Pricing Headwinds and Outlook
Q: Can you quantify the price headwinds and when they'll normalize?
A: Pricing headwinds in specialty products were in the mid-teens for full year '23, higher in Q2 and Q3, and around 10–12% in Q4. In Q1, we're seeing about a 10% decrease, but it's improving slightly. We expect pricing to improve throughout the year and by year-end, we should be lapping the specialty pricing declines.

Digital Transformation Investment
Q: How will your digital initiatives impact operations and customers?
A: Our digital initiatives aim to reduce operating costs and enhance the customer experience. In 2024, we're focusing on transportation management to reduce logistics costs and launching an e-commerce platform starting with a pilot program. We'll invest $5 million in OpEx and at least $5 million in CapEx for these projects in 2024. The transportation management system is expected to have a strong IRR, paying off beginning in 2025.

M&A Strategy vs. Share Buybacks
Q: How do M&A valuations compare to share repurchase appetite?
A: M&A remains an important part of our growth strategy, and with 2023 numbers in, bid-ask spreads are compressing, bringing logic back to valuations. We are disciplined in capital allocation and have the opportunity to pursue both M&A and share repurchases. We have $91 million left on our current share repurchase authorization and will be opportunistic.

Demand Trends and Outlook
Q: Can you recover from Q1 volume declines due to weather?
A: January's adverse weather caused daily sales volumes to be down 10% over the first seven weeks. While we've seen improvement recently, it will be difficult to make up some of the lost volume. We expect positive seasonality as we move into March, but structural products still have a little bit to go.

Q: What are current Repair & Remodel demand trends?
A: We're hearing the same as what's publicly known; R&R is generally expected to be down mid-single digits. Our suppliers and channel partners reflect this consensus.

Q: What are smaller builders saying about their outlook?
A: Smaller regional builders feel tempered in the near term due to rates and recent weather impacts, but consistently believe the second half will be better.

E-commerce Initiatives
Q: Are you transacting business via e-commerce today?
A: Currently, we don't have our own e-commerce platform; all orders are done directly with our sales teams. However, we do participate through our home centers' or national accounts' platforms, fulfilling orders processed through their portals. We're exploring an e-commerce pilot for our customers to order efficiently through us, focusing on business-to-business transactions.

Greenfield Expansion Strategy
Q: What factors are important for greenfield success?
A: We're focusing on markets with strong housing starts and repair and remodel activity, especially in the West where we lack presence. Key factors include whether the market is favorable for two-step distribution and leveraging our private label brands and structural products. We'll be thoughtful and measured in our approach.

Specialty Pricing Pressure
Q: Is pricing pressure mostly in engineered wood products?
A: Specialty pricing deflation is predominantly in engineered wood products (EWP) and millwork. We are also seeing some pressure in industrial siding and outdoor materials, but it's mainly in EWP and millwork.

Supplier Partnerships Expansion
Q: What's the opportunity for expanding supplier partnerships?
A: We're working with strategic suppliers to expand our geographic reach, including markets where they're not currently located. These partnerships allow us to provide scalable solutions for all customers, including national accounts.