Greetings and welcome to the Installed Building Products fiscal 2023 fourth quarter financial results call. 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. I would now like to turn the conference over to your host, Darren Hicks, Managing Director of Investor Relations for Installed Building Products. Thank you. You may begin. Good morning and welcome to Installed Building Products fourth quarter 2023 earnings conference call. Earlier today, we issued a press release on our financial results for the fourth quarter, which can be found in the Investor Relations section of our website. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on management's current expectations and beliefs. These statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those described today. Please refer to the cautionary statements and risk factors in our SEC filings, including our annual report on Form 10-K. We undertake no duty or obligation to update any forward-looking statement as a result of new information or future events, except as required by federal securities laws. In addition, management refers to certain non-GAAP and adjusted financial measures on this call. You can find a reconciliation of such measures to the nearest GAAP equivalent in the company's earnings release and additional reconciliation for EBITDA and adjusted EBITDA for earlier fiscal years in our investor presentation, which are available on our Investor Relations section of our website. This morning's conference call is hosted by Jeff Edwards, our Chairman and Chief Executive Officer, and Michael Miller, our Chief Financial Officer, and joined by Jason Niswonger, our Chief Administrative and Sustainability Officer. I will now turn the call over to Jeff. Thanks, Darren, and good morning to everyone joining us on today's call. As usual, I will start the call with some highlights and then turn the call over to Michael, who will discuss our financial results and capital position in more detail before we take your questions. IBP improved both sales and profitability in the fourth quarter, helping IBP achieve another year of record financial results, including record revenue, net income, and Adjusted EBITDA. I'm proud of IBP's performance in 2023, as installation sales growth in our multifamily and commercial end markets more than offset softer single-family sales growth throughout the year. Our installation teams worked efficiently to optimize the value we provide to our customers, with each completed job driving record annual net profit and Adjusted EBITDA margins in 2023. The talent and commitment of our employees, combined with the strength of our business model, enabled the company to once again reach new heights in 2023. Throughout 2023, our acquisitions contributed positively to our financial results. We invested approximately $60 million in acquisitions while returning nearly $70 million to shareholders through dividends and share repurchases. I'm pleased to report that for the 2024 first quarter, our Board of Directors has approved an increase to our regular quarterly cash dividend by 6% and declared an annual variable dividend of $1.60 per share, representing a $0.70 per share increase over last year's variable dividend. On February 12, 2024, we celebrated the 10th anniversary of our public offering by ringing the closing bell at the New York Stock Exchange. Since our IPO in 2014, net revenue, net income, and Adjusted EBITDA have grown at compound annual growth rates of 21%, 37%, and 31% respectively. During this period, we completed almost 90 acquisitions, expanding our footprint across the United States and diversifying our revenue to additional end markets and product categories. As a result, IBP has transformed from a regional installer of insulation to one of the largest installers of building products in the country. The success of our growth strategies, combined with our disciplined approach to capital allocation, has created significant value for our shareholders. The credit for our accomplishments goes to the hardworking men and women across our roughly 250 branches throughout the United States and those who support them from our office in Columbus, Ohio. To everyone at IBP, thank you. As we continue to focus on profitable growth, we remain committed to doing the right thing for our employees, customers, communities, and shareholders. During 2023, we acquired eight companies with combined annual revenue of approximately $75 million, further expanding our product offering and geographic presence. We expect to acquire at least $100 million of annual revenue each year, however. Acquisition timing is unpredictable, and certain acquisitions may change from their intended closing dates within a given calendar year. During the 2023 fourth quarter, we completed two acquisitions, including a North Dakota-based installer of fiberglass and spray foam insulation in multifamily, residential, and commercial customers with annual revenue of approximately $2 million, and a Florida-based installer of a diverse mix of building products to new residential construction projects in the Orlando market with annual revenue of approximately $16.5 million. Overall, the residential housing market continues to be resilient, as relatively low existing home inventory levels have led to a higher percentage of new construction home sales relative to historical averages. Additionally, an elevated volume of multifamily units under construction continues to be supportive of our installation business. We believe we are well-positioned for another year of strong operational and financial performance in 2024, as we continue to focus on profitability and effective capital allocation to drive growth. Longer term, we believe that housing demand will continue to grow, and the insulation installation industry has favorable opportunities ahead, including demand driven by the Inflation Reduction Act of 2022 and the Bipartisan Infrastructure Law, which are intended to improve energy efficiency in residential homes. IBP's strong customer relationships, experienced leadership team, national scale, and diverse product categories across multiple end markets will help the company navigate future changes in the U.S. housing market. I'm proud of our continued success and excited by the prospects ahead for IBP in the broader insulation and other product installation business. So, with this overview, I'd like to turn the call over to Michael to provide more detail on our fourth quarter financial results. Thank you, Jeff, and good morning, everyone. Consolidated net revenue for the fourth quarter increased 5% to $721 million, compared to $687 million for the same period last year. The increase in sales during the quarter was driven by higher multifamily and commercial sales, which was partially offset by softer single-family sales within our installation segment. As we evaluate our performance on a YoY basis, the exceptional growth our company experienced in 2022 set difficult comparisons this past year. Also, rising interest rates and the decrease in single-family housing units under construction were headwinds to our revenue opportunity in 2023. According to the U.S. Census Bureau, in the fourth quarter of 2023, the housing units under construction, the sales pipeline for our installation services, showed single-family units were down 12% YoY, while our single-family same-brand sales were down 7%. In the multifamily end market, industry units under construction were up 8%, while our multifamily same-brand sales were up approximately 30%. We are pleased with our performance relative to the market opportunity. Our focus on efficiency and job optimization led us to achieve record fourth quarter profitability, as measured by adjusted gross profit margin, adjusted net income margin, and Adjusted EBITDA margin. As the inflationary environment began to normalize in 2023, our ability to compete based on service and provide value to our customers helped to support a 240 basis point improvement in adjusted gross profit margin to 34.1% in the fourth quarter relative to the same period last year. Adjusted selling and administrative expense, as a percent of fourth quarter sales, was up 160 basis points to 18.3%, due primarily to higher insurance and variable compensation related to higher gross profit and EBITDA performance from the prior year period. Despite a higher adjusted selling and administrative expense ratio in the fourth quarter, adjusted net income margin improved to 10.7% from 10.1% in the prior year period. Adjusted EBITDA for the 2023 fourth quarter increased 11% to a fourth quarter record of $128 million, and adjusted EBITDA margin reached a fourth quarter record of 17.8% compared to 16.8% for the same period last year. We continue to target full-year long-term same-branch incremental adjusted EBITDA margins in the range of 20%-25%. For the 2023 full year, total same-branch incremental adjusted EBITDA margins were substantially above our target range. Although we do not provide comprehensive financial guidance, based on recent acquisitions, we expect first quarter 2024 amortization expense of approximately $10.5 million and full-year 2024 expense of approximately $40.9 million. We would expect these estimates to change with any acquisitions we close in future periods. Also, we continue to expect an effective tax rate of 25%-27% for the full year ending December 31st, 2024. Now, let's look at our liquidity position, balance sheet, and capital requirements in more detail. For the 12 months ended December 31st, 2023, we generated $340 million in cash flow from operations, an all-time annual record, compared to $278 million in the prior year period. The YoY increase in operating cash flow was primarily associated with higher net income and effective management of working capital. During the fourth quarter, interest rates increased YoY, but through interest rate swap agreements, we have fixed the interest rate on $400 million of our existing variable rate debt until December 2028, limiting our interest rate exposure. We have no significant debt maturities until 2028. Our fourth quarter net interest expense decreased to $7.8 million from $9.9 million in the prior year period due to the term loan repricing in August 2023 and the higher rate of interest we earned on cash and cash equivalents invested throughout the quarter. At December 31st, 2023, we had a net debt to Adjusted EBITDA leverage ratio of 1x, compared to 1.5x at December 31st, 2022, which is well below our stated target of 2x. At December 31st, 2023, we had $337 million in working capital, excluding cash and cash equivalents. Capital expenditures and total incurred finance leases for the year ended December 31st, 2023, were approximately $65 million combined, which was approximately 2% of revenue, roughly in line with the same period last year. With our strong liquidity position, asset-like business model, and modest financial leverage, we continue to focus on expanding through acquisition and returning capital to shareholders. Our goal of acquiring $100 million of annual revenue each year is unchanged. IBP's Board of Directors approved the first quarter dividend of $0.35 per share, which is payable on March 31st, 2024, to stockholders of record on March 15th, 2024. The first quarter dividend represents a 6% increase over the prior year period. Also, as a part of our established dividend policy, today we announced that our board has declared a $1.60 per share annual variable dividend, a $0.70 per share increase over the variable dividend we paid last year. The 2024 variable dividend amount was based on the cash flow generated by our operations, with consideration for planned cash obligations, acquisitions, and other factors as determined by the board. The variable dividend will be paid concurrent with the regular quarterly dividend on March 31st, 2024, to stockholders of record on March 15th, 2024. We are committed to continuing to grow the company while returning excess capital to shareholders through our dividend policy and opportunistic share repurchases. The Board of Directors authorized a new stock buyback program, which expands our repurchase capability to $300 million of our outstanding common stock, up from $200 million in the previous program. The new authorization replaces the previous program and is in effect through March 1st, 2025. With this overview, I will now turn the call back to Jeff for closing remarks. Thanks, Michael. I'd like to conclude our prepared remarks by once again thanking IBP employees for their hard work, dedication, and commitment to our company. Our success over the years is made possible because of all of you. Operator, let's open up the call for questions. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd 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. In the interest of time, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Susan Maklari with Goldman Sachs. Please proceed with your question. Good morning, everyone, and congrats on a great quarter. Good morning. Thanks, too. My first question is, if we think about 2023, you saw some really nice price mix that came into the business despite all the headwinds that you had in there. As you think about the outlook for 2024, how are you thinking about the setup there? Can you talk just generally to the different moving pieces and any thoughts on price specifically as the manufacturers perhaps look to offset some ongoing inflation? Sure. This is Michael. Yeah, our view really hasn't changed very much as it relates to price mix going into 2024. If you take out the high inflationary period that we experienced in 2022, and really that was partially in 2021, 2022, and still catching up a little bit coming into 2023, we really have consistently run price mix at sort of a mid to low single-digit pace, and that's consistent with our expectation of sort of a fairly benign inflationary environment across the products that we install. So there's nothing that we see right now that would change that. I mean, material, particularly fiberglass, continues to be tight. We believe that as we progress through the year, in the back half of the year, that the material might loosen up a little bit, but that also depends a lot on what happens with the single-family market, which we currently feel very constructive about. Well, and loosen up is a relative term. I mean. Very relative. No, we're still not without, even as recently as third and fourth quarter of last year, at times having to kind of go fend for ourselves based on how tight the market is. So it's healthy in that regard. Yeah. Yeah. The market feels very comfortable in terms of I mean, things are tight. There's always unique challenges, but given the backdrop that we see in single-family and what we're hearing from not just the fiberglass suppliers, but all of our suppliers, we're very encouraged. Okay. All right. That's helpful color. Then turning to the incremental margin, it was obviously really impressive last year as well. As you think about the operating conditions and the setup over not just even 2024, but just looking further out, what would you need to see to give you confidence to raise that range or to change where you think the business can fundamentally operate? How do you think about the different puts and takes to that? Well, obviously, we performed well above our targeted incremental margins this year. There was definitely some I don't want to say unique, but factors that contributed to that. I mean, if you look on an annual basis over the course of the past couple of years, I mean, both 2022 and 2023 were very solid incremental margin, same-branch incremental margin years for us. And we feel very good going into 2024. And obviously, we don't provide guidance, but we're feeling good that we will continue to have above the top end of the range incremental margins when we look back this time next year. Okay. All right. Thank you. Good luck with everything. Great. Thank you. Thank you. Our next question comes from the line of Stephen Kim with Evercore ISI. Please proceed with your question. Yeah. Thanks very much, guys. Good results. Wanted to ask you a couple of longer-term questions, if I could. The commercial business was very strong, had a nice year of growth here. You talked about a management change last quarter that you'd made there, and was wondering if you could give us a little bit of an update on that, and in particular, how that positions the commercial side of your business for growth as we look ahead and over the next couple of years. Is what we saw in 2023 kind of representative, or is that sort of kind of a one-off kind of a year? That's the kind of color that I was looking for. Sure, Stephen. This is Michael. Thanks for that question. We are extremely proud of what was accomplished in the heavy commercial business, particularly the heavy commercial business, not just the overall commercial business this year. It really was a year to sort of stabilize that business and start bringing it back up to acceptable margin levels. I would say that it's still not at company margins, and we believe there's still room for improvement. But just to give you a sense of the benefit we've received from the heavy commercial business in the year and in the quarter, they actually added roughly 100 basis points in gross margin improvement to the overall business. So the good news is that they did that. The bad news is they came from such a low point to get to where they were. But we do not think that that's transitory, and that's sustainable. So that benefit will remain, we believe, as we continue to go through 2024. Now, we do not expect that we'll see as strong of a sales growth in the commercial business, particularly in the heavy commercial business, in 2024. But what we're really managing towards in that business is continuing to maximize profitability and getting the margins up closer to company averages. And we would much rather have that than sales. And this, Jeff, but we made—I mean, just to be clear—we made the change in the leadership of that business line not last year, but the prior year. But I mean, these are long-duration contracts in a lot of cases, some of which we were suffering through kind of the hyperinflation in bids that wouldn't allow us to improve kind of our pricing in that regard. But it's also just a change in mentality, to Michael's point, in terms of driving for profitability as opposed to sales. Now, the fact that it's been fixed doesn't mean we're going to crawl back in our shell, as a matter of fact, though, and I think we could go back to growing the business. Yeah. I definitely see it as a great opportunity in 2024. I mean, as we look across the business and what we call the end markets, I mean, we believe that through 2024, the greatest opportunity for organic growth will be the single-family market, right? But now, I want to back that up a little bit and just say our multifamily backlogs continue to be very strong, extremely strong. While we would, at a macro level, expect the multifamily starts to come down fairly significantly, call it 12%-13%, from 2023, we have a lot of confidence around our ability to continue to take market share and continue to perform on the existing backlog that we have such that we continue to perform much better than the market opportunity on the multifamily side. But single-family, clearly, as everyone is talking about, there's just tremendous potential there this year. Yeah. So I think that all makes sense. So switching to the resi- side of your business, multifamily, the backlogs being very strong, I think you had previously said you expected that to sort of be a driver to your business all throughout 2024 pretty much. Can you talk about the margin profile there? I mean, obviously, the margins have been extremely strong. Your margins in the quarter and the year were strong and kind of above, I believe, what you had sort of said was your sort of a long-term outlook for gross margins of 30%-32%. You're running well above that. What's curious is if we would what you would attribute that to, is that something where you still feel 30%-32% is the right range, or maybe given some things that you've seen, we could scoot that up a little bit? Just trying to get some color on your outlook for gross margins, whether it's changing, maybe going up a little higher, and whether multifamily is playing a role in what we're seeing right now? Yeah. That's a great question. I would say that we are definitely encouraged that the gross margin improvement has been solid. There's no doubt, though, that as we expect to happen and certainly has even happened in January, as we get higher growth rates from the production builders, the big national builders, which is great business - we love that business, and we saw good growth with that in January relative to the regional and local guys - we would expect that that would put pressure on gross margin. Ultimately, the EBITDA margin contribution is similar. In terms of overall on the gross margin side, the team has done a phenomenal job of really focusing on providing as much customer value and service as possible to enhance profitability across the company. So as we look at the business, particularly through 2024, and if I look at, say, the fourth quarter of 2023, I mean, we've been able to work very hard to get the multifamily margins up because historically, several years ago, they would have been a drag on margin. Our team has done a great job of not having them be a drag on overall margin. And the other thing that helped us, particularly in the fourth quarter, is that while the rate of growth was better for the insulation products than the other products, the other products, which we've talked about several times, do have lower margins than insulation, but their margin improvement was considerably better than the margin improvement in insulation and, as a consequence, was a benefit to gross margin. Again, we don't think that's transitory either and that that's sustainable. It definitely makes us feel confident around the gross margin being closer to 32 than 30. If I could just follow up there, these non-insulation products, the margin improvement, you think it's sustainable? Can you give a little more color or some examples of sort of what drove that and why it's sustainable? I think there are several things. It's the inflationary environment becoming more benign, the availability of material becoming more normalized. And honestly, I mean, we say it a lot, but it absolutely is true. It's the performance of the team. I mean, our field team has executed so effectively in times that have been very difficult. When we think about what's happened over the past couple of years between COVID, the supply disruptions, this year, the challenges that single-family presented that we're all well aware of, I mean, the team has just done an outstanding job. And their focus on profitability, we believe, is reflective clearly in the numbers. Great. Thanks so much, guys. Thank you. Our next question comes from the line of Joe Ahlersmeyer with Deutsche Bank. Please proceed with your question. Hey. Good morning, everybody. Thanks for taking the question and congrats on the results. Thanks. I'm trying to think through where to expect the most strength in YoY sales growth within single-family for the year. Maybe if you could just talk about what you've seen in starts in the fourth quarter and into January in the data, how you maybe expect that to come to your stage of construction, right, the insulation part. And then also in the context of what the comps were last year, I think you've previously spoken to 2Q being maybe the easiest comp. So maybe it might take into the second quarter before we really see single-family start to expand YoY. Yeah. This is Michael. I think that's right. Although what I would say is that as we've just started the year, obviously, but it is starting to play out exactly as we would have expected in the sense that we're seeing because if you look at the products that we install on the residential side, generally speaking, insulation is the first thing that we do. And then the other products, some come after what we call after paint, right, so after the house has been painted. So those are much later in the cycle. So what we expect to see in certainly through the rest of the first quarter and going into the second quarter is that we'll see better sales opportunity, if you will, on the single-family side in insulation, where we'll see weakness from a volumes perspective is going to be in the other products until those later cycle installed products come in more towards the back half of the year. So the year, from the single-family perspective, is starting to play out exactly as we would have expected it to in terms of the improvement that we're seeing with the big national builder sales relative to the regional and local guys. And then the insulation revenue is starting to improve at a better rate relative to what we're seeing in the other products. As we do our planning for 2024, we always start sort of with a macro forecast for single-family and multifamily. And our expectation is that single-family starts are going to be in that $1-$1.1 million, $1-$1.1 million range, which would represent sort of mid-single-digit growth in single-family. We do believe that that growth is going to be weighted more heavily, much more heavily, towards the big production builders, which is why we made the comment about the impact on gross margin in the answer to the previous questions. And then on the multifamily side, we think that starts are going to probably be down 12%, maybe 15%. It's roughly 400,000 or so. But again, as we said, we feel very good about our backlog, what the team is doing there. One of the things that our multifamily team is doing is really expanding the cross-sell of the other products, not just insulation. That's really helping support our confidence around their ability to grow above market in that end market for us. Yeah. A lot of good detail in there and good callout for the CQ guys down in Florida. Maybe if we could pivot to price in the early part of the year here, do we think that maybe the exit rate for 1Q is reaching that full realization of the price increase? And are you seeing better support for pricing from the labor tightness or from the material conditions, tightness conditions? Thanks. Both. Yeah. Definitely, it's both, as is always the case. It's always been, I mean, when it's announced material price increases, as everyone on this call can appreciate, there has been, and the market has taken a price increase. Generally speaking, people are stronger around that because the labor inflation and labor tightness is a constant always there. But clearly, our ability to show up on time and perform is a function of our ability to attract, retain, and train labor. Appreciate it. Thanks, guys. I would say that all, just to add to it, I mean, it takes a very long static market for there not always to be some degree of kind of price-taking going on. It just does based on length of contract, based on number of customers, based on type of product we're doing, and everything else that the further we get away from an increase in a healthy environment like this, kind of the better conditions are for it to be kind of real normalized for us. Yep. Makes sense. Thanks a lot. Sure. Thank you. Our next question comes from the line of Ken Zener with Seaport Research Partners. Please proceed with your question. Good morning, everybody. Morning. Morning, Ken. So Michael, you said if single-family starts are at mid-single, probably positive after 2Q. I believe you said you have confidence that when you look back on this year, operating leverage is going to be above the high end of your long-term range. Did I hear you correctly? I didn't say above. I just said that it was going to be closer to 25 than 20. Okay. Thanks for the clarification. So what gives you that confidence that you're not going to be going to Home Depot? Is it from really just what you're seeing from the public builders or the fact that we're just going through this base, or is it the fact that commercial isn't this risk factor that it was in the past? That's a fairly bold statement for you guys, I would say. Yeah. But it's really all of the above. We feel good about what we're starting to see, and it's just starting. So we think that we feel the full benefit of the single-family recovery in the back half of the year. But we were very pleased to see the strength in the national builder business in the start of this year, right? So we feel good about that. We feel good about the backlogs in the multifamily business. We feel good about the progress we're making on the other product margins because, as we've talked on several calls before, they can weigh on margins, and they impact price mix, disclosures, all that kind of stuff. So those are good. What are you feeling bad about? To be honest with you? We'll make no mistake. We still go to Home Depot occasionally. I mean, but it's already building the numbers from last year, right? So it won't be worse. It'll be better, right? And it could be a trucking issue, right? So you just never know, right, things like that. But I'll answer what we think about it. I'm rock-high on that one. No, but honestly, Ken, I mean, when we look at the backdrop right now and we look at. It's good. It's good. It is good. I mean, I think. Hey, Jeff. Looking back when you started the business, I believe in 1977, Edwards Insulation, I'm starting to think that the parallels are very similar in the sense that, as Michael is saying and you guys agree with, things are good. They're not bad. The idea of disinflation from the current levels, we're not seeing it in your material inputs. We're not seeing it in your labor. What can you share some of your broad thoughts about when the economy's this strong and you're running so many different operations? Just give us some of that perspective that you might have, if you recall it, from what was an inflationary period when you started the business and how that might impact concerns you have separate from what Michael's addressed? Okay. So let's be clear. I was 14. In In 1977, I was actually my cousin. So I don't want anybody listening to the call to get scared because they'd be wondering how old I was at this point and when retirement days were coming up. I'm 61. But I remember some of those times. But I would say that having grown up around a father that was in the real estate business and myself that was in the real estate business and this business for the last almost 40 years, I think all of us would look at this environment and say, "It's pretty healthy." In fact, I was on a call for a different matter this morning. This is the first year in three or four where we weren't really worried about something at this point in time in the year, whether it was a doubling of interest rates, whether it was a pandemic, whether it was an impending recession, whether it was material supply issues, you name it. Yeah. Does that run counter, though? I mean, you guys are operating your business well. And Michael, if you could quantify the kind of drag over the last couple of years we've seen from commercial, you talked about 100 basis points lift this year. It'd be nice to have some kind of context if you could provide that. But it is interesting. I think you guys are in a very unique position capturing price and labor, right? We can see your forward curve of demand. So you guys are special. But it does raise questions, I think, for people's expectations around monetary policy because things are so good. That's it. Yeah. I think that's true. I mean, clearly, none of us know what the Fed's going to do. I think the market has been extremely resilient as it relates to rates and the builders' ability to buy down rates. And I think they've been, particularly the national builders, that obviously have a capital advantage over the regional and local guys. We've been very surprised. I mean, I think Jeff said it perfectly, is that if we look back for the past three or four years, at this time of the year, we've always had something we were facing that felt like a wall. And we don't have a wall right now. In the business and elsewhere. I mean, so that's not to discount some of the geopolitical things that are going on now. We're in two wars, and we've got a messy political situation and an election coming up, right? But business-wise, things feel as good as they have in a while. We feel really good about the things we can control. Right. Thank you. Thank you. Our next question comes from the line of Mike Dahl with RBC Capital Markets. Please proceed with your question. Hi. Thanks for taking my questions. I guess just if I listen to the comments that you just made, the comments about the incrementals, comments about improvement in margins, in particular in the heavy side, which should persist, I appreciate the public builder mix, or I think I do. Maybe it comes down to you can explain order of magnitude to us. But I guess it's still not entirely clear why your gross margins would come down as meaningfully in this environment as to get back to the 30%-32%. So maybe you can elaborate on how big of a mix impact the public builder dynamic will be. I mean, if it shifts a little bit in terms of product mix, it doesn't seem like that's really going to drive enough or I don't know, just how it seems like the margins are going to stay above what you're articulating. Well, keep in mind that we are over-indexed in the single-family business to production builders, as you would expect, right, just given our scale, size, and ability to service customers of that size. And the pricing to those builders tends to be much tighter given the efficiency and cost to service those builders. It's great work, but it definitely impacts gross margins. And our belief is that you're going to see if let's just say there is a mid-single-digit growth in single-family, we wouldn't be surprised if 80%-90% of that comes from the national builders. So our overweighting on that then just continues to overweight to those builders. And again, the gross margin on that work is much tighter. So we definitely think it's going to have an impact there. But that's from our perspective. It's expected. It's great work. And I'd say bring it on. Okay. Yeah. I mean, look, no doubt the publics are outgrowing. But I think if you look at the public builder commentary, they're only guiding to deliveries, kind of mid-single digits to high single digits. So if the market's up mid-single, it doesn't necessarily seem like it's going to be that big of a shift. But I hear you. In terms of the Multifamily dynamics, if we look at permits, Multifamily permits are down north of 20% on a rolling 12-month basis. And you're certainly starting to see that come through in the start. So when you talk about the down 12%-15%, I guess just to clarify, is that your opportunity, given you think you can take share against that? Is that your specific market exposures may be down less than that, or is that truly a market view? Yeah. That's a macro outlook for the entire market, not certainly specific to us. But we do believe that you're seeing and assuming there's a lot of assumptions in there, particularly that you're going to see the Fed at some point during the year reduce rates. But some of the dynamics for if we think about our perspective when we were in the third quarter going into the fourth quarter, the headwinds in multifamily were fierce, to use a very technical term. And when we're sitting here now, some of those headwinds have definitely subsided relative to multifamily. And we think there's going to be a more constructive environment for multifamily in 2024 than we would have expected three to six months ago, given the headwinds that multifamily was experiencing. I guess we're not as negative on multifamily as everybody else is. Well, and you mentioned it earlier. It's partly we say take share, which is accurate in some ways. But it's almost like if you refine the way we're saying that to say what we're really doing is we're entering either product lines or entering markets that we're not in. I mean, this isn't us taking share necessarily in a market that we're in. This is just us beginning to offer the kind of CQ services and a lot of the other things we install in markets and on jobs that we previously didn't do so, right? Right. Exactly. Okay. Appreciate your thoughts. It's not we're in there and we're with sharp elbows all the time. It's us kind of coming to them with what we believe. It's one of our original premises. And that is that we think that general contractors and builders would rather deal with fewer subs to get these greater number of nuisance products done. And that's true for multifamily general contractors/developer, just like it has been, we believe, rang true with all of our builders over the years. Okay. Great. Thank you. Thank you. Our next question comes from the line of Mike Rehaut with JPMorgan. Please proceed with your question. Hi, guys. Doug Wardlaw on for Mike. Obviously, you guys are very constructive about single-family, as are your suppliers, and very positive for it for the upcoming year. I'm just curious, in terms of your acquisition strategy, has the kind of positivity and optimism in the market changed how you're looking at kind of your criteria for acquisitions? Has it changed kind of what the pipeline has looked like thus far? This is Jeff. So I will say, as always, that the pipeline is robust. I would say that whereas we would have had more or less an internal, at least, likely either suspicion or prohibition on commercial acquisition, I think our attitude as we fixed kind of what we've fixed over the last couple of years, I think we would alter our stance at this point and say that the market for commercial acquisition to us is now, at this point, kind of opened up. So I would say that that's really an additive component. We'll continue, for the most part, let's say, to play within the spaces that we have historically. As you know, we made a distribution acquisition a number of years ago that's performed very well. So that's not a space, again, that we're by any means afraid of and could continue to potentially look in that direction. And not long ago, too, we acquired a business that, as at least a component of their business, was more on the industrial side of kind of the insulation install side of things. So as long as it kind of involves material purchase and a labor component, and it's a product that we could install, typically by direct, that continues to be on kind of the watch list. Yeah. And this is Michael. I just wanted to clarify a couple of other questions just to be clear. When we're thinking of incremental margins on same branch, incremental margins on a full-year basis for 2024, we still believe that incrementals are going to be in that 20%-25% range. But just given the confidence that we have in all the things that we've talked about on the call so far, it's reasonable to assume that we're going to come in a little bit closer to 25 than we would closer to 20. Thank you. Our next question comes from the line of Adam Baumgarten with Zelman & Associates. Please proceed with your question. Hey, guys. Thanks for taking my question. Just maybe thinking about weather impact potentially in January, just as we think about the first quarter. I know you guys don't guide explicitly, but sort of what you're seeing there and if that's going to have any material impact? Yeah. That's a great question. I really appreciate you asking it because in January, we did lose days in January, for sure, to the weather, really, across the country. California has obviously had an unprecedented amount of rain, which is big operations for us here in February. We still feel good about the first quarter and our performance there. We would expect to see the typical seasonal decline from fourth quarter to first quarter in the first quarter. That's been typically sort of a mid-single-digit sort of decline from fourth quarter to first quarter. That definitely has been impacted by January, which was definitely weather-impacted. All of the things that we're talking about in terms of the strength of single-family, the continued performance of multifamily in the commercial business, those all weaken in the first quarter. As you all know, that's typically our weakest quarter, both from a sales and a profitability perspective. We would continue to expect that. The real benefit from this shift in single-family, just giving the timing between start to when we do our install work, is really going to be a second quarter, back half of the year opportunity for us. But that being said, we were very encouraged to see what was going on with the national builders in January, despite the weather. Okay. Got it. Thanks. And then just some heavy commercial I think you talked about growth moderating in that business. Do you still expect growth in 2024 on an absolute basis? Yes. Okay. Thank you. Sure. Thank you. Our next question comes from the line of Keith Hughes with Truist Securities. Please proceed with your question. Thank you. Questions, really, about product availability. Could you just talk near-term what you've been seeing? And do you anticipate any potential shortages, particularly as single-family kicks into gear later this year? I mean, it's tight. It's It's Jeff. Excuse me. It's tight. It's not the way it was the last and then it got a little better last year even, too. But I think as we'll get through it. Let's just put it that way, right? And as you know, Keith, we're only maybe four months away or so from a little bit of supply getting added. There's always stuff that can happen. I mean, there was a brief issue with the plant here recently. I think they're back up and running. And so it's tight. I mean, it's kind of, in some ways, healthy tight. And really, a lot of times, it's a SKU that's not available that throws off that would cause us to buy out of distribution, let's say, or Home Depot, Lowe's. A lot of times, it might be the way in which an order got composed. We're missing one SKU. We were that tight or afraid we got a freight issue or something else. But I think that we should be in a pretty good shape. That's both an industry and ourselves. Yeah. And Jeff makes a very important point here relative to the SKUs or the type of insulation that's being required. This shift to more of the production builder business is very good for material availability because they are very standard in terms of what gets installed. So it's very regular-weight product. When we're doing a lot of custom work and multifamily work and some of the light commercial work that we're doing, those tend to be less standardized products. And they need to be more customized made. And their availability is less. So the fact that we're going to have the highest efficiency products for the manufacturers as this happens, we believe, is good for material availability. Yeah. And at mineral wool, as an example, it's six months out. But you got to plan that way. Yeah. Right. Right. Okay. That's all I had. Thank you very much. Okay. Thanks. Thank you. Our next question comes from the line of Reuben Garner with The Benchmark Company. Please proceed with your question. Thanks. Good morning, everybody. Good morning. Good morning. I hate to beat a dead horse, but kind of a follow-up on the gross margin outlook for this year, I guess that would imply some pretty material leverage on the SG&A front. Can you just kind of talk about the mechanics there? Do we see that on the selling expenses line? Will you get more leverage just on admin expenses in general? And that'd be a couple few hundred basis points to kind of offset the gross margin headwind. Am I thinking about that the right way? Yeah. It's a combination of selling expense, primarily commissions. I assume what you're asking about is the shift to the production builders away from that they're at a higher growth rate than the others, correct? Correct. Yep. Yeah. So it's a combination of branch administrative costs that we leverage and primarily selling commissions that we leverage, so SG&A. Okay. And then last year, the Inflation Reduction Act, there was some talk about it, but it didn't seem to really have a material impact. We've kind of heard recently that maybe that's starting to get some traction at the state and local level. Any updated thoughts there? Are you hearing builders looking to take advantage of that in a bigger way? Or maybe is that still kind of far out from having a major impact? I mean, it's having an impact, but I would say not a major impact. It's still slow. I mean, getting the construction industry to change practices is not a quick thing. It takes a lot of time and a lot of effort. But I mean, we believe, ultimately, particularly as we look at the opportunity for insulation and the energy efficiency benefits associated with insulation, that long-term, the trend there is extremely constructive for us and the industry. Fair enough. Thanks, guys. Congrats on the strong close of the year. Good luck in 2024 and, Jeff, see you next week. Sounds great. Thank you. Our next question comes from the line of Philip Ng with Jefferies. Please proceed with your question. Hey, guys. Consensus is calling for housing starts to be kind of flattish for the full year because they're calling for multifamily to be down, single-family to be up, call it mid-single digits. Michael, if I heard you correctly, you're expecting multifamily to be up because of the share gains and you're over-indexed to the public builders. You referenced mid-single digit volumes a few times. Is that a good bogey in terms of thinking about your growth profile? And maybe even perhaps it comes in stronger given your exposure. Yeah. Just to clarify on that, we definitely expect that multifamily starts are going to be down. And so if you think of, say, single-family in the $1 million-$1.1 million range and multifamily around 400,000, right, I mean, that basically is flat to what happened last year for starts at $1,420,000 or so. So we are aligned with that flatness, if you will, in total starts because single-family will be better, we think, at single digits. And multifamily will be down double digits, basically. Now, that's the macro environment. We believe, based on our backlogs and what we see, that we will not be down in multifamily. And we will continue to see solid growth there, maybe not as good as we've experienced over the past several years and several quarters. But we believe we will continue to experience growth in 2024 in the multifamily business. So on balance, is mid-single digits volume growth for you guys a good way to think about your profile? And if I heard you correctly, it might still be down in 1 Q, maybe it affects positively. That's kind of the build-out of the shape of the year? Yeah. That's right. I mean, obviously, there are a lot of things that depend on that. We think that volume growth comes primarily from the national builders. Okay. That's helpful. I think, thinking bigger picture, I couldn't help, Jeff, Michael, how constructive you guys are on single-family longer term and certainly this year as well. Certainly, we saw some bottlenecks during the pandemic when we had explosive starts. And there were certain bottlenecks. Those have alleviated quite a bit. But insulation supply is still fairly tight. When we look at 2025 and beyond, how challenging will that be? And do you think you're going to still see pretty steady growth? And not to say that's a bad thing for you guys. It's been actually pretty good overall from cash flow earnings. But just kind of help us think through, when we look at 2025 and beyond, your ability in an industry to service some of that demand. Well, obviously, I appreciate the question. It's obviously going to depend upon where the demand is coming from. But based on our current expectations that the national builders, production builders, are going to continue to take share, I think that material will continue to be tight. And, as we answered to the previous question, the mix of what's being installed for that shift towards the production builders does benefit availability, if you will. We do believe that there will be, as I think everybody on this call appreciates, Knauf is adding some additional capacity this year. We believe, as we progress out to 2025 and 2026, that some of the other manufacturers will probably add additional capacity as well that will be productive for the industry. That continued mid-single-digit growth. One is necessary from a housing perspective just in terms of the availability of housing. But we absolutely believe the industry is going to be able to manage effectively in that kind of an environment. Okay. Appreciate the color. Thank you. Sure. Thank you. Our final question comes from the line of Noah Merkousko with Stephens Inc. Please proceed with your question. Good morning. Thanks for taking my questions. Congrats on the strong results. First, I think the big story of 2023 was value over volume. You clearly see that in the results. As we look to 2024 with the improving demand backdrop, especially on single-family, do you think that there's an opportunity to unlock volume from potential customers that maybe didn't ascribe the value to your services in 2023? But now, as things kind of ramp up, you're able to sort of, again, unlock that kind of volume? Sure. It makes sense. Yeah. But we see it more as growing with our existing customers, their volume, as opposed to chasing new customers that don't fully value our services. Okay. But you don't think that those customers that didn't buy your services, that might shift here as demand improves? Or do you think it'll just be the same story? No. It typically does. Yeah. For sure. For sure. Okay. And then second question, just a more macro just wanted to get your view more on the macro and the consequences of if we do see the Fed begin to lower rates in the back half of the year. Clearly, I think that'd be a positive overall for single-family. But to what extent do you think existing home sales, sort of maybe coming off the bottom, could compete with new demand? And then a second point to that, there's been a lot of talk on this call about you're seeing a lot more demand from the larger production builders. But if and when rates fall, does that allow the smaller and more local players to participate more heavily in the market? Well, theoretically, yes. I think one of the advantages that the production builders, the big builders, have a lot of advantages. But one of their, I think, key advantages going into 2024 is their land position. I think you saw what happened in 2023 is a lot of the regional and local guys used up a lot of their land position and now are in a spot where they maybe don't have the even though the demand might be there, they might not have the land to build. Now, I need to clarify something. I don't want to be super negative on the regional and local guys because they are the largest part of our business. They're still very constructive and positive. We're very pleasantly surprised that they're as constructive and positive as they are just given the environment. But if the Fed, as I think most people are expecting, does decide to lower rates in the back half of the year, I do think it continues to be good for housing. I don't think they're going to lower rates enough that it really unlocks the 3% mortgages that so many people with existing homes have, that it's going to present a competitive alternative, if you will, to new home construction. And quite frankly, even if it does, the demand for housing is solid. And I think there's plenty of room for both the existing home market and the new home market given the availability or the demand for housing. Quite frankly, it's a healthier environment for housing affordability when you have a more historical mix of existing homes and new homes. Right now, as we mentioned in our prepared remarks, I mean, the new home sales as a percentage of overall home sales is at a very high level because of the things that we all know about on this call. Yep. That all makes sense. And it's helpful. Appreciate the time. And good luck with the rest of the year. Great. Thank you. Thank you. Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Edwards for final comments. Thank you for your questions. I look forward to our next quarterly call. Thanks. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.