Welcome to the Installed Building Products Fiscal 2024 Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief 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 your host, Darren Hicks, Vice President of Investor Relations. Thank you, sir. You may begin. Good morning and welcome to Installed Building Products Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. Earlier today, we issued a press release on our financial results, 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 federal securities laws. These forward-looking statements are based on management's current beliefs and expectations and are subject to factors that could cause actual results to differ materially from those described today. Please refer to our SEC filings for cautionary statements and risk factors. We undertake no duty or obligation to update any forward-looking statements 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 non-GAAP measures to the nearest GAAP equivalent in the company's earnings release and investor presentation, both of which are available in the 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 we are also joined by Jason Niswonger, our Chief Administrative and Sustainability Officer. Jeff, I will now turn the call over to you. 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. Our fourth quarter results capped off another record year of revenue and profitability for IBP, supported by organic growth across our residential end markets. Our record financial performance in 2024 is a reflection of the talent, commitment, and focus of IBP's employees across the country. We continue to invest in attractive growth opportunities and return capital to shareholders with strong operating cash flow generated in 2024. During the year, we invested approximately $87 million in acquisitions and allocated a combined $230 million toward dividends and share repurchases. I'm pleased to report that for the first quarter of 2025, our Board of Directors approved a 6% increase to both our regular quarterly cash dividend and an annual variable dividend to $0.37 per share and $1.70 per share, respectively. These actions reflect the Board's confidence in our financial position and ability to support a strategy of returning capital to our shareholders over the long term. The success of our growth strategies, combined with our disciplined approach to capital allocation, have created significant value for our shareholders. Again, the credit for our accomplishments goes to the hardworking men and women across our more than 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 and maximizing returns for our shareholders, we remain committed to doing the right thing for our employees, customers, and communities. Looking at our full-year sales performance in 2024, our consolidated sales growth of nearly 6% and same-branch growth of approximately 4% drove another year of record results. In our largest end market, single-family sales growth was supported by a diverse mix of local, regional, and national builders. Additionally, our deep customer relationships, local market knowledge, and the ability to align our pricing with the value we offer our customers were key to our 2024 single-family sales results. Our multi-family installation sales growth remained resilient during 2024 with apparent operational benefits of our centralized service-oriented model, combined with complementary product diversification efforts. On a same-branch basis, multi-family sales in our installation segment increased over 6% in 2024. We continue to see strategic growth opportunities through geographic and product expansion in our multi-family end market long term. On a same-branch basis, 2024 commercial sales in our installation segment improved modestly from the prior year period. Net income and EBITDA growth in 2024 reflected our pursuit of the most operationally and financially attractive jobs across the country. Across our network of branches, we prioritized profitable growth, which contributed to achieving an all-time annual record for diluted net income per share and Adjusted EBITDA in 2024. During 2024, we continued to fill out our geographic footprint through the acquisition of nine businesses with combined annual revenue of over $100 million. During the fourth quarter of 2024, we completed three acquisitions, including a Midwest-based specialty distributor focused on supplying insulation and related accessories to residential and commercial end markets with annual revenue of over $22 million, a North Carolina-based installer of multiple building products to new residential homes and commercial buildings with annual revenue of over $17 million, and a Texas-based single-family, multi-family, and commercial installer of fiberglass and spray foam insulation with annual revenue of over $12 million. Although deal timing is hard to predict, our current outlook for acquisition opportunities in 2025 is strong, and we expect to acquire at least $100 million of annual revenue this year. Based on the U.S. Census Bureau, single-family starts in 2024 were up 7%. Looking into 2025, we believe the demand environment for our single-family installation services will be relatively stable compared to 2024. Housing affordability continues to be a challenge for some potential buyers, and while there exists some uncertainty surrounding the regulatory environment, immigration and trade, recent economic growth, and employment data have been healthy, and we believe the long-term view on demand for our installed services remains positive. Operating conditions will inevitably change, but we remain steadfast in our effort to deliver a high level of service with a focus on realizing operational and financial improvements in 2025 and beyond. 2024 was a record year financially, and I remain encouraged by the resilience of our employees and excited by the prospects ahead for IBP and the broader installation and other building 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 and full-year financial results. Thank you, Jeff, and good morning, everyone. Consolidated net revenue for the fourth quarter increased 4% to a fourth quarter record of $750 million, compared to $721 million for the same period last year. The increase in sales during the quarter reflected growth across all end markets and sales from IBP's recent acquisitions. Same-branch sales growth was up 1% for the fourth quarter. Although the components behind our price/mix and volume disclosure have several moving parts that are difficult to forecast and quantify, we continue to experience top-line improvement from a 1.2% increase in price/mix during the fourth quarter. price/mix growth during the fourth quarter offset a less than 1% decrease in job volumes relative to the fourth quarter last year. With respect to profit margins in the fourth quarter, our business achieved Adjusted Gross Margin of 33.6%, down from 34.1% in the prior year period. The margin headwind during the quarter was primarily due to higher sales growth in our lower gross margin other segment, which includes our distribution and manufacturing operations. This was partially offset by improved gross margin in the complementary products we install. Adjusted Selling and Administrative Expense as a percent of fourth quarter sales was 18.1%, down from 18.3% in the prior year period due to lower administrative expenses as a percent of 2024 fourth quarter sales. Adjusted EBITDA for the 2024 fourth quarter increased to a fourth quarter record of $132 million, reflecting an Adjusted EBITDA margin of 17.6%. For the 12 months ending December 31, 2024, same-branch incremental EBITDA margins were approximately 14%. Incremental EBITDA margins can be highly variable from quarter to quarter, but we continue to target full-year, long-term, same-branch incremental Adjusted EBITDA margins in the range of 20%-25%. Adjusted Net Income increased to $81 million for $2.88 per diluted share. Although we do not provide comprehensive financial guidance, based on recent acquisitions, we expect first quarter 2025 amortization expense of approximately $10 million and full-year 2025 expense of approximately $39 million. We would expect these estimates to change with any acquisitions we close in future periods. Also, we expect an effective tax rate of 25 to 27% for the full year ending December 31, 2025. Now, let's look at our liquidity position, balance sheet, and capital requirements in more detail. For the 12 months ended December 31, 2024, we generated $340 million in cash flow from operations in line with the prior year period. Our fourth quarter net interest expense was $9 million compared to $8 million in the prior year period. The increase was primarily driven by fees associated with the successful refinancing of our $500 million Term Loan B facility, which was completed in November. The term loan repricing has more favorable financial terms compared to our previous term loan and will save the company over $1 million in estimated cash interest expense annually. The term loan expires in March 2031, and we have no significant debt maturities until 2028. At December 31, 2024, we had a net debt to trailing 12-month Adjusted EBITDA leverage ratio of 1.08 times compared to 1.01 times at December 31, 2023, which is well below our stated target of 2 times. With our strong liquidity position and modest financial leverage, we continue to prioritize expanding the business through acquisition and returning capital to shareholders. During the 2024 fourth quarter, IBP repurchased 383,000 shares of its common stock, bringing the total value of our share repurchases for 2024 to $145 million. The Board of Directors authorized a new stock buyback program, which expands our share repurchase capacity to $500 million, up from $300 million in the previous program. The new authorization replaces the previous program and is in effect through March 1, 2026. IBP's Board of Directors approved the first quarter dividend of $0.37 per share, which is payable on March 31, 2025, to stockholders of record on March 15, 2025. 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 $1.70 per share annual variable dividend, which is a 6% increase over the variable dividend we paid last year. The 2025 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 31, 2025, to stockholders of record on March 15, 2025. We are committed to continuing to grow the company while returning excess capital to shareholders through our dividend policy and opportunistic share repurchases. 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 and commitment to our company. Our success over the years is made possible because of you. Operator, let's open up the call for questions. Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. We ask that analysts limit themselves to one question and a follow-up so that others may have an opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. One moment, please, while we pull for questions. Our first question comes from Keith Hughes with Truist Securities. Please proceed with your question. Thank you. As you look into the new year, what are you expecting in terms of multi-family, single-family work? What's kind of the IBP view of those markets? Keith, this is Michael. So our perspective is fairly consistent with what it's been for the past couple of quarters in the sense that we do believe, and I think our results have demonstrated this on the multi-family side, that we will continue to outperform the market opportunity. That being said, on the multi-family front, I think we can all acknowledge that the units under construction currently today, so in essence, the backlog, continues to still be highly elevated relative to the current starts environment. And we believe that it will take at least six months at the current pace of starts and completions for that multi-family units under construction to come in line. And just from a macro perspective, we believe that's a 20%-25% decline in the units under construction. Now, again, I have to reemphasize that we have performed better than the overall market. We believe we will continue to perform better than the overall market. We continue to actually, within the multi-family segment for us, continue to benefit from price/mix, which has been very encouraging and has been indicative of an incredible job that our field team has done there, so again, we think it's going to be challenging for the first half, probably going a little bit into the third quarter of this year, but we do expect to perform better than the relative overall market. On the single-family side, I would say that we, like it seems like other companies and investors, are certainly less optimistic about the growth rates for single-family in 2025. As we all know, we've gotten off to a fairly slow spring selling season, and there is a lot of inventory, spec inventory on the ground, something we're all aware of. As we look over the entire year, I mean, if we get low to mid, I would say probably low single-family starts growth this year, we think that's a good case scenario, quite frankly. The public builders that we track, their average estimated sales increase for the year, and these are the ones that are our customers, and then we weighted for their sales with us, would imply about a 3% full-year sales increase. That seems like consistent with what a lot of people's expectations are. I would say, though, that starts comps are difficult in the first half of this year relative to last year. The starts numbers were weighted more heavily single-family, this is now, were weighted more heavily towards the first half of the year. So I think it's realistic to assume that we're going to have negative single-family starts comps in the first half and then picking up in the second half and then on a full-year basis. And again, I'm talking about the industry, not necessarily us. On the full-year basis, maybe we get through the year flat to up a couple of points. So that's sort of how we're looking at the year. Hopefully, that answered your question. Yeah, that was very comprehensive. Just one other one. You kind of mentioned price/mix has been a positive for a long time. What's your view, at least to begin the year, on what price/mix is going to do in your business? Again, I think everybody's well aware of this, but clearly, we're in a very benign inflationary environment, at least right at the moment. And I'm sure we'll talk ultimately about the potential tariff situation and what that means. But at least for now, it's a pretty benign environment. And the price/mix benefits that we're seeing are really just carryover price/mix benefits from prior periods. It is a relatively soft environment, and that creates a relatively benign pricing environment, not just for us, but for our suppliers as well. Okay. Thank you. Sure. Our next question comes from Stephen Kim with Evercore ISI. Please proceed with your question. Yeah. Thanks a lot, guys. Appreciate the color so far. Just following up on Keith's question about multi-family, just was curious about if you could elaborate a little bit more on the growth plans that you have. I know that CQ plays an important role in that multi-family performance. And my understanding is that CQ is seeking to expand into new markets. I was wondering if you could talk about the growth opportunities that you see in multi-family and how much of an expansion. Give us some sense for how much of an expansion we could see in the multi-family segment or your performance in multi-family as a result of that. Stephen, hi. This is Jeff. As you well know, because you were just with those guys, we think a lot about, obviously, very highly about CQ's ability to continue to penetrate. At this point in time, there's plenty of white space as it relates to our branch locations where they're not participating. The second thing that they're able to do is to continue to sell other products, so from a mixed perspective into those multi-family jobs that we are getting into, so they've been even just recently, within the last 12 months, very active in Texas. Obviously, there's a lot of opportunity there, but again, we're really just kind of certainly not in the infancy, but we're probably a toddler or not quite a teen in terms of our kind of penetration into the IBP footprint. Now, that doesn't mean we aren't already kind of matured on multi-family at certain locations and certain branches, but there's plenty of geography that will continue to grow and work relationships. Yeah. Just to kind of dimensionalize that a little bit more, Jeff, I mean, do you think that it's possible that we could see kind of an expansion of that, let's say, division or initiative such that it could expand your multi-family presence by, let's say, 50% over a period of years? Is there any kind of general sort of target that you have for that business? It's clearly not 50%, but it's probably 10 or more major markets, which is not insignificant when you think about that, even as it relates to our overall multi-family volume. Normally, because of the share that they end up taking and the penetrations they do make when they enter one of these new markets. Yeah. I mean, we are, as I think you know and as we've talked about a lot, I mean, our multi-family sales are roughly 16% of total revenue. And there's definitely significant opportunity for them, as Jeff was just saying, to expand into other big markets. But I think one of the things that we've really been able to benefit with the kind of CQ model, if you will, is that we notice when they go into a market, even if we're already doing multi-family work there, they're able to significantly increase our market share of that work and then the penetration of the other products. So as a consequence, I think on a relative basis, once we're fully implemented with the CQ strategy, which is going to take years, just to be very clear, I think in essence, we will become over-indexed to multi-family, but in a very high-quality manner. Yeah. Okay. Great. Helpful. And then secondly, your SG&A was fine, but it was a little higher than we were expecting. I'm just wondering if there was anything worth calling out on the SG&A front this quarter, whether it be incentive comp or some of the other things that have impacted you in prior quarters on the SG&A line? No. Quite honestly, I mean, I know everybody kind of lumps selling expense and G&A expense together, but we kind of think of them very separately. Because selling expense really just tracks 4.7%-4.8% of revenue. So the G&A side, actually, we felt pretty good about getting a little bit more leverage than not only last year, but last quarter. And we expect that G&A, as we talked the last quarter, it, generally speaking, rises with overall inflation, not necessarily the inflation of the products that we install. So that we would expect to see that G&A increases onto that 3%-5% rate in a given year on a full-year basis. But right now, G&A on a quarterly basis is running $105 million-$110 million a quarter. That, in essence, so fourth quarter G&A flows through almost directly to first quarter G&A, even though you end up obviously having lower seasonal sales in the first quarter of the year. Our next question comes from Michael with J.P. Morgan. Please proceed with your question. Hi. Good morning. This is Alex Isaac on for Mike. Thanks for taking my question in regards to the quarter. Regarding M&A, how would you characterize the pipeline and opportunity set in front of you today versus 6 to 12 months ago? The same. I mean, there continues to be plenty of opportunities in that regard. Pipeline, I think, is as good as it's been. A lot of times, people assume too when things get a little rockier or the outlook might not be as good, that that somehow generates more opportunity. That's not really been our experience. Most of the businesses that we're buying are typically mom-and-pop owned, which could be a decent-sized business, but a privately owned, private individual selling the business, and typically, they are for sale when their situation in life makes them want to be for sale, i.e., retirement. That sounds great. Appreciate the answer. And then also on fiberglass supply, how did you see that trending? And what do you see price cost in 2025? I'm sure you know there was an announced price increase, but well, by three of the four manufacturers that did not meet well and sit well with the market. Clearly, I think this is out there and known too that there's supplies a little more free-flowing than it's been historically. As we know and we're all seeing, builders aren't feeling as happy as they maybe should be at this time of the year. I mean, we'll see, right? I guess. It probably depends on what the second half of the year looks like. I know there's at least I saw recent conversations, I think even at IBS, by one of the manufacturers around potentially a spring increase. But I don't know that the market was going to look a lot different in terms of that being successful a month or two from now than it certainly does today or did in the last 45 days. Yeah. And I would say this is Michael. I would say that if there is another announced price increase and it gets more traction than this last one, we believe the way that happens is because there's a stronger demand environment than maybe some of us think exists today. And that's constructive for us. So we have historically always been able to pass on price that we take from the manufacturers. Sometimes it's a little delayed, but ultimately, we always get there. Our next question comes from Susan Maklari with Goldman Sachs. Please proceed with your question. Thank you. Good morning, everyone. Good morning, sir. My first question is on the gross margins. Michael, you mentioned in your commentary that there were some headwinds from the distribution and the manufacturing ops. And it sounds like you had some offsets there from your complementary products. Can you just talk a bit more about the dynamics that are coming through across the various areas of the business and how we should be thinking about that as we look to the year ahead given the environment that we're in? Yeah. So thanks for asking that question. So just sort of the level set, the other segment that we disclose is our distribution and manufacturing operations. It's still a relatively small component, but it structurally has lower gross margins than the install business. It has very good OpEx leverage, but it has lower gross margins. Just in general, those gross margins can be 700 to 800 basis points lower than the install gross margin. So that other segment grew at sort of a low-teens rate in the quarter, whereas the install segment grew around 4% or so. So because you had a higher rate of growth in that lower gross margin business, it weighed on overall gross margins by about 30 to 40 basis points. Fortunately, we did have, as you pointed out, the complementary products. The other products that we install, like showers, shower doors, mirrors, and gutters, actually grew at a rate faster than overall insulation sales, so that's spray foam and fiberglass. They had a fairly solid improvement in gross margins, so that was an offset to the other segment sales growth. In essence, to kind of fundamentally answer your question, and as I think everybody on the call knows this, our highest margin products are insulation, right? When you see higher rates of growth in lower margin products, right, that obviously impacts the gross margin. Fortunately, we had the offsetting benefits of improving gross margin in the other products. I should note that some of that improvement in the complementary products' gross margin did come from the efforts we're doing on the multi-family side to cross-sell those other products into multi-family. Okay. That's helpful, Caller. And then understanding that the big public builders are under pressure and they're trying to work through that spec inventory, can you talk a bit about what you're hearing from some of your private builder customers, some of the activity at the higher end of the market, anything that's different there or notable, and anything across the various geographies that is worth noting, especially maybe with the weather to start this year? Yeah. So that's a great question. I would say first, we were a little surprised but pleased in the fourth quarter that we actually saw better growth out of the regional and local kind of custom builders than we did out of the production builders. And I think that's, and I should say, surprised relative to where we were sitting in the third quarter. But as I think has been well discussed, clearly, a lot of the production builders did towards the back half of the year and then even going into this year kind of slow down their pace of starts and construction because of the softness and the kind of spec inventory on the ground. So when I think about kind of surprised, that was from like three, four months ago or, I guess, longer now. We've been very encouraged about how resilient the regional and local builder has been. In terms of the weather and the fires, as I think again everyone here on the call is aware, is that the first quarter of this year has one less selling day than last year. And just as a reference point, our average sales per day is anywhere between $10 million to $12 million. So that will negatively impact first quarter revenue relative to last year. We estimate that in January and February from the fires and the storms, that it negatively impacted revenue of about $20 million. Now, what we don't know is how much of that we will make up in the month of March. As you know, we will work Saturdays to make up for lost time. But where we're uncertain as to how much we're going to be able to make up is that many construction sites across a very large component of new home construction in the southern part of the country, I mean, basically construction stopped for an extended period of time just given the weather situation there. So we actually think that that's going to cause what would normally maybe you could catch up in a March, it's probably going to work itself out or normalize more as we get through even a little bit of the second quarter of 2025, if that makes any sense. Our next question comes from Mike Dahl with RBC Capital Markets. Please proceed with your question. Hi. This is Chris on for Mike. I just want to get your guys' thoughts on competitive dynamics and what you're currently seeing today. One of your competitors cited some weaker markets where they're seeing price concessions. Is that something that you're seeing at all? And what's your expectation this year around competition and any risk of price give back? Should we see builders be more aggressive with supplier conversations? I mean, of course, in a not as robust, a little more of a slack environment in that regard, it's a little tougher to maintain pricing than it is otherwise. Having done this for 30 years, it's not new, I think, to anybody and to most everybody on the team. So you do what you got to do. You try to differentiate yourself on service. You've typically got long-term relationships with your builders. You deal with one another fairly. And it usually works out okay. Yeah. I mean, I would say it's always a competitive environment. And from our perspective, and we've talked a lot about this because it's the way we run the business, is that we are always going to favor working with the customers that pay us a fair price over volume. And that will continue to be the case. And let's just be clear. I mean, the environment is just not growing at a rate that we all expected. So it's kind of softer, but that doesn't mean we're seeing substantial declines in the market, right? So I mean, I think that while people's confidence has been tempered down or whatever, this is not a dire situation by any means, right? I mean, it's still a healthy environment. And we still feel extremely constructive about the medium and long-term demand for new construction in this country. 30 years ago, I was with a gentleman who was a sales trainer for Owens Corning. And he said, "It's always 100% about price." And that's true to get in the beginning. And then price is completely out the window thereafter. And it's never about price, if you understand what I'm saying. You got to be in the room from a pricing perspective, even have the conversation. But after that, it's everything else you do as a contractor or a subcontractor that gets you the job, wins you the job, and keeps the job. Yeah. Understood. Appreciate that. And then just on multi-family, are you guys expecting any sort of outsized margin headwinds once those declines start impacting your business? I know you guys said it was a price/mix tailwind for you guys this quarter, but just when we think about that normalization, assuming there's a price/mix headwind, but is there also a margin headwind associated with that? Not significant, no. But I mean, clearly, when you lose, if you're in a negative sales environment, right, that creates, particularly if it's a shorter-term, say, six-month negative sales environment, your decrementals are larger than your incrementals because you're not adjusting your lagging variable costs, which are primarily general administrative costs. So that $105 million-$110 million of G&A in the quarter that we had discussed in the previous question, that doesn't really adjust very significantly if you have declines in volumes, right? So you do have decremental margins associated with that. But I want to reiterate on the multi-family side, while we do believe that units under construction need to come down, call it 20%-25%, and it's going to take at least six more months of that to happen. We firmly believe, as we have demonstrated over the past year, quite frankly, and last four quarters, that we will perform better than the overall market. Our next question comes from Phil with Jefferies. Please proceed with your question. Hey, guys. Appreciate all the great color. In a pretty choppy environment, guys, last year, margins have been quite steady and certainly stepped up nicely in 2023. In this okay but not great environment, and in my call, I appreciate the G&A piece that you called out. Is this an environment that you could manage EBITDA margins pretty flat or you could see some compression? Your biggest competitor is calling 100 basis points of margin compression, a combination of carrying more labor costs, maybe pockets of competition. How do you kind of see EBITDA margins kind of playing out for you over the course of the year? Yeah. So I mean, as you know, we don't provide guidance. But I mean, clearly, based on the answer to all of the previous questions and our expectation that the softness is not here to stay, so to speak, that we will hopefully see in the back half, particularly in single-family and the stabilization on multi-family, things improving, generally speaking, you're not going to make substantial cuts, particularly to G&A, although you will manage it, right? It's not as if we're not going to manage our expenses. It does have a tendency for, hopefully, a short period of time to put pressure on EBITDA margins. It's just the reality of the numbers and the situation. But we, as a company, are working very hard. The incentive systems from Jeff Edwards all the way down to every single branch manager, our incentives are structured such that we want to improve EBITDA. That's really the primary focus of the company. We're going to be working very hard to do that. Super. I guess a question for Jeff. In this environment, and cash flow is still pretty strong, how do you kind of balance between M&A versus buying back your stock, returning cash back to shareholders, and it sounds like pipeline is still pretty good. Are you seeing anything that's larger out there, Jeff, and is there any appetite for you to kind of pivot a little bit from your current wheelhouse where you've been kind of pursuing these attractive bolt-ons but maybe looking at something that's a little different, maybe something that's a little larger? I mean, we'll always favor M&A over anything else, so in terms of capital allocation, but as you know, I mean, our free cash flow and the cash on the balance sheet is such that we're not a one-trick pony in that regard, so we can do kind of pieces and parts of everything as it relates to capital allocation. We are seeing some larger deals. I'd say they're currently in the wheelhouse. We're not at all adverse to the idea of necessarily getting out of the wheelhouse and looking at maybe some adjacent, maybe not industries, but adjacencies in terms of acquisitions they would need to make. I don't think they're going to be far afield and crazy, but they would need to have some strategic relationship to kind of our core business. As you know, Phil, I mean, for us to do something a little bit different, it's not like we're going to go out and buy a billion-dollar company, right? It's kind of maybe twice our average deal size, but still something that's exceedingly manageable for us and gives us time to really conservatively understand that business better before we make a concerted push into it if we were going to do something like that. Our next question comes from Trey Grooms with Stephens. Please proceed with your question. Hey, good morning, guys. This is Ethan on for Trey. Thanks for taking my question. I just wanted to elaborate on spray foam a little bit. So you previously called out spray foam trends that were kind of expected to continue into this quarter. Just wondering what you're seeing on that side. And then given your outlook for sort of better demand, I suppose, in the second half, just to generalize it a bit, should we expect positive price costs in the second half of this year? Thanks. So yeah, I'm glad you asked the question about spray foam because it continued to be a headwind in the fourth quarter, as we had discussed that it would in the third quarter. So it was kind of a negative to gross margin, call it anywhere between 10-20 basis points. What I would say is that that is kind of trending through the first quarter, but pricing there is starting to stabilize because there have been price increases, manufacturer price increases. So you're seeing stabilization come there. And we would expect to see spray foam not creating sort of a negative gross margin impact as we go into the back half of the year. Again, we don't provide guidance. But I would say price/mix, assuming, of course, that the single-family market does, as I think there are a lot of expectations around this in the back half, accelerates and improves and multi-family stabilizes, we would expect to have better price/mix in the first half than we do in the first half. Okay. That's super helpful. And then lastly, just on costs, you spoke a little bit about sort of benign cost inflation. But can you walk us through the sort of puts and takes you're seeing on the cost run, particularly in labor? I would say that, and I'll break it down again from sort of an income statement perspective, if you look at cost of goods sold, which is material and the install labor, it's pretty benign. And there are puts and takes to that, but it's a stable inflationary environment. As I said to an answer in an earlier call, selling expense consistently runs 4.7%-4.8% of revenue. I mean, obviously, that changes quarter to quarter. But if you look historically, that's been a pretty decent historical average. And then G&A, a little bit disconnected from cost of goods sold in this perspective because those costs tend to rise with overall inflation, as we were saying earlier. So if we look on a full-year basis to have G&A go up 3%-5% on an annual basis, that would make sense. However, that would be before we take any expense management initiatives into consideration. I will say, while we're clearly focused on expense management, particularly on the G&A side this year, it takes a while for the benefit of that expense management to flow through the P&L. Our next question comes from Ken Zener with KeyBanc Capital Markets. Please proceed with your question. Good morning, everybody. Morning, Ken. Jeff, Michael. For some reason, it seems like you guys drank a disclosure serum this morning, so I think everybody appreciates that. I appreciate your comments around the cycle of it not being that bad. I'd agree with you. It's not like 2010. But inventory is high. That's something that you've called out. Michael, you said it can pass in six months. If you could give us kind of some concept around why you have six months. And while you're doing that, given your national footprint versus much more regional builders, if you could expand on regional comments that affect that second-half expectations, think Florida, right? Central Florida, Southwest, Texas, not that bad. Midwest, very strong. That's the first question. Thank you. The six-month comment was really all around multi-family and trying to contextualize what we think is going on in the macro multi-family environment. One of the ways that we contextualize or look at that is to look at multi-family units under construction relative to the current start pace and to normalize the units under construction relative to the current starts level, which, by the way, we do believe has bottomed out. We believe that, and this is counter to, I think, what most other people believe. We believe that the current rate, call it 330, 350 or so, is probably right. Given the current demand for housing, it should probably bump up to a higher level as we go towards the back half of the year. That's a little bit counter to what most people think. If you look at, though, the units under construction, again, relative to the current completions rate and the current starts rate, we estimate that assuming completions stay at their current level, starts stay at their current level, that it would take roughly six months or so to normalize the units under construction. That would mean a decline in the units under construction and therefore the macro opportunity for the industry to come down 20% plus. Then in terms of, I think the second part of your question was really going more towards single-family versus multi-family. I would say that, yes, I mean, Texas and Florida are a little weak right now. The Midwest and Northeast are surprisingly strong on a relative basis. Although, as we all know, I mean, Texas and Florida are a pretty big percentage of the overall new home construction market. Fundamentally, though, we believe those markets are very strong. As I think everyone on this call knows, Texas is our largest state from a revenue perspective. Our team there does an incredible job, and while we might see softness in both those big markets for us, long term, they are great housing markets. Right, and I think what people are struggling with is it's less about the volume, right? And I understand your comments around the six months were for multi-family, but there's a lot of single-family inventory for sale. We're seeing weakness, which is pressuring margins, certainly for the public builders more right now, but we're trying to toggle between what are the builders' comments around second-half improvement are more tied to multi-family, it sounds like, but in those markets. No, no. I understand. Okay, and then I appreciate that. Where builders are running higher inventory. This is like you guys probably have better insight, right, than almost anybody in the country. Where do builders have too much inventory? Spring selling season is slow. Are they telling you just to come back in a month or six weeks to see where if those homes are selling and what their future bid contracts will look like? Because it's kind of an air pocket, right? I mean, the volume's going to be fine over time. It's just it's been clearing out this inventory that they think is good amid first-time buyers wanting quick move-in homes, yet that has some risk to it. I mean, it's that dynamic of the bad markets that people are trying to understand. Thank you very much. Yeah. And I'm sorry, Ken. I'm not going to give you a real specific answer there because, quite frankly, it varies, not just city to city, but subdivision to subdivision in terms of where they might have too much inventory given the current demand environment. So it really is, I don't think you can just say a broad brush and say, "Well, Dallas is over-inventoried," and the Mid-Atlantic is under-inventoried, right? I think it really is customer by customer, subdivision by subdivision, as to whether or not they have too much spec sitting on the ground. Our next question comes from Kurt Yinger with D.A. Davidson. Please proceed with your question. Great. Thanks. And good morning. Just one, I was hoping you could kind of update us on the build-out of internal distribution capabilities, kind of expansion plans in 2025. And that has been kind of a margin drag here in 2024. Would you expect the margin impact to be kind of similar or maybe even magnified a little bit? Thank you. This is Jeff. Actually, I think we're making really pretty good measured progress in that regard. It obviously takes time. Certainly don't expect it to be margin drag. We are part of the effort was to make sure that we were not in times of tight supply, buying as much out of distribution in a knee-jerk reaction. I think we've been successful in that regard. It certainly helped the supply has loosened a bit and that there's not a problem with not being able to get this SKU or that SKU. So again, we continue to kind of leverage the logistics side of things, the little business we bought in that regard. And we continue to expand our distribution footprint, which is really both for an internal from an internal perspective, but ultimately will lead to third-party business also. So I actually feel really good about that progress. Yeah. Just if, well, this is not a 100% correlation, but internal distribution, if you will, last year was around 9 million. And in essence, it doubled this year to around 18 million. So we have a long way to go, but we've made great progress there. The team's doing a really, really good job there. But it does, as we talked in the last quarterly call, it does add G&A because we are adding facilities and we are adding people. But it is definitely benefiting, starting to benefit gross margins slightly. Got it. And maybe just to kind of follow up there in terms of the comment around measured progress, is this something we should think of as a three- to five-year kind of build-out to get to where you ultimately want to be, or would it extend meaningfully beyond that kind of timeframe? I think the three to five is the right answer. The only thing that might make it extend is if for some reason the markets continue to remain flat. But honestly, this is a way for us to, as we roll this out, we do get benefit over time, and it helps us improve margins. So in a, let's just say, a five-year flat environment for demand from our end markets, it's a good way for us to help margin. Okay. That all makes sense. Thank you. Sure. There are no further questions at this time. I would now like to turn the floor back over to Jeff Edwards for closing comments. I just want to thank all of you for your questions, and I'll look forward to our next quarterly call. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.