Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Good morning, Matt, Mike, and Dick. The first question, perhaps starting with Deckorators, I saw that you talked about volumes up 4%, yet sales were up 10%. So it's the balance price? Is it mix? Can you just give a little bit more color on that?
A: (Michael Cole - CFO, Treasurer) Yes, it's both. The Surestone product continues to have strong growth rates, and it's getting to the point where it's almost as large as the WPC product we sell. And obviously, that comes at a higher price, and that's caused the higher sales increase than the unit increase.
Q: Any thoughts on the pricing trend by affecting the construction industry? Like how far do you project prices within the segment to decline before reaching a state of stability?
A: (Matthew Missad - CEO) I think if we consider the overall construction market, and we look at the pricing metrics, what you're seeing now is a more normalized view today. I don't expect a lot of change relative to where we are in the current state.
Q: Focusing on SG&A, could you outline your strategy for managing SG&A expenses relative to sales over the next year or so, especially in the context of incremental investment. How would you report to us in a challenging environment?
A: (Matthew Missad - CEO) We focus on SG&A costs every day, with built-in safeguards with respect to incentive compensation, which tends to be a large variable cost item for us. We are making several investments on the SG&A side, in innovation and new products and marketing, because we believe that's going to drive much more value in the future.
Q: Thank you. Good morning, everybody. So I guess, first, a clarification, Matt, on the construction pricing. Were your comments about, kind of I think you said something about locked in pricing. Was that multi-family side of your business that would have changed dramatically on a year-over-year basis?
A: (Matthew Missad - CEO) Yes, multifamily projects have a longer lead time. So in a market where it's high and then declining, obviously, that creates opportunity for the expansion of margin.
Q: On the retail side, a pretty meaningful change in your outlook in a couple of months, and I think you referenced more conservative inventory positioning from your customers. Just any color there -- more color there on what you're seeing or hearing?
A: (Matthew Missad - CEO) We were expecting interest rate to come down a bit from the Fed. That doesn't appear to be happening. So that's the largest single issue. We're just basically reflecting the difference and we're looking at what we're seeing. We're talking to our customers. They are indicating a change from what even we had a couple of months ago because of the interest rate expectations.
Q: Great. Thanks, and good morning, everyone. I just wanted to go back to site built and hopefully put a bow on it, but you talked about pricing and the idea that from a competitive standpoint, it seems like things have kind of stabilized there. Is there a tail impact from the multi-family dynamics that may continue to weigh on margins even though pricing is generally stable at this point?
A: (Matthew Missad - CEO) If demand stays relatively in this range, that the pricing should stay relatively in this range.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
