been pushed. They continue to be pushed. There's a lot of inflation out there, a lot of projects that hadn't started don't really need to start. All that being said, we think that's going to get a little bit better. In essence, you're looking at double-digit residential volume growth and high single-digit commercial volume declines, and that's kind of where we've been through this whole cycle. We're also rolling over, what I would tell you is the previous year quarter on the commercial side, a little stronger because bouncing out of the shutdowns in April, you'll remember that commercial projects that were already going, the May, June, July quarter last year, we shipped a lot of wallboard before it started to decline a little bit again on the commercial side. We kind of have that comp going, too. 3.3% on a daily basis is kind of right in line with where we've been. A slight bit lower possibly because residential also wasn't quite as strong on the volume side as it had been this quarter with a little bit of that hiccup. You heard some of the builders talk about delaying, talk about building differently to try to make sure they understood their costs, et cetera. We felt a little bit of that. At the end of the day, I think we feel like we're pretty much right in line when it comes to wallboard with the market. Perfect. That's what I needed. Thanks for the color there, JT. On the margins, the EBITDA margins are coming along very nicely here. Even despite some headwinds you're talking about on the price cost front, especially around wallboard. With the additional pricing that has been announced in wallboard from some of the manufacturers out there for September, what's your thought around price cost over the kind of more medium term? I know what you guided to in 2Q with the incrementals overall. How are you thinking about that part of the equation when we're looking a little bit further out? I understand it takes some time to kind of catch up with some of this pricing, especially as quickly as we've seen it move higher. Any color around that would be great. I think that I sound like a broken record here now through this price increase period with wallboard. It's 3 to 6 months to get it through the market. I think you can see in our absolute pricing that we're putting it into the market. Again, like I mentioned last quarter, we need to be a good supplier to our customers. We need to be fair with our customers. We're not trying to make our customers absorb costs that they can't pass through on their projects. Here we go again with another September, October price increase. I think we had thought possibly this last one might have been the end of it based upon what the demand situation looked like, plus the fact that there's 4 or 5 of them already in. Here we go again. We'll probably have the same lag, and eventually when all the price increases stop, we'll catch it, and then the margins will normalize in wallboard at that point in time. Yep. All right. Fair enough. I'll pass it on. Thanks for the color. Take care. Thanks, Trey. Thanks, Trey. Thank you. Our next question has come from the line of David Manthey with Baird. Please proceed with your questions. Thank you. Good morning, everyone. J.T., I'm interested in, you made a comment in the slides regarding supplying teams with data to make more informed business decisions. I'm wondering if you could just outline a few of those for us? Sure. We've been investing in FP&A, and Scott brought quite a bit of proficiency in that area with him when he got here, and I'm a big proponent of that as well from my history and background. Done a lot of work internally on our systems to be sure that we can access data after all of these acquisitions over the years, and we've made quite a bit of progress on that. We use Microsoft Power BI, and for our sales teams now, we have a fully functioning business intelligence tool that our sales leaders and our salespeople can access mobily. They can get it on their phone, they can get it on their iPad, they can get it on their laptop. They can really understand their mix of business, their customer mix, pricing situations, margin situations, et cetera, and make more informed decisions. We continue to provide information. We've talked about before our structure as kind of a center-led federated model. Our view is provide the very best information that we can, solid analysis to our teams, and allow the people on the street that are right in front of the customers to make those decisions. Really that's what we're talking about, and pretty excited about the continued improvement in our FP&A group, and the expectation of better information for our people in the field going forward. Just one other example of that, Dave, as well. Operationally, in terms of the use of our fleet, we're now capturing real-time data in terms of essentially the cost of the shipments we're making so we can understand the relative profitability as we go forward, factor that into our pricing decisions, our quoting activities, et cetera. That data is really meaningful. It captures not only fuel, but maintenance costs, logistics costs, all of that, and really gives our operating teams and those who are quoting business a lot more of an understanding of what's going on with regard to the logistics of the business. Okay. Thank you. Second, you outlined the dynamics on the wallboard side in terms of the price increases and then the catch-up that you experienced. Could you share with us any thoughts on steel? I think steel prices have kind of flattened out here. I don't know if structural steel is the same, but could you just talk about that dynamic as we look forward to next quarter, what your expectations are there? Sure. I think that you're talking about rolled coils kind of stabilizing, and we're seeing that as well. We as an industry are still trailing by several months the inflation in the actual raw material that's headed to the formers. We expect another quarter of inflation similar to this one. We've experienced sequentially through the quarter that inflation. It's kind of baked into those numbers we've given you for the next quarter. We think steel, in our particular case, probably has at least a quarter or maybe two quarters left in it, depending on what happens with the raw material from where it is right now. We also, studying that raw material situation and discussions with mills and people familiar with that industry, we don't see a lot of deflation coming anytime soon. Although the eventuality is at some point in time steel will revert to some mean. Perhaps there's a little bit different environment than there used to be in steel as well. For now, it's the next couple of quarters we think is just going to be kind of a continued steady inflation in steel. Very helpful. Thanks very much. Thank you. Thank you. Our next question has come from the line of Michael Dahl with RBC Capital Markets. Please proceed with your questions. Hi, this is Chris Glomb for Mike. Thanks for taking my questions. Just going back to the pricing commentary and your comments on being fair to your customers. Have you seen or are you expecting to see any pushback from price increases given the magnitude that's been coming through the channel? Between your residential and your commercial customer mix, is there any notable variation between pricing power? Well, there's always pushback, regardless, in a price increase situation. I do think that there's some weariness out there in wallboard, for sure. We just keep every quarter we're going out there and having to take additional pricing, and that's very difficult for people to plan with. On the commercial side, it's a little easier because we can quote and quote with escalators based upon the expectation of when that project might be happening. On a day-to-day basis and on the residential business in particular, builder business in particular, they're buying a house every day, right? Multiple houses every day. They've had to try to bake those prices in going forward. That's where it's a little more difficult, and that's where we'll get the majority of the pushback. Again, we'll have to wait and see how this one comes in, and how much pushback there is in the marketplace for it. You asked for the differential. It's a little easier to quote higher prices out into the future for commercial than it is for builder work. Understood. Appreciate the color there. Just for my second question, how much of an improvement, if at all, are you seeing on the product availability side or general kind of supply constraints impacting your business? I mean, the inventory stepped up quite a bit this quarter, but obviously inflation and M&A could be distorting that. Just any color on what you are seeing on that part of your business. Yeah. I think that through the quarter, the situation improved in wallboard. I think there was a little bit of a soft patch in wallboard. There's multiple discussions around it. Did R&R slow down a little bit in the beginning with people going back to work, and that R&R capacity found its way into our channel? There's some discussion around the builders having slowed down a little bit, commercial still being soft. We feel better about wallboard availability for sure. There's still some specialty products that are really difficult. Anything that's glass-based is still very difficult for the whole industry to get their hands on in wallboard. We did go ahead and use our balance sheet and load up in expectation of the quarter, and of course, additional pricing actions as well. We want to make sure we've got the inventory at the right cost for our customers. On the steel side, lead times have stopped extending, but they're still extended. You're still looking at extended lead times in steel today. There's not really a lot of relief in the supply chain in steel. Depending on the other product category, complementary products, insulation is really difficult right now. Lumber has certainly freed up quite a bit, as you can see, and as evidenced by the price of lumber. Insulation, I would say probably call insulation out as still being really constrained. Other than that, our ceilings manufacturer is doing a great job getting those products that we need. Grid has now become available as well as some steel hit the grid producers as well. I wouldn't say anything other than glass products and insulation, those are still acute issues. Steel, I think we're learning to live with 7-10 type week lead times. Understood. It's very helpful. Congrats again. Thank you, Chris. Thank you. Our next question has come from the line of Sam Darko with Raymond James. Please proceed with your questions. Good morning, JT, Scott, how are you? Great, Sam. This is Sam. Good morning. I would like to again reiterate, terrific quarter, especially on the pricing side. Goodness. Couple of clarification questions, if I could. Scott, where's the current wallboard price running for you right now here August, September, versus the $356 average in the first quarter? We ended the quarter at 330. That's the previous quarter. We ended this quarter at $370. Oh, geez. Sorry. Excuse me. $370. We exited $330, and we exited $370. Here in August, I'm guessing it's higher than that? Marginally. We're not at that price point yet, or we're not at the price increase yet, so marginally. Got it. My second quantification or qualification question, the 30% growth that you're expecting in the second quarter, how much of that is organic volumes expected to grow, or are they expected to grow based on the fact that the wallboard and the steel framing volumes are a bit softer of late? Couple three components. You got the volume piece, you got the price piece, and then you got acquisitions. Acquisitions are probably in the ballpark of $70 million-$75 million. The volume piece is relatively thin, and most of it is really coming from price on a sequential basis or sort of on a year-over-year basis. Can I ask where you would see growth in volumes and where you might not see growth in volumes in the second quarter? I think it's still going to be coming from residential. It's going to be the principal driver. We don't expect the commercial side to be coming back, certainly into the second quarter. From a product category standpoint? Well, ceilings and steel are obviously more aligned to the commercial side, so I think that's going to be the driver there. Wallboard is split across the two, so similar to what you saw in this last quarter, where roughly the residential piece was offset by the commercial piece on a one-for-one basis. I'd expect that to continue. Very helpful. Again, terrific print. Very well done. Thank you, Sam. Thank you. Our next question has come from the line of Keith Hughes with Truist. Please proceed with your questions. Thank you. Questions on the ceiling price mix and extremely high here. Was there any specific situation, particularly on mix, that may have made this quarter a little bit of an outlier? Is this something we're going to see for the near term? Keith, you're hitting on something there that's pretty good for us, and I talked about data a little bit earlier as well. Our architectural specialty sales have been very strong, and we've been focused there now for, I think we've been talking about it for well over 18 months. There's definitely a little bit of a mix impact there. Otherwise, it's just your grid, your inflation in grid, and then the higher value tile projects shipping. That can ebb and flow, as you know. The only real strategic change there is we expect to continue to do very well with architectural specialty ceilings. That sounds like share gain for you. Is that what you're saying? It is in that category based on the only public information we have, obviously, there's only one public company that reports there. Of their mix in architectural specialties, we are growing. Okay I would venture to say that if you extrapolate that, we're hoping certainly we're growing our share in that space and anecdotally, everywhere we go and we talk to our sales teams, it would appear that we are gaining some share in architectural specialties. My final question is on complementary products. This has been just a great growth story for you. The organic growth number, is there any way to break out how much of that is volume and how much is price? I know there's a lot of products in there. Is there any sort of feel you can give us on that? Yeah. There's 70%-80% price right now probably, right? Is that what we're saying, Pat? Order of magnitude, I think you're right. There are so many different product lines, so many different SKUs to be able to get at that with any real clarity. On an order of magnitude basis, that's about right. Okay. Thank you very much. Thanks, Keith. Thank you. Our next questions come from the line of Steven Ramsey with Thompson Research Group. Please proceed with your questions. Hi. Good morning. Wanted to get some more color on the SG&A leverage. Very impressive. Maybe can you talk to what's driving that in Q1, what key measures you're taking in the next few quarters to keep this going, if it's a specific discipline or just purely the volume and price leverage driving sales off of the cost base? Most of it by far is the fact that we've got the air cover from a product inflation standpoint covering the product costs. The only real increases we've had are some related to fuel, the incentives that you might find out in the field from a sales comp bonus standpoint, just associated with the performance. Some slight inflationary pressures in some of the operating costs. If you really strip that out, our de-leveraging is actually pretty minimal on an operating basis, which I think speaks to the discipline we're continuing to maintain. Obviously, through COVID, we took some pretty proactive measures, put in place some real discipline on how we're managing the business from an operating basis, and we're keeping with that as we go through this. We'll continue to do that into the second quarter and into the rest of this year. Most of what we're seeing in the ballpark of 270 basis points has really benefited from that product inflation covering our operating expenses. Okay, great. One comment I want to circle back on. You guys discussed pricing fairness to customers. Are competitor actions, do you think, similar to yours in this, or this focus on fairness, is that allowing you to gain some share? Well, over time, I think trying to be the best company we can be for our customer base is always the best thing and will earn us the loyalty that we have in so many cases today. I can't comment directly on whether or not that's matched by our competitors. I think that we have pretty good competitors for the most part out there, and I think everybody is trying to do the right thing in this environment. I don't think anybody wants to take and saddle the contractor with the cost that they can't pass through. In wallboard, that's really the struggle, is how do we get that done and how do we continue to communicate and constantly bring our contractor customer base up to speed on what's happening with wallboard prices. That's where I talk about exhaustion and fatigue a little bit. It gets difficult. We have that fifth, sixth conversation now every other month. It just gets difficult for everybody to have that conversation. I don't think we're doing anything dramatically different in that regard out in the market. I think overall, our philosophy is to do the right thing. You can never go wrong doing the right thing. Something we always talk about, kind of our general philosophy when it comes to running the business. Great. Thank you. Thank you, Steven. Thank you. Our next questions come from the line of Kevin Hocevar with Northcoast Research. Please proceed with your questions. Hey, good morning, everybody, and nice quarter. Wondering if I could ask on the gross margin front. I believe last quarter you guys guided to gross margins being kind of stable sequentially, which I think was 31.5%. You were about two months into the quarter at that point, and you posted 32.2%, so came in well above expectations. I'm curious what changed in that last month that kind of allowed gross margins to come in much better? It seems like the exit rate would be better, but the guidance for the second quarter is that gross margins come down. I'm curious your thoughts there too on what would cause that to then whatever helped this most recent quarter kind of reverse out next quarter. Look, you got a lot of moving pieces going on with regard to gross margin. You got inventory timing, you got commercial timing, mix, commercial realization, et cetera. All those things are constantly moving pieces. I'd say that maybe the principal one that was the difference for our outlook at that time versus now is what's been going on with steel and the dynamics there, and how quickly that inflation has been coming on, and the associated inventory dynamics as you take product out of inventory and ship it. All those kinds of timing kinds of considerations are probably the biggest factor. In large part, we work to try to factor all those things in, but that steel inflation has been pretty high over the course of that time period, and I'd say that was the biggest determinant. Got you. Okay. Just quickly on the inventory front. It looked like they were up 60-some% in the quarter. How much of that is units versus pricing? It's hard to fully nail that down. I can tell you if you look at just the general trends, we're pretty comfortable that we're still staying in that kind of range that we've been talking about, that 17%-18% sort of range, and you'll see a little bit of tick up in the near term here, but that should equalize itself out over the coming months and into the remaining part of this year. Okay. All right. Thank you very much. Thank you, Kevin. Thank you. Our next questions come from the line of Matthew Bouley with Barclays. Please proceed with your questions. Hi, this is Ashley Kim on for Matt this morning. Just going back to the gross margins, should we think about the pricing as offsetting on more of a dollar for dollar basis? Do you expect to eventually get some margin there as well when it flows through? Well, we've always talked about kind of a long-term view of gross margin 32.5, somewhere in that range, right? We're not that far away from what we think is the normal long-term margin for the business on the gross margin side. Could we do a little bit better over time? Possibly, depending on product mix and what we do with our complementary group, for sure. Yes, as you chase it up, when it levels off, we would expect it to begin to catch up a little bit as it levels off and we get it out into the marketplace in Wallboard. On the other side, on steel, to Scott's point, we've done a fantastic job. Our team in the field has done a fantastic job of communication with the customer base to ensure that they understand what's happening and that we price products appropriately. On the steel side, we're already kind of approaching what I would say is that peak, as it was mentioned earlier, with steel raws kind of leveling out. You could have the opposite impact there as well. I don't want to give anybody any kind of indication that the long-term gross margins at the moment, based upon what our product mix is and our strategies are, is going to be much above 32 and a half. I do think there's other parts of the business that we can continue to work on. We've talked about that longer-term EBITDA goal being north of 10%. Of course, we're there right now with some unique circumstances, but for a full year above 10%, I do think we're on our way to being able to do that. Okay. Can you just speak more about your progress on e-commerce? Has it had any notable efficiencies, just given the constrained supply chain backdrop that we're seeing today? I'll talk a little bit about e-commerce. Kind of our strategy is to automate the relationship that our customers have with us today, from order entry, if they'd like to, all the way through payment. In the middle, there's a lot of noise in the middle that goes on with phone calls and emails about where's my order, has it been delivered, et cetera. That automation is all happening now. We're getting a lot of uptake in the use of that middle portion, and then also in the payment of bills. That part of e-commerce is coming along really well. Order entry itself, we continue to hear from our customers that they're happy to send us a PDF or they're happy to generate an automatic purchase order because that's what their systems do, and they're not really very interested in going in and rekeying that order. The smaller players are certainly interested in doing some of that, but the larger players certainly are not. The larger players are absolutely using the system now to manage their account with us. We're seeing that get better and better every month. Okay. Thanks for the color and congrats on the results. Thank you, Ashley. Thank you. There are no further questions at this time. With that, we do appreciate your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day.