Good day, and welcome to the Q2 2024 UFP Industries Inc Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Dick Gauthier, Vice President of Investor Relations. Please go ahead, sir. Welcome to the second quarter 2024 conference call for UFP Industries. Hosting the call today are CEO Matt Missad and CFO Mike Cole. Matt and Mike will offer prepared remarks, and then the call will be open for questions. This conference call is available simultaneously in its entirety to all interested investors and news media through our webcast at ufpi.com. A replay will also be available at that website. Before I turn the call over to Matt Missad, let me remind you that today's press release and presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projections. These risks and uncertainties include, but are not limited to, those factors identified in the press release and in the filings with the Securities and Exchange Commission. I will now turn the call over to Matt Missad. Thank you, Dick, and good morning, everyone. We appreciate you taking the time to listen to our second quarter results and to hear what our plans are for the balance of the year and beyond. The second quarter was generally in line with expectations, and our team was able to roll with the changes in the economy and in the demand. I'd like to thank them for their excellent work. If the last couple of months are any indication, we will need to follow Bowie's advice to turn and face the strange changes. Factors such as a stranger-than-fiction election season, a Fed which, like an adrenaline-fueled Olympian, may have over-rotated on the landing with the higher-for-longer interest rates, and an eye-popping federal debt will cause further economic concerns. The balance of 2024 is likely to be more challenged than originally forecast. We are seeing declines in unit volume in most business units. Slack demand creates competitive pressures as supply outstrips demand. Any reduction in interest rates during the balance of 2024 is unlikely to spur enough growth to provide a material impact in 2024 but could aid 2025 and beyond. Our near-term focus is on maximizing capacity utilization through strategic facility rationalization, weeding out underperformance, reducing SG&A costs in the non-strategic and non-critical areas to keep them in line with gross profit targets, and to simplify our operating structure even further. Because automation and plant specialization have made us more productive, it enables us to further consolidate locations. Delivering exceptional customer service is a key driver for many of our locations, as is avoiding additional freight costs from being further from our customers. However, as we have expanded our transportation capabilities and improved our manufacturing efficiencies, we have more opportunities to consolidate manufacturing, offset cost increases, and still provide excellent customer service. While reducing operating and overhead costs is a strong focus, we know that to enhance future growth, we must continue to create more value through innovation, new products, and automation, as well as deploying our capital wisely. In spite of short-term challenges, we remain confident in our long-term strategy, have ample capital to deploy, and believe we are uniquely positioned to invest further to further accelerate our long-term growth. We have analyzed our runways as we do each quarter. Given the current M&A environment, growth by acquisition remains overpriced for our return model in many areas. Those runways with the best growth potential for organic and greenfield-type growth will receive more capital to execute their plans in lieu of acquisitions. In terms of capital allocation, over the next 24 months, we expect to allocate the following capital amounts: one, $300 million in packaging for product-specific vertical integration, alternative packaging materials including steel, corrugated, labels, and geographic expansion and protective packaging expansion; two, an additional $250 million in the Deckorators brand for marketing, new product launches, and increased capacity. We believe that the Surestone technology is the best in the business, and with proven features and benefits and the ability to achieve further scale and synergies in manufacturing, it is the right time to more significantly invest in this value-added growth vehicle. Number three, $350 million in construction, primarily to support housing. Projects include facilities and new geographic markets for automation to reduce manufacturing costs and new product development and launches for several product lines, including OEM and aftermarket products through our ReCreate brand. Number four, $100 million investment in ProWood for wood protection chemicals and equipment upgrades to consolidate locations and to enhance our product offerings and create patent-protected technologies. The above amounts are in addition to normal maintenance and replacement capital expenditures. A quick overview of segment performance and outlook is as follows: Retail Solutions. In the second quarter, ProWood unit sales were off 6% overall, in line with the overall market contraction. The team is adding new specialty products in fencing and outdoor spaces, while enhancing the ProWood brand. Deckorators unit sales were down 2% overall, while its decking and railing product unit sales were up 5%. We expect to see a significant shift in customer concentration in 2025, with the overall impact being positive growth with both our Surestone and WPC products. As already mentioned, we will be accelerating our investment in capacity, new products, marketing, and distribution with Deckorators to meet the expected increase in demand. Our product strategy is to grow applications on the exterior of the home and in the yard, while also adding new applications inside the home. While increased marketing and new product expenses may drag on earnings near-term, we are very confident that they will drive more shareholder value more quickly than our previous level of spend. The outlook for retail, based on the repair and remodel statistics, is expected to be down mid-single digits for the balance of 2024. Longer term, the age of the housing stock indicates the need for an increased level of repair and remodel spending. In construction, the site-built business unit has been solid in a down market. Unit sales were up 4% in the quarter. Factory-built has performed well, as unit sales are up 19%. The outlook for site-built will be down single digits for the balance of the year, while factory-built is expected to continue to outperform prior year for the balance of 2024. UFP Packaging. Structural packaging continues to face soft demand and competitive pressures. The sales organization is driving new customer acquisition, which we expect will become evident in 2025. Given the demand environment and the impact of automation on increasing capacity without increasing footprint, the structural packaging team is aggressively pursuing strategic facility consolidation and cost rationalization, which we are confident can be achieved while maintaining excellent customer service. PalletOne has performed well, with unit sales up 10%. The previous overhang of excess pallets has largely worked its way through the system, and demand is more in line with historical norms. With the current demand environment and our growing investment in technology, innovation, marketing, and analytics, the corporate department team is executing its plans to focus on high-priority projects and reducing or deferring costs in projects which have a less significant impact. The effort to drive savings is made more difficult due to increased regulatory and risk costs, such as cybersecurity, audit, new SEC reporting, and other compliance requirements, which have increased our costs an estimated $10 million since 2020. Other than the strategic growth areas, we intend to make sure our SG&A costs get in line with historical targets. Some other areas of interest are: one, new products. New product sales for the second quarter were $133.6 million, and year-to-date were $259.5 million. We are on track for our annual 2024 target of $510 million. As you know, new products development is an integral part of each business unit's strategic plan, and we continue to drive that faster. Number two, raw materials. The lumber market declined during the quarter and is expected to remain well below normal levels as supply exceeds demand. With new production coming online this year, we expect curtailments to occur in older, less efficient facilities. Number three, human capital. The U.S. unemployment index was up to 7.7% at the end of June versus 6.9% at the end of April. Continuing a year-long trend, the majority of new jobs are in government, healthcare, social services, and nonprofits. These jobs do not generally boost GDP. Inflation has made it more difficult for many to make ends meet, and the increased tax burdens further reduce purchasing power. This has enabled the creation of an availability of labor, which has improved since last year, and we are still seeking the best hardworking talent we can find. Number four, M&A activity has picked up, and more companies are accepting the fact that pandemic-generated returns from excess deficit spending are not realistic gauges of future performance. The multiple expectations are still artificially high in many cases, although there appears to be some softening as buyers and sellers acknowledge the lower demand environment. Now I'd like to turn it over to Mike Cole to review the financial information. Thank you, Matt. Our consolidated results this quarter include a 7% drop in sales to $1.9 billion, largely driven by a 6% reduction in selling prices, while unit sales declined by 1%. The decline in selling prices resulted from a drop in lumber and more competitive pricing in most business units. Our overall unit sales held up well this quarter in spite of a more challenging demand environment due to the strength of our balanced business model. While adjusted EBITDA dropped 13% to $204 million, we're pleased to report our adjusted EBITDA margin remained well above historical levels at 10.7%. I was also pleased to see our cash cycle improve to 56 days this year from 63 days last year, reducing our investment in net working capital throughout the quarter. Our trailing 12-month return on invested capital also remains at historically high levels at nearly 20%, almost two times our weighted average cost of capital. We continue to increase our dividends and more aggressively completed share repurchases at favorable prices. Our balance sheet continues to gain strength with a cash surplus that's grown to over $1 billion this year, providing us with flexibility to pursue our financial and strategic objectives. Moving on to our segments. Sales in our retail segment dropped 14% to $809 million, consisting of a 7% decline in selling prices, a 2% decline due to transfers of certain product sales to other segments, and a 5% decline in unit sales. The unit decline was comprised of a 5% drop in volume with big box customers, while our volume with independent retailers was flat. By business unit, we experienced a 6% decline in ProWood, a 4% decline in Edge, and a 2% decline in our Deckorators business unit. We were pleased with our overall sales of Deckorators decking, which increased 15% and continues to experience solid demand. In spite of lower overall demand and sales volumes, as well as falling lumber prices, we're pleased to report a $4 million increase in retail's gross profits for the quarter, driven by a variety of factors, including better inventory management, SKU rationalization, and operating improvements in each of our business units. Operating profits were flat for the quarter due to a $4 million increase in SG&A expenses. Moving on to packaging. Sales in this segment dropped 11% to $435 million, consisting of an 8% decline in selling prices and a 6% decrease in units, partially offset by a 3% increase as a result of the transfer of certain product sales from retail. Customer demand in this segment continues to be soft, and that's contributed to more competitive pricing. As a result of these factors, gross profits dropped by $35 million year-over-year for the quarter. The year-over-year decline in gross profits was partially offset by an $8 million decrease in SG&A, resulting from a drop in incentive compensation. Consequently, operating profits in the packaging segment declined by $27 million to $30 million. Turning to construction, sales in this segment increased 4% to $575 million, as a 4% decline in selling prices was offset by a 7% gain in units and a 1% increase as a result of the transfer of certain product sales from retail. Improvement in volume was due to our factory-built unit, which increased 20%, primarily due to an increase in industry production, and our site-built unit, which increased 4%, primarily due to market share gains in existing and new products. These volume increases were offset by a decline in our concrete forming unit, while volume in our commercial unit was flat. The decline in selling prices was primarily experienced in our site-built and concrete forming business units, which, along with the unit declines I mentioned, resulted in a $12 million reduction in our overall gross profits for the quarter. When combined with a $2 million decrease in our SG&A due to lower incentive compensation, our operating profits declined by $10 million to $52 million for the quarter. As we manage through this cycle, each segment continues to focus on executing our strategies to grow our portfolio of value-added products. Our year-to-date ratio of value-added sales to total sales improved slightly to 68% this year from 67% last year, and our ratio of new product sales to total sales dropped slightly to 7.3% this year from 7.4% last year, as we've made our criteria for qualifying more stringent, including a minimum margin threshold. We're also mindful of our cost structure in this environment as we ensure the company is appropriately sized relative to demand, while still investing in the resources needed to achieve our long-term objectives for growth, product innovation, improving our efficiencies, and building our brands. Our SG&A expenses were in line with plan for the quarter and were $3 million lower than last year, driven primarily by lower bonus and sales incentives, offset by higher base wages and benefit costs. Given the more conservative outlook we have for demand, we'll step up our efforts to selectively reduce costs. Moving on to our cash flow statement. Our cash flow from operations was $239 million compared to $321 million last year due to an $18 million decline in our net earnings and non-cash expenses and an increased investment in our net working capital since year-end, which was $64 million higher this year than last year. In the first six months of 2023, we were able to reduce our inventory substantially as we adjusted from the peak demand of the pandemic. We believe our cash cycle is the best measure of our working capital management, and we're pleased that it declined to 56 days this year from 63 days last year due to a two-day improvement in our receivables cycle, as our receivables remain a healthy 94% current, and a five-day improvement in our day's supply of inventory driven by our construction and packaging segments. Our investing activities included $107 million in capital expenditures, which includes $68 million of maintenance CapEx and $39 million of expansionary CapEx. As a reminder, our expansionary investments are primarily focused on three areas: expanding our capacity to manufacture new and value-added products, geographic expansion in core higher-margin businesses, and achieving efficiencies through automation. Finally, our financing activities included returning capital to shareholders through almost $41 million of dividends and $137 million of share repurchases this year. Through the end of last week, we accumulated a total of $186 million of repurchases out of the $200 million authorization limit that expires at the end of this month. Turning to our capital structure and resources, we continue to have a strong balance sheet with over $1 billion in surplus cash compared to $702 million last year, and our total liquidity was $2.3 billion, which includes cash and availability under long-term lending agreements. With respect to capital allocation, we plan to continue to pursue a balanced and return-driven approach. As we've discussed in the past, our highest priority for capital allocation is to drive organic and inorganic growth that results in higher margins and returns. Our strategy also includes continuing to grow our dividends in line with our anticipated free cash flow growth and repurchase our stock to offset dilution from share-based compensation plans. We'll continue to opportunistically buy back stock when it's trading at a discounted value. With these points in mind, our board approved a quarterly dividend of $0.33 a share to be paid in June, representing a 10% increase from the rate paid a year ago. Our board also approved another $200 million share repurchase authorization that expires at the end of July 2025. With regard to CapEx, earlier this year, we indicated we plan to meaningfully increase our total capital expenditures to an estimated range of $250 million-$300 million in 2024 to capitalize on the automation and higher-margin growth opportunities we see in each of our segments. So far this year, we've already approved $200 million of projects with another $100 million of requests in the pipeline for evaluation. The timing of our investments may vary, however, as a result of lead times for equipment, as well as the time needed for site selection in the case of investments in new locations. Finally, we continue to pursue a pipeline of M&A opportunities that are a strong strategic fit while providing higher margin, return, and growth potential. Recently, we've seen more activity in the pipeline, which is encouraging. As a reminder, our first priority is to grow through M&A, but if the opportunities aren't present or valuations aren't appropriate, we will pivot to greenfield growth, which we've considered in our CapEx targets. I'll finish up with comments about our outlook for the rest of the year. We believe the soft demand and competitive pricing we're currently experiencing will continue for the balance of the year, which will make for more challenging unit sales and profit comparisons. Further, we anticipate any reduction in interest rates will not have a significant impact on market demand until sometime in 2025. For the balance of the year by segment, we anticipate demand in retail will decrease mid-single digits, packaging will decrease mid to high single digits, and construction will increase low to mid-single digits, reflecting the continued strength of the factory-built unit. Finally, we believe we'll continue to gain market share in each of our segments that will help offset the impact of lower demand. While we manage through more challenging conditions in the short term, we remain confident in our long-term growth and margin potential and will continue to invest wisely to capitalize on these opportunities. That's all I have on the financials, Matt. Thank you, Mike. And just to clarify, I think the dividend that was recently approved is payable in September, not in June, so just wanted to clarify that. And now I'd like to open it up for any questions that you may have. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. One moment while we compile the Q&A roster. And our first question will come from the line of Reuben Garner with Benchmark. Your line is now open. Thank you. Good morning, everybody. Good morning, Reuben. Hi, Reuben. There seems to be an increased focus, maybe just me picking it up in the press release or your comments this morning, but on market share gains. And I understand the story in Deckorators, for sure. I was wondering if you could kind of elaborate on some of the opportunities or thoughts you have in some of your other markets, whether it's construction or packaging. Sure. That's a good question. I think from a construction standpoint, again, we're trying to drive some new product, some innovation. You mentioned the ReCreate brand for manufactured housing. Factory-built opportunities appear to be much stronger. Again, we've reiterated this many times, but the affordability of factory-built housing is a very positive outcome, we think, and it's going to continue to drive more housing that direction. One of the reasons we believe that housing is struggling to meet the needs is because of the affordability factor, and we think factory-built has an advantage there. So very optimistic. On the site-built side, again, the opportunities, as Mike mentioned, are geographic expansion. are markets that we're not in today that people are migrating to, and we think those are going to be very strong going forward as well. On the packaging side, we're trying to rationalize not only our facilities but also our customer base. There's many customers that we're working to gain share with. We're trying to win customers, and that's where we're going to pursue the market share gains. There may be others that we can't get low enough in price to make it work for both the customer and for ourselves. That's where there's a balance within the packaging space. I think also on packaging is the protective packaging materials and the opportunities in alternative materials such as steel that we want to take a look at and grow with. They serve a different customer and provide some different opportunities for us as well. So that's a quick overview, Reuben. Great. And then you mentioned competitive pricing pressures, I think, in the packaging business. What about in retail and in construction? Anything that you would call out in either of those end markets from the competitive pressures? I know pricing was down year-over-year, particularly in construction, but more on a sequential basis. Have you seen any kind of competitive pressures pick up in either of those end markets? Yeah. I guess what I would say there, Reuben, is that within the big box segment, the pricing are adjusted based on lumber market. So there's already rationalization on the price side. With respect to construction itself, there's adjustment periods every 90 days or so. So I think those largely get adjusted based on market trends and market changes. Not to say that there aren't some there, but I think they're much more manageable at this point. Got it. Thanks for the detail, guys, and good luck through the rest of the year. Thank you. Thanks, Reuben. Thank you. One moment for our next question, and that will come from the line of Kurt Yinger with D.A. Davidson. Your line is open. Great. Thank you, and good morning, everyone. Morning, Kurt. Hey, Kurt. I wanted to start out with Deckorators. And Matt, you had made a comment in the prepared remarks around maybe some shift in customer composition, and it kind of dovetails into what has been some discussions around some shelf space movements for 2025 following line reviews. And I guess I'm just wondering, are you expecting any changes in your retail positioning heading into next year? And if so, how should we think about kind of sizing that impact? Yeah. It's a good question, Kurt. I think obviously product line reviews are a process, and we go through those periodically. We're in the midst of those now. What we believe is we're going to increase our overall volume. I'm not going to comment on where or how at this point, but we're very optimistic about the future. And I think the other part, excuse me, for Deckorators is that we have a number of opportunities with new products that we just haven't had the capacity to go after. So it's really a twofold. We think we're going to increase sales of current products, but we also see an opportunity for a lot of new products, and that's what we're excited about. Excuse me. Got it. Okay. I guess the earlier question kind of touched on competitive pricing activity and site-built. Would you say that pressure is accelerating or pretty consistent at this stage? If you just look at kind of the single-family numbers, it's not robust, but it seems like a pretty healthy market overall in terms of the starts levels. Is it the slack kind of capacity from multifamily freeing up? Is it new facilities, expansions kind of across the industry creating some supply mismatch? I mean, what would you say is kind of driving that overall pressure? Well, I agree with your assessment. I think single-family is solid. Multifamily decline is probably creating some capacity availability, and I'm sure folks are trying to fill that capacity somehow. So to the extent there's pressure, I think that's where it's coming from, at least at this point. Got it. Okay. And then just last one. On the retail side, I mean, it was another impressive gross margin quarter despite what I think would be some level of headwind from the trend in lumber prices on the treated business. I guess could you just give us a little bit more color around some of the operational improvements that you kind of referenced and where that margin enhancement's coming from? Yeah. That's a good point. What I would say, Kurt, is we're realizing a lot of the changes that were made when we went from a geographic-based to a market-based. We're seeing the retail team and the ProWood team in particular do a really good job of driving in efficiencies in their operations. They're utilizing best practices even better than they have in the past. So I think we're seeing a lot of operational efficiencies driving it in, and I think there's more of that to come through equipment enhancements. And I think the market itself, as I mentioned before, I think to the extent that we're selling through box, prices are pretty much determined. So I think at this point, we're just trying to be as efficient as we can, make sure we're keeping our SG&A costs in line, and drive as much improvement as we can. Okay. Adding on to that for a minute, Kurt, as a reminder, the Spartanburg and the Sunbelt plants were purchased a few years ago, and squeezing out the operating improvements in those businesses was going to take time. So part of the driver for the operating improvements is just continuing to enhance the operations of those facilities. Got it. Okay. Appreciate the color, guys, and good luck here in Q3. Thank you. Thanks, Kurt. Thank you. One moment for our next question. That will come from the line of Ketan Mamtora with BMO. Your line is now open. Thank you, and good morning. Why don't we start with Matt? If I heard you right at the start of your prepared remarks, you talked about kind of pretty meaningful investments. If I add all of them up, it sounds like about $1 billion. Can you give us some sense of what kind of timeline you're looking at and what kind of return expectations you have from these investments? Yes. I think Ketan, as we looked at where we want to grow, each of our business units has solid strategic runways they want to pursue. Our typical first preference is M&A-type transactions because they get us into the space quicker. They bring more people with them, and they bring quicker returns generally. So because of the pricing in that marketplace, we're just taking their plans, and we're pivoting towards either organic or greenfield-type opportunities. For us, we called out 24 months, but maybe slightly longer than that, maybe slightly quicker, depending on how much we can deploy and where the opportunities are. The main focus is trying to show for our investors that we have a plan to deploy that capital to provide the returns that we historically have provided. As everyone knows, it takes a little longer to get a greenfield or an organic-type operation up to ROI than if you acquire something at a reasonable price. We think long-term, it's going to continue to drive the value and will make us more profitable, less goodwill, and better results. All right. So right. So did I hear you right that this is over the next two years, or this is kind of spread over a longer time frame, Matt? Y eah. It's like I said, Ketan, that the—yeah. And I'll have Mike kind of chime into it. I think we set out five-year targets. We want to be able to allocate areas over the next 24 months where they should go. And we have a lot of requests for capital, but we're going to prioritize and go through that process. So within the next 24 months, to the extent that we haven't deployed it, we will have to plan for where it's going to be deployed. Got it. Okay. There's always kind of a lag, Ketan, between the time where you've got your plans squared away and when the spend actually occurs. So the way that I think about it is we laid out our five-year targets for unit sales growth and EBITDA margin and returns. In order for us to achieve those targets, this is the capital that'll need to be deployed. I see. Okay. Understood. No, that makes sense. Then just focusing a little more on the packaging side and understand that the markets are challenged right now. But curious, as you think about sort of the growth there and the investments there, has your sort of thought process changed at all in terms of through cycle earnings and margins in the packaging business? I know in the past you've talked about packaging as being a key area of growth. You've clearly highlighted kind of more investments there. But margins, at least, and volumes in the last six quarters or so have come under a lot of pressure. So how do you sort of balance sort of investments versus what's going on in the market today? Yeah. What I would say, Ketan, and I'll ask Mike to add some color to this too, but we focus on the EBITDA margin in that space, and we still believe that that can be a very strong EBITDA margin business. Right now, getting demand and capacity in line is our priority. I think once we get there, that will improve. The market's going to be what it is right now. I think it's just generally, it's a little more challenged today. But we think long-term, it'll revert back to more of a normal market conditions, and there's still consolidation opportunities in that space. So if demand remains lower for longer, that'll create consolidation opportunities as well. Mike, any color you want to add to that? Yeah. Ketan, I think I'd just kind of maybe dive into the details on the margins and how they've changed. One factor that I look at is cost variances. We employ standard costing here, and so I can see unfavorable cost variances coming through all the different facilities within packaging. And for the first six months, it was $20 million. So that annualizes to a pretty big number. And I think being able to take a step into capacity consolidations and trying to get our cost structure appropriate and optimized for demand, there's a big margin lift there. And then making these investments in the business that Matt talked about that prepare us for more growth and being able to leverage volume increases over time in the future. That's very helpful. I'll turn it over to Matt. Thanks, Ketan. Thanks, Ketan. Thank you. One moment for our next question. And that will come from the line of Stanley Elliott with Stifel. Your line is now open. Hey, good morning, everybody. Thank you all for the questions. Can you talk about the new products you guys are working on? How are these margins stacking up versus the rest of the portfolio and the importance in kind of reaching the 12.5 kind of longer-term target on EBITDA? Yeah. That's a good question. And as Mike indicated in his remarks, we do have a higher target return for new products, and all the new products are meeting that higher target. So I think that's a plus. And I think the ones we're working on, the whole idea is to provide more value-add to the customer, create more non-price competitive advantage on the products we're working on, and to help drive that growth and improve and lift the EBITDA margins. So all the ones that we've called out for new products thus far are destined to meet that target. And on the capacity plans, the $1 billion or so is the right way to think about it kind of ±$200 million or so of growth, and $100 million or so of maintenance CapEx and some of the timing, whether sites or other facilities, that's going to be kind of the determining factor? I think that we talked a little bit. The numbers that I put out there are in addition to the normal maintenance replacement-type CapEx. Obviously, we plan to generate significant cash flow each year too. So we will have ample capital to do even more than what we're outlining here. But that's the distinction I would call to that one, Stanley. Mike, anything to add there? No, that's exactly right. And then last for me, cost, a big focus kind of in this environment up and down the portfolio. Any ballpark on kind of what we should think on a cost out for this year or maybe how it manages on the SG&A piece, just trying to get a sense for kind of what sort of costs are going to be coming out over the next year, year and a half? Yeah. I'll start here, Kurt, or start here, Stanley, and let Mike kind of finish up. But I think we talked about tying SG&A into our historical percentage of gross profit kind of metrics or sales. And then also, Mike just called out another $20 million or so of opportunity, I'll call it, within the unfavorable variances. So I think those are two data points that I would say are important. Mike, what else would you add there? Yeah. Stanley, I don't have an overall target for you, but we'll be looking back at our SG&A relative to sales and unit volume, SG&A relative to gross profits. And we want to be able to get back to the types of levels we saw pre-pandemic. And so that'll be our focus. And I would expect to start seeing those improvements in 2025. Perfect, guys. Thanks so much, and best of luck the rest of the year. Thanks, Stanley. Thanks, Stanley. Thank you. One moment for our next question. That will come from the line of Jay McCanless with Wedbush. Your line is now open. Hey, good morning, guys. Thanks for taking my questions. The first one, Matt, this expansion in Deckorators, even though you guys are still seeing negative sales trends in retail, is this more of a specific call that you think you have something in Deckorators that's going to be new and different to the market, or is this a larger call that retail demand is going to start getting better from here? Yeah. I guess what I would say, Jay, is it's the former. We believe we have something special with our Deckorators, with our Surestone technology. It's the patented technology, and no one else has it. And for us, we see a tremendous amount of opportunities, and we think it's just the right time to really invest in those opportunities and help it grow even faster than originally scheduled. It's not a broader statement that the retail market's going to miraculously do the hockey stick up and to the right in the next six months. But long-term, we still think it's going to be strong, but we expect our Deckorators brand to outperform. Okay. That's great. Thank you. And then the second question I had, when you talked in the prepared comments about expanding UFP construction, I guess, where are you going with this? And is it going to be in smaller markets or a larger geographic focus in parts of the country? Maybe walk us through where you're planning on expanding. Sure. That's a good question, Jay. And I guess what I would say is we've been much more regionalized with our site-built group. And so it's been primarily the non-urban Northeast, the Southeast, Mid-Atlantic area, Texas, and Colorado. You'll recall many years ago, we exited California and Nevada, Arizona, the boom and bust-type markets, we call them. And one of the things we're looking at is the demographic trends where people are moving to. It's creating a lot of opportunities. And that's where we're looking to head, is we're going to try to do a little Wayne Gretzky and go to where the puck's going to be, not where it is right now. And so we see several markets that we're working on where they're getting an influx of residents. That sounds great. And then the last question I had, on lumber, I'm like you, Matt. I think it seems weird that we haven't seen more talk of curtailments or plants reducing activity. I guess, how much longer do you think it takes till we start seeing some of that, especially if single-family starts continue to kind of be, I mean, good but not great type of market environment? Yeah. I think, as Kevin told me yesterday, I think the curtailments are going to be a little slower to develop. I think there's still capacity coming online, which is going to be new and modern and much more efficient. And so I would expect curtailments to happen in some of the older facilities. And I think right now, everyone's kind of waiting to see who blinks first. But there will have to be curtailments unless demand picks up. Okay. Great. That's all I had. Thanks, guys. Thanks, Jay. Thank you. Thank you. Speakers, I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Matt Missad for any closing remarks. Well, I'd like to thank you again for spending the time with us today. While the short-term outlook is full of potential changes, long-term, we remain on offense and committed to do, in the words of Imagine Dragons, whatever it takes to make our company more valuable. Thank you for your investment in us, and we'll keep working to ensure great long-term returns. Have a great day. This concludes today's program. Thank you all for participating. You may now disconnect.