IBP(US:IBP)2022-02-26 16:40Financial Data and Key Metrics Changes - For 2021, revenue increased by 19.1% to nearly $2 billion, net income per diluted share rose by 22.6% to $4.01, and adjusted EBITDA increased by 16.2% to $285.4 million [11][12][35] - Fourth quarter net sales reached a record of $533.7 million, a 20.9% year-over-year improvement, driven by price/mix increases, higher job volumes, and contributions from recent acquisitions [31][35] - Adjusted gross profit margin declined by 130 basis points to 29.3% due to inflationary pressures and material supply shortages [33] Business Line Data and Key Metrics Changes - Residential same-branch sales increased by 12.8%, with single-family same-branch sales growing by 14% [16] - Same-branch multifamily revenue increased by 6% despite a 12.5% decrease in U.S. multifamily completions [19] - Same-branch commercial sales decreased by 7.3%, with large commercial same-branch sales declining by 2.7% [32] Market Data and Key Metrics Changes - The backlog of total units authorized but not started was up 45% from December 2020, indicating strong demand in the housing market [18] - The company anticipates positive trends in the U.S. housing industry to support further growth in 2022 [18] - The commercial end market continues to be impacted by supply chain disruptions, but bidding activity remains stable [21] Company Strategy and Development Direction - The company focuses on profitable growth through acquisitions, having completed 12 acquisitions in 2021, representing approximately $211 million in annual revenues [25][43] - The acquisition of AMD Distribution is expected to enhance the company's supply chain flexibility and cost structure for insulation accessories [24] - The company plans to manage supply chain challenges effectively while continuing to expand its product offerings and geographic presence [26][27] Management's Comments on Operating Environment and Future Outlook - Management expects supply chain challenges to persist throughout 2022 but believes the company is well-positioned to navigate the inflationary environment [27][28] - The company is optimistic about the demand for insulation products, particularly in the fiberglass segment, while acknowledging challenges in the spray foam market [60][61] - Management anticipates mid-single-digit growth in completions for 2022, supported by a strong backlog [111][116] Other Important Information - The company announced a 5% increase in its quarterly dividend and a $0.90 per share annual variable dividend [44][45] - The share repurchase program was increased to $200 million, reflecting the company's commitment to return excess capital to shareholders [45] Q&A Session Summary Question: Will supply chain disruptions continue to impact gross margin? - Management anticipates slight improvement but expects supply chain issues to persist throughout 2022 [50][51] Question: How is pricing growth expected to continue? - The company is working hard to keep up with material price inflation and has seen improvements in fiberglass margins [53][54] Question: Can you elaborate on the AMD acquisition and its implications? - The acquisition aims to enhance supply chain flexibility and diversify revenue streams [68][69] Question: What are the dynamics with private builders compared to public builders? - Private builders are facing challenges in completing homes compared to production builders, but demand remains constructive [72][73] Question: How does the company view M&A opportunities in 2022? - The acquisition pipeline remains robust, with a focus on insulation contractors and complementary products [103][104] Question: What is the outlook for organic volume growth in 2022? - Management expects mid-single-digit growth in completions due to supply constraints, despite a strong backlog [111][112]