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American Woodmark Corporation (AMWD) Q2 2022 Earnings Call Transcript

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AMWD earnings call for the period ending October 31, 2021.

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American Woodmark Corporation (AMWD 3.93%)
Q2 2022 Earnings Call
Nov 23, 2021, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to the American Woodmark Corporation Second Fiscal Quarter 2022 Conference Call. Today's call is being recorded November 23, 2021. During this call, the Company may discuss certain non-GAAP financial measures included in our earnings release, such as adjusted net income, adjusted EBITDA, adjusted EBITDA margin, free cash flow, net leverage and adjusted EPS per diluted share.

The earnings release, which can be found on our website americanwoodmark.com includes definitions of each of these non-GAAP financial measures, the Company's rationale for their usage and a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures.

We also use our website to publish other information that may be important to investors, such as investor presentations. We will begin the call by reading the Company's safe harbor statement under the Private Securities Litigation Reform Act of 1995. All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors that may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements.

Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission and the annual report to shareholders. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

I would now like to turn the call over to Paul Joachimczyk, Vice President and CFO. Please go ahead, sir.

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Paul Joachimczyk -- Vice President and Chief Financial Officer

Good morning, ladies and gentlemen, and welcome to American Woodmark's Second Fiscal Quarter Conference Call. Thank you for taking the time to participate. Joining me today is Scott Culbreth, President and CEO. Scott will begin with a review of the quarter and I'll add additional details regarding our financial performance.

After our comments, we'll be happy to answer your questions. Scott?

Scott Culbreth -- President and Chief Executive Officer

Thank you, Paul, and thanks to everyone for joining us today for our second fiscal quarter earnings call. Our teams continue to navigate a challenging labor, logistics and supply chain environment.

Second quarter sales were up 1% with demand continuing to outpace production across all platforms. The ability to match demand remains limited by two factors; labor and material availability. Material shortages led to unplanned downtime and efficiency loss due to substitutions that were made to continue production. International shipping container challenges also persist with higher rates and longer delivery times due to port congestion.

Backlog increases slowed but still represents an increase versus the prior quarter. Going forward, production levels continue to increase and drive incremental sales over the next two quarters. Our teams will continue to invest in production capability and capacity, the outsourcing staffing additions and productivity improvements.

Within new construction, our business grew 7.1% versus prior year. Strong order growth is expected to continue across our markets. Capacity of the manufacturing trade base to keep up with demand and rising prices could slow future build rates and these factors continue to increase the build cycle time.

We are monitoring lot supply, community growth count -- sorry, community count growth, the consumer price index, which has increased 6.2% over the past 12 months, interest rate trends and decline in consumer sentiment, which has been tied to inflationary concerns.

Looking at our remodel business, which includes our home center and independent dealer and distributor businesses, revenue was down 2.7% to prior year. Within this, our home center business was down 3.5%. This was expected due to retailer stocking efforts in the prior year and timing of winter promo shipments coupled with labor challenges across the platforms. Our stock kitchen business performed well as pro and DIY demand drove positive comps. With regards to our dealer/distributor business, we were up 0.4% for the quarter.

Our adjusted EBITDA was $30.8 million with EBITDA margins of 6.8% for the quarter. Reported EPS of $0.12 and adjusted EPS of $0.62. This result fell short of our expectations for the quarter as labor constrained our ability to increase production as quickly as planned and we experienced $0.8 million of incremental costs related to the West Coast particleboard manufacturing facility closure. Attraction and retention efforts have positively impacted our made-to-order facilities and we have initiated manufacturing in several assembly cells that were idled over the summer due to labor shortages.

After several months of decline, our October production rates improved to the highest level seen since April and May. A similar increase in output from our stock facilities was realized in October as well. Our sourcing teams have secured particleboard supply from East Coast and are working to improve the logistics costs associated with those shipments. For the market we expect both new construction and remodel to grow for the remainder of our fiscal year. We will continue to take advantage of this growth and should a short-term reduction in demand impact the market, our backlog will allow us to maintain a higher production level.

We will improve margins in fiscal year '22. I shared last quarter that we were announcing additional pricing actions and those are now complete. After realizing approximately $3 million of impact in the first quarter of fiscal 2022 for pricing, that impact grew to approximately $14 million in the second quarter.

At our current sales levels, we expect the impact of our confirmed pricing actions to increase to over $35 million in the third fiscal quarter and over $50 million in the fourth fiscal quarter. Additional efforts will continue within our operations team to improve productivity and increase production levels. Sequential margin improvement is forecasted for each of the next two quarters with our fiscal fourth quarter comping positively versus prior year.

Our team presented an exciting update of our strategic plan last week to the Board. The Board remains very engaged with our leadership team in shaping our strategy. Our focus areas have not changed from what I presented during our May earnings call, and we are working to accelerate key initiatives to strengthen the business.

Investments will continue in our digital online capabilities and products while we focus our resources on the enablers of customer experience, platform design, talent, and ESG efforts. These will contribute to incremental revenue growth and improve adjusted EBITDA margins back to our target of 14% to 15%.

In closing, I'm proud of our employees for what they've accomplished and challenges they have overcome. I look forward to their continued contributions. I will now turn the call back over to Paul for additional details on the financial results for the quarter.

Paul Joachimczyk -- Vice President and Chief Financial Officer

Thank you, Scott. Financial headlines for the quarter. Net sales were $453 million, inclusive of $14 million of price, representing an increase of 1% over the same period last year. New construction net sales increased 7.1% for the second fiscal quarter compared with the same period in the prior year.

Timberlake direct business comped positively for the quarter and the first half of fiscal year 2022. We continue to experience growth in our Origins line related to the ongoing mix shift occurring toward the lower-priced products in the market.

Delays from the builder and their ability to receive our cabinets improved slightly within the quarter. However, we continue to build our finished goods -- goods backlog higher than historical trends, which is impacting our inventory levels. Our frameless business continues to grow and has built a backlog of orders during the past two quarters, primarily due to logistical and supply constraints on the West Coast.

New construction sales were above market completions during the second quarter of fiscal 2022. We are experiencing a 90 to 120 day plus lag between start and cabinet installation. The overall market starts in single-family homes were up 14.8% for our fiscal second quarter.

Looking at completions during our second fiscal quarter, we saw a 3.4% increase year over year, which further supports timing impacts the market is experiencing and our continued growth in the new construction channel. The combined home center and independent dealer distributor channel net sales decreased 2.7% for the quarter, with home centers decreasing 3.5% and independent dealer and distributor increasing 0.4% for the quarter.

Within both the new construction and repair and remodel markets, we continue to see consumers focusing on larger investments within their homes. Whether it is kitchens or baths, we expect this trend to be extending as the time to complete projects have been impacted due to the global supply chain and labor challenges in the building product space.

Net income was $2 million or $0.12 per diluted share in the second quarter of fiscal year 2022 versus $23.1 million or $1.36 per diluted share last year. Net income for the second quarter of fiscal 2022 decreased $21.1 million due to the rapidly evolving inflationary pressures outpacing our pricing actions taken across all our channels.

Given the increased backlog of our products, there is an inherent lag in the realization of our pricing actions that we have executed to offset the inflationary pressures we experienced late in fiscal 2021 and continued into fiscal 2022. Adjusted EBITDA for the second fiscal quarter of 2022 was $30.8 million or 6.8% of net sales compared to $66.1 million or 14.7% of net sales for the same quarter of the prior fiscal year.

The Company's gross profit margin for the second quarter of fiscal 2022 was 11.4% of net sales versus 20.2% reported in the same quarter of last year. Gross margins in the second quarter of the current fiscal year was negatively impacted by the rapidly evolving inflation in material and logistic input costs combined with the labor challenges that impacted our production capabilities.

Total operating expenses were 10.2% of net sales in the second quarter of fiscal 2022 compared with 11.5% of net sales for the same period in fiscal 2021. Selling and marketing expenses were 4.8% of net sales in the second quarter of fiscal 2022 compared with 4.8% of net sales for the same period in fiscal 2021.

General and administrative expenses were 5.4% of net sales in the second quarter of fiscal 2022 compared with 6.7% of net sales for the same period of fiscal 2021. The decrease in the ratio was primarily driven by lower employee incentive costs and controlled spending in the second quarter of fiscal 2022.

Free cash flow was negative totaling $37.3 million for the current fiscal year compared to positive free cash flow of $57.4 million in the prior year. The decrease was primarily due to changes in our operating cash flows specifically, lower net income, higher inventory balances and lower accrued expenses.

Our inventory balances have grown on our raw materials in an effort to build additional safety stock of key critical components. Net leverage was 3.02 times adjusted EBITDA as of the end of the second fiscal quarter. For the fiscal year, the Company paid down $19.7 million of net debt and we repurchased $25 million or 300,000 shares.

The Company's cash position as of October 31, 2021 was $8 million of cash on hand and access to $233 million of additional availability under our revolver. In fiscal 2022, our first half performance impacted our normal expectation on free cash flow for the fiscal year. We plan to continue our investment back into the business by maintaining our prior outlook on our capital investment rate of approximately 3.5% of net sales for the full fiscal year.

We expect the full year fiscal 2022 sales to be high single-digit growth over the prior fiscal year. The growth rate is highly dependent upon overall industry, economic growth trends, material, logistics and labor constraints as well as consumer behaviors that can be impacted by the ever-changing COVID-19 environment.

Margins will continue to be challenged in the next two quarters due to continued inflationary, logistics, and labor challenges. However, our expectation is that margins will improve sequentially through the remainder of the year. Our pricing actions will be fully realized by the fourth fiscal quarter representing $50 million plus of total pricing completed across all sales channels that were completed within our second fiscal quarter 2022.

Given the lag on pricing realization, it takes on average three to six months to realize price increases to fully offset the cost impact of inflationary pressures. The trend of higher inflation could pose a future risk to this outlook as the macroeconomic factors remain unstable.

In closing, a tremendous thanks to our team members who have continued to deliver the extra efforts to make it happen in this challenging environment. This concludes our prepared remarks. We'll be happy to answer any questions you have at this time.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question will come from Garik Shmois from Loop Capital. Please go ahead.

Garik Shmois -- Loop Capital Markets -- Analyst

Hi, thanks for taking my question. On your high-single digit sales growth outlook for the year, correct me if I'm wrong, is that up from the guide last quarter, I think it was mid-to-high single-digits? And if so, what's the incremental differences at just the additional pricing you're putting through. And maybe just speak more broadly to your level of confidence on that guide, just given some of the volume headwinds you've experienced?

Paul Joachimczyk -- Vice President and Chief Financial Officer

Yeah, Garik, this is Paul. Last quarter we did guide mid-to-high single digits. This quarter, we revised that guidance to be high-single digits and we did up our guidance that is out there and our outlook mainly due to the confirmed pricing actions that we did complete and then -- and our confidence in the production abilities that are out there.

Garik Shmois -- Loop Capital Markets -- Analyst

Okay, thank you. And I guess my follow-up question is just around the volume in the quarter. I don't know if you could provide maybe a little bit more color on how much of the impact was the labor shortfalls, how much was some of the supply chain headwinds. I think you had cited particleboard both in your prepared remarks and in the release. And then how much of that was just the extent of the lag between starts and cabinet installations?

Paul Joachimczyk -- Vice President and Chief Financial Officer

Yeah. So, I really wouldn't attribute any of the sales miss to our estimates for the last point you made. I would attribute it primarily to labor shortfall. I think our team did a good job of overcoming most of the material availability challenges that we experienced inside the period, but by far and away the biggest impact would be the labor shortfall.

Garik Shmois -- Loop Capital Markets -- Analyst

Okay and then just a follow-up on the labor piece. Are you, just given the actions that you've been taking at a point now where your labor is where it needs to be or I guess how much more do you need to invest in labor to meet demand?

Paul Joachimczyk -- Vice President and Chief Financial Officer

It's unclear how much we'll have to invest to continue to see labor. What I'll take you back to is my earlier remarks that we've seen an improvement. So our actions are starting to work. We've seen an improved -- an improvement in our production levels as a result of that. We need to continue to make progress on that. So we still had open positions across our platforms that we're seeking to fill, whether that will come at the current wage rates or adjusted wage rates, I don't have an ability to frame that for you.

Garik Shmois -- Loop Capital Markets -- Analyst

Okay, thank you and happy holidays.

Paul Joachimczyk -- Vice President and Chief Financial Officer

Thank you, Garik.

Operator

And the next question will come from Steven Ramsey with Thompson Research Group. Please go ahead.

Steven Ramsey -- Thompson Research Group -- Analyst

Hi, good morning. On the Q3 margin, thinking about that and kind of the new bridge into the Q4 pricing coming through, can you explain the messaging around the embedded pricing that's in the backlog if that is playing out in a different way than what you discussed in the prior call. And if so, what is driving the changes there?

Paul Joachimczyk -- Vice President and Chief Financial Officer

Yeah. No real change in how the backlog is going to be consumed. What has changed is, second round of pricing now being confirmed and starting to build inside the backlog. So the two points we wanted to highlight is incremental pricing to us -- our total pricing that will be realized in the quarters, over $35 million in Q3, over $50 million in Q4 and as a result, we do expect sequential margin improvement off of what we just delivered in Q2 over the next two quarters.

Steven Ramsey -- Thompson Research Group -- Analyst

Okay. Okay, helpful. And then, on the balance sheet, can you comment with cash being lower than normal, the receivables still elevated as well as payables. Is this something that unwinds naturally as the backlog burns off and maybe can you go into a little more detail how much of the inventory is the finished goods you discussed, how much of it is in-transit inventory is being elevated or other factors contributing?

Scott Culbreth -- President and Chief Executive Officer

Yeah Steven, Our impact has seen a little bit in different ways that are out there. For the receivable balances, there is no issues on anything in regards to collections or anything like that. Really, it has to do with the timing of the increased sales as we get more price to the channels, we get increased sales through there, perceived balances will naturally grow as we really kind of create more operational activities for the business.

Really the drain on our working capital was related to our inventory balances. There was a couple of factors that played into that and one of it is the timing of shipments coming in from the international ports and duties and then just containers being stuck at ports. So, we've actually prepaid for a lot of those inventory, but we also made a conscious choice, as an organization, to stock up on key components for those raw materials.

So the spike that you'll see on our balance sheet really is focused around our raw material growth. There is some finished goods inventory that did grow due to the builder channels that are out there. In regards to just some of the inventories that they couldn't take for completions through the end of the quarter for their perspective. But all-in-all, you'll see our balance sheet is going to be effectively used to bolster up that inventories to complete and work down our backlog in the future months coming up.

Steven Ramsey -- Thompson Research Group -- Analyst

Excellent. And then last one for me to make sure I understand. Are backlogs currently -- how do they compare to Q1 and now that you're entering maybe a seasonally slower period, is this the time where you can show improvement in the shipment to order ratio and be in a better position to take orders as you get into the busy season of 2022. And maybe one more additional, are there any cancellations from customers?

Paul Joachimczyk -- Vice President and Chief Financial Officer

Yeah, I'll take the last part, no material change in cancellations. We're not seeing that to be a factor. Specifically around the backlog, it is elevated, we're at all-time highs, as I mentioned in my remarks, they still grew inside the quarter but it was a much slower rate of growth than what we've seen in the prior couple of quarters.

We will start chewing into that backlog as we go forward. So as our production levels increase and, to your point, you have this naturally slower time period typically around remodel, over the winter months we'll have an ability to start to chew into that backlog and get back to the lead times we want to be able to communicate going forward.

Steven Ramsey -- Thompson Research Group -- Analyst

Excellent. Thank you.

Operator

Thank you. And the next question will be from Adam Baumgarten from Zelman. Please go ahead.

Adam Baumgarten -- Zelman & Associates -- Analyst

Hey guys, thanks for taking my question. Could you dig into that promotional timing that you cited in the release and on the call and is that pulled forward last quarter or is it pushed out into 3Q? Just some more color on that would be helpful.

Scott Culbreth -- President and Chief Executive Officer

Last year it was, it was heavier shift inside the -- in the Q2 period and this year, it's more of a heavy shift inside the Q3 period.

Adam Baumgarten -- Zelman & Associates -- Analyst

Okay. Got it. That's helpful. And then just -- you talked about on the last call, trying to compress the time it takes to execute these price increases. I think your target and I'm sure it will take time as it was a couple of months, any progress you've made there in some of these negotiations that we can maybe think about for the future.

Scott Culbreth -- President and Chief Executive Officer

So, we did compress the timing in the two channels that we need to target that in. That is why you're seeing us take up the guidance and expectation around pricing as we go forward. So, we were able to achieve our goals there. Should a third or fourth increase ever be required going forward, we'll continue to take learnings from that and try to work that to be even tighter in the future.

Adam Baumgarten -- Zelman & Associates -- Analyst

Got it. And then just maybe walk us through your confidence in returning to margin expansion by year-end. Is it a continuation of current cost trends and labor shortages or is there some kind of improvement from a cost perspective combined with the raised pricing that gives you the confidence?

Scott Culbreth -- President and Chief Executive Officer

So obviously, the pricing is a huge lever when you think about what we expect to see from a margin improvement standpoint in the second half of the year. I think the pace of inflation has been slow. It's not going to zero, but it certainly seems to have moderated as of late. It's not to say there won't be more inflation in the second half, but I don't think it's going to be as severe as we experienced inside the first half. We've seen improvement in the hiring efforts here as of late. So our expectation is for that trend to continue. And then finally, we do have some new saving projects either capital related or product related that we'll start to see some benefit in the second half of the year. So all of those factors combined drive the expectation for a sequential margin improvement.

Adam Baumgarten -- Zelman & Associates -- Analyst

Got it. Thanks a lot.

Scott Culbreth -- President and Chief Executive Officer

Yeah, thank you.

Operator

[Operator Instructions] The next question will come from Collin Verron from Jefferies. Please go ahead.

Collin Verron -- Jefferies LLC -- Analyst

Good morning and thank you for taking my questions. I was just hoping you could -- wondering if you can quantify the cost headwind that you guys experienced in fiscal 2Q and just what you've seen so far in November relative to what you guys have seen in the fiscal second quarter. And then just on the guide for sequential margin improvement, can you help us think about the magnitude of that margin improvement from fiscal 2Q to fiscal 3Q?

Scott Culbreth -- President and Chief Executive Officer

So, unfortunately, I am not going to give you a lot of noes. So, on the last question specifically around a precision or a range around the margin improvement, I don't want to provide a specific value on that because there are so many unknowns. I will just reiterate sequential margin improvement expectations over the next two quarters and again with the fourth quarter comping positively versus prior year.

So, we don't want to provide any more granularity beyond that, specifically inside our fiscal second quarter, the exact amount of inflation, I don't have that to call out for you today. I'll just reference pricing again that we did realize of over $14 million and nothing specifically to report this year around. Then to your question with inflation and the number, nothing that I would call out specifically around that at this point in time.

Collin Verron -- Jefferies LLC -- Analyst

Okay, understood. And then, just can you give us a sense of what sales could have looked like if you did not have those labor and supply chain issues. And just given those current headwinds, can you just talk about your ability to increase shipments in this type of environment or is fiscal 2Q really the ceiling from a volume perspective, just given the shortages that you're seeing?

Scott Culbreth -- President and Chief Executive Officer

Yeah, I think another $10 million to $15 million of top line was certainly possible inside the quarter, if you wouldn't have some of the challenges in the first half of the fiscal quarter. This by no means is our ceiling. We have expectations to continue to see production levels increase across all of our platforms, which will continue to drive incremental revenue in future quarter's absence of the price.

So we're not in peak at this point in time. If you reference my comment earlier, we had assembly cells in our made-to-order platform that were idle over the summer. We started to ramp those back up. They're not at full ramp at this point in time. It takes time to obviously hire and then train and then get the efficiencies on that. So we expect continued improvement.

Collin Verron -- Jefferies LLC -- Analyst

Great, thank you.

Operator

[Operator Instructions] Our next question comes from Josh Chan from Baird. Please go ahead.

Josh Chan -- Robert W. Baird & Co. -- Analyst

Hi, good morning, Scott and Paul.

Scott Culbreth -- President and Chief Executive Officer

Hey, good morning, Josh.

Josh Chan -- Robert W. Baird & Co. -- Analyst

Good morning. So your pricing comments were pretty encouraging. Could you give us any color in terms of how the price kind of distributes between the channels, are they pretty even? And then also, how do you think about the potential impact of customers possibly trading down because of the price increases like this. Is that something you expect to happen?

Scott Culbreth -- President and Chief Executive Officer

Yeah. So, on the pricing itself, I'd say is fairly even based on channel. So, I don't have anything specifically to call out that was materially different result. On the customer side, what we've seen is really lead times, as we discussed and it's opposed to pricing. We're not getting a lot of pushbacks from a price standpoint on doing the job. What we're hearing is lead time is a barrier. So if you've got an extended lead time, consumers may not be willing to proceed the job. So that seems to be more of a focus area than it is on pricing, which is why we're so focused on increasing our production levels and getting lead times back down to our historical average.

Josh Chan -- Robert W. Baird & Co. -- Analyst

Right, that makes sense. Thanks, Scott. And then on the cash flow, recognizing that you're trying to service customers, how are you thinking about cash flow in the second half compared to what happened in the first half?

Scott Culbreth -- President and Chief Executive Officer

Yeah, Josh, our cash flows will get better in the back half of the year due to the timing of -- we won't be stockpiling inventories due to Asia holidays that are happening overseas and we're hoping that logistical challenges for the international containers and things like that will improve and it will free up some of our capital for those purposes. However, we still need to have some on-hand inventory to keep key critical components doing [Phonetic]. We'll make those choices to keep our overall customers happy.

Paul Joachimczyk -- Vice President and Chief Financial Officer

And net income will be substantially higher in the second half than in the first half.

Josh Chan -- Robert W. Baird & Co. -- Analyst

Right, right, that makes sense. Thank you. Thank you both for the color and have a good Thanksgiving.

Paul Joachimczyk -- Vice President and Chief Financial Officer

Thank you Josh.

Scott Culbreth -- President and Chief Executive Officer

Yeah, thanks, you too.

Operator

And the next question will be from Julio Romero from Sidoti and Company. Please go ahead. Julio your line is opened, perhaps your line is muted on your end.

Julio Romero -- Sidoti & Co. -- Analyst

Thanks very much. Thanks for taking the questions guys. Can you talk to substitution efforts for particle board? I believe in the past you were able to use MDF or plywood. Just any additional color there and is any of those substitute products in the safety stock you currently have?

Scott Culbreth -- President and Chief Executive Officer

Yeah, so it's not really a substitution across the different types of the wood you mentioned, plywood, MDF, and particle board. Really inside particle board right now with the challenges of size, so what's the optimal size that we require to run inside our factories from an efficiency standpoint as opposed to what's available in the market in mass quantities? So that's where we're seeing more of a substitution challenge, which creates inefficiencies inside the factory.

Julio Romero -- Sidoti & Co. -- Analyst

Got it. And I guess any additional granularity as to -- I know earlier you talked about your efforts to compress pricing and what you've done there. Just any additional granularity on how much time you may have shaved off? Did that compress by a week or a month?

Scott Culbreth -- President and Chief Executive Officer

Nothing specifically to disclose around that.

Julio Romero -- Sidoti & Co. -- Analyst

Okay, very good. Thanks for taking the questions.

Scott Culbreth -- President and Chief Executive Officer

Okay, thank you, Julio.

Operator

And thank you. As I do not see that there is anyone else waiting to ask a question, I would like to turn the line back over to Mr. Joachimczyk for any closing comments. Please go ahead, sir.

Paul Joachimczyk -- Vice President and Chief Financial Officer

Since there are no additional questions, this concludes our call. Thank you for taking the time to participate.

Operator

[Operator Closing Remarks]

Duration: 30 minutes

Call participants:

Paul Joachimczyk -- Vice President and Chief Financial Officer

Scott Culbreth -- President and Chief Executive Officer

Garik Shmois -- Loop Capital Markets -- Analyst

Steven Ramsey -- Thompson Research Group -- Analyst

Adam Baumgarten -- Zelman & Associates -- Analyst

Collin Verron -- Jefferies LLC -- Analyst

Josh Chan -- Robert W. Baird & Co. -- Analyst

Julio Romero -- Sidoti & Co. -- Analyst

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