Greetings and welcome to the GMS Inc Fiscal Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms.

Leslie Kratcoski, Vice President, Investor Relations. Thank you. You may begin..

Thanks, Michelle and good morning and thank you for joining us for the GMS earnings conference call for the third quarter of fiscal 2020. I'm joined today by John Turner, President and CEO; and Scott Deakin, Chief Financial Officer.

In addition to the press release issued this morning, we have posted presentation slides to accompany this call in the Investors section of our website at gms.com. On today's call, Management's prepared remarks and answers to your questions may contain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements address matters that are subject to risks and uncertainties, many of which are beyond our control and may cause actual results to differ from those discussed today. As a reminder, forward-looking statements represent management's current estimates and expectations.

The company assumes no obligation to update any forward-looking statements in the future. Listeners are encouraged to review the more detailed discussions relating to these forward-looking statements contained in the company's filings with the SEC, including the Risk Factors section in the company's 10-K and other periodic reports.

Today's presentation also includes the discussion of certain non-GAAP measures, the definitions and reconciliations of these non-GAAP measures are provided in the press release and presentation slides. Please note that references on this call to third quarter of fiscal 2020 relate to the quarter ended January 31, 2020.

Finally, once we begin the question-and-answer session of the call, in the interest of time, we kindly request that you limit yourself to one question and one follow-up. With that, I will now turn the call over to John Turner.

JT?.

Thank you, Leslie. Good morning. Thank you for joining us today. I will begin today's call with a review of our operating highlights and then turn it over to Scott to cover our financial results in more detail. I'll then conclude our prepared remarks, before taking your questions. Turning to Slide 3.

Our third quarter results demonstrate our team's momentum and effective execution against the backdrop of what continues to be a favorable market. And we remain focused on our strategic priorities in order to capitalize on the growth opportunities in our industry.

Total net sales increased 5.2%, driven by robust volume growth across all four of our product lines, including an almost 9% increase in wallboard volume. This performance reflects solid demand conditions across our end markets in the U.S., where our total net sales increased 5.9%, including a double-digit increase in wallboard volume.

Partially offsetting the favorable U.S. volume growth was the continuation of a challenging pricing environment, notably, in steel and to a lesser extent in wallboard, along with some softness in Canada.

Organic net sales increased 3.8% with 4.8% organic growth in the U.S., driven by strong volumes, reflective of favorable end market demand and the execution of our organic growth strategies, focused on expanding share in our core products and growing penetration of our complementary other product lines.

While our Canadian operations were adversely impacted by unusually severe winter weather, notably in Western Canada, organic sales were down just 2%, a meaningful improvement from a decline of approximately 8% in the first half of the fiscal year.

This, coupled with forecasts for increased housing starts and non-residential construction over the next several years, provides us with encouragement that the declines we've experienced in Canada, which has muted our consolidated sales and profitability growth for the past several quarters, are beginning to be behind us.

We were pleased to report 90 basis points of gross margin expansion, driven by favorable price cost dynamics, as well as acquisition related purchasing synergies and mix.

As expected, SG&A as a percentage of sales was higher again this quarter, primarily due to the continuation of the year-over-year price deflation just mentioned and other ongoing cost pressures. In addition, we continue to make investments to further grow sales, leverage scale and drive profitability in the future.

Despite the challenges on the pricing and the SG&A front, we generated a 5% increase in adjusted EBITDA to $62.7 million for the quarter, and an adjusted EBITDA margin of 8.2%.

Related to our growth initiatives, I'm very pleased to note that during the quarter, we continue to execute on the expansion of our platform through two new greenfield locations and an acquisition in Austin, Texas.

A second location will be focused on servicing in-town commercial work, expanding our footprint and operational capability in this high growth market.

Also, our greenfield opening in Cambridge, Ontario along with our November acquisition of Rigney Building Supply in Kingston, expands and complements our existing Ontario business and further expands our Canadian scale and market leadership.

Subsequent to the end of the quarter, we also announced the acquisition of Trowel Trades Supply Inc, which represents our entrance into Vermont, thereby increasing our coverage in the U.S. to 44 states and further bolstering our position in the important New England market.

We remain committed to disciplined expansion of our geographic footprint through accretive acquisitions and greenfield openings. We continue to balance this with our debt reduction priorities on which we also made progress. As a result of continued strong free cash flow generation, we reduced our net leverage to 3.3 times as of the end of the quarter.

With that, I'll now turn it over to Scott to provide more perspective on our financial results for Q3.

Scott?.

Thanks JT. We were pleased to deliver strong performance in the quarter, increasing sales, expanding gross margin, growing adjusted EBITDA and generating significant free cash flow. Looking at Slide 4.

We grew net sales 5.2% to $761.4 million, including 3.8% organic growth year-over-year, principally through what we believe to be above market volume growth. Similar to the second quarter, a much greater portion of this growth was generated from volume gains, somewhat tempered by deflationary pricing in certain product lines.

Sales of wallboard were up 5.7% compared to the same period last year, including 4.6% growth on an organic basis, which included an organic volume increase of 7.9%, driven by double-digit volume growth in the U.S., coupled with a 3.3% decline in price and mix, year-over-year.

On a sequential basis, average wallboard pricing declined only marginally from the second quarter. Third quarter ceiling sales increased by 7.2% year-over-year or 4.7% on an organic basis, including 2.8% volume growth with a 1.9% improvement in pricing and mix.

Sales of steel framing increased 1.2% and were flat on an organic basis as strong volume growth of 7.1% was offset by a corresponding decline in price and mix. You'll recall, we reported more pronounced steel pricing and mix deflation of 10.9% year-over-year in the second quarter.

While steel pricing did decline a bit further on a sequential basis from the second to the third quarter, the lower year-over-year price decline in the third quarter was a result of a less difficult comparison in the prior year than was the case for the second quarter.

Sales of other products, which consists of installation, joint compound, tools, stucco, EIFS and various other complementary products, increased 5.6% in the quarter or 4.5% on an organic basis.

In the U.S., net sales of these products were up 7%, offset partially by lower growth in Canada, due principally to lower lumber sales volume in Western Canada as a result of the adverse weather.

Volume growth for all product groups was robust, reflecting not only the solid demand environment, but also our efforts to expand share in our core products and grow our complementary products, two important elements of our strategic priorities.

Gross profit in the third quarter increased over 8% to $253.5 million, gross margin of 33.3% improved 90 basis points from 32.4% a year ago, primarily due to favorable price cost dynamics, principally in wallboard, steel and other products; acquisition related purchasing synergies, mostly from Canada; as well as end market and product mix.

Favorable cost dynamics include benefits from increases in supplier incentives, driven by our higher volume purchases across multiple products, as well as benefits from our focused procurement initiatives.

At the beginning of January, we lapped the year-over-year benefits from the $10 million of annualized purchasing synergies related to the Titan acquisition, which nevertheless provided 20 basis points of benefit in the quarter. Looking ahead, we expect to generate gross margin within a range of 32.5% to 33% for the fourth quarter of fiscal 2020.

This range contemplates an expected higher weighting of residential activity in our end market mix, as well as some uncertainty around the factors that may impact price cost dynamics in the short term. Turning to Slide 5. Adjusted SG&A expense as a percentage of net sales was up 100 basis points to 25.2% compared to 24.2% in the prior year quarter.

Approximately half of this was related to the continued deflation in selling prices in some product categories. The remainder was primarily driven by market and volume driven inflationary cost pressures, particularly in warehouse and delivery wages, as we continue to realize growth across our value-added delivery model in a tight labor market.

These costs were partially offset by productivity gains resulting from our ability to more efficiently deliver the higher incremental volumes. As JT mentioned, we continue to invest in our initiatives to grow sales, leverage scale, and drive profitability.

While the cost associated with these initiatives are included in SG&A, certain benefits for example, those from purchasing initiatives are beginning to be realized in gross margin. In the third quarter, we delivered $62.7 million of adjusted EBITDA, up 5% year-over-year.

Despite some meaningful headwinds in the form of selling price deflation coupled with the aforementioned cost pressures, we were able to maintain an adjusted EBITDA margin of 8.2% consistent with the year-ago level. Based on the assumption of pricing levels in Q4 remain somewhat consistent with those of Q3.

We expect the price related to SG&A deleveraging will continue in the fourth quarter, but will be somewhat less pronounced sequentially. As a result, coupled with our expected range for gross margin in Q4, we currently expect to achieve an incremental adjusted EBITDA margin between 9% and 10% for the full year of fiscal 2020. Turning to Slide 6.

Free cash flow for the first 9 months of fiscal 2020 increased $22.4 million or 24.4% year-over-year.

This improvement is primarily a result of $37.3 million of higher net income after adjustments for noncash items, partially offset by a $7.4 million decrease in cash resulting from changes to net working capital, and $7.5 million of higher capital expenditures.

Looking ahead, we maintain our current estimate for full year fiscal 2020 capital expenditures of $25 million to $30 million. Consistent with our stated capital allocation strategies, we reduced our net debt by $35.7 million during the quarter.

At the end of the quarter, our net leverage was 3.3 times, which is down from 3.5 times at the end of the second quarter of this fiscal year. Balanced with our other stated priorities, we intend to continue to delever through continued positive free cash flow generation.

Our balance sheet as of the end of the third quarter remains healthy with $40.9 million of cash on hand and $424.9 million available under our facilities resulting in substantial liquidity of our total long-term debt, the large majority is not due until 2025. Now let me turn the call back over to JT before we open the line for your questions..

Thanks Scott. Once again, we are pleased with our performance in the third quarter with strong sales volume, gross margin expansion, increased adjusted EBITDA, and higher free cash flow. We continue to expand our market leading position and our balanced product portfolio.

We also believe our diversified exposure across commercial and residential, as well as new and repair and remodel construction markets continues to be an advantage, not only in our pursuit of growth but in managing market cycles.

Our dedicated team throughout North America continues to embrace our strong entrepreneurial culture to earn our customers’ business every day with our complete line of products and expansive geographic network, and by providing exceptional service that is second to none.

With respect to our construction end markets, we presently see a favorable outlook with low interest rates, strong employment, and healthy construction activity. Furthermore, consensus forecast currently suggest growth in both the U.S. and Canadian commercial and residential construction markets for calendar 2020.

Last quarter I shared with you, the four strategic priorities we are pursuing in order to capitalize on the significant growth opportunities in the future. Our results for the third quarter reflect some initial progress on these fronts.

We achieved volume growth in excess of 5% for each of our core product categories of wallboard, ceilings and steel, which we believe is an excess of market growth and reflects market share gains. Growth of other products of 5.6% including 7% in the U.S.

with double-digit growth in important categories including tools, fasteners, and EIFS underscores our efforts to diversify and profitably expand our product offering. We continue to expand our platform through one acquisition and two greenfield openings.

And although in early innings, our profitability initiatives to further leverage our scale and operational excellence best practices across our platform enabled us to expand our gross margin and maintain our adjusted EBITDA margin. There are a lot of exciting things going on at GMS and in our industry.

We are confident that we are well positioned to capitalize on the growth opportunities ahead through execution of these strategies and create long-term value for our shareholders. Operator, we are now ready to open the call for questions..

[Operator Instructions] Our first question comes from the line of Trey Grooms with Stephens Inc. Please proceed with your question..

This is actually Noah Merkousko, on for Trey. So I wanted to ask a couple of questions on sort of the moving pieces that we're benefiting gross margin in the quarter. I think you guys mentioned, product mix was a benefit, but it looks like that mix was unchanged from the year ago period. So maybe kind of help us think about that.

And also, you guys talked about the benefit of higher volume purchasing and how that's impacting price cost.

And just any commentary on how long you expect that tailwind to persist?.

Well, you hit the two points. I mean we bought and sold significant volumes in wallboard and steel, and we received some significant supplier incentives as a result of that, that volume activity. So we feel really good about that actually as part of the objective, obviously of share gain and of growing the business, sell more products earn more money.

So we think that was a pretty good, pretty good result in the quarter. As far as the mix concerns, that's mostly because we still had a very strong commercial quarter, and our commercial product mix is a little stronger when it comes to gross margins.

And so between the steel volume, which is all commercial and between kind of a higher mix in wallboard going out with commercial, we experienced slightly higher than I would say, normal gross margin in our mix..

Yes. So you're absolutely right. If you look at the mix within the product lines, it's consistent, but there is other elements of mix across the business in terms of the types of wallboard mix, the types of markets, et cetera. And that's what we're referring..

All right. That makes sense. And then just on a follow-up. U.S. housing market, it looks really healthy right now and you mentioned signs of stabilization in Canada.

Maybe just give us a little bit more color there and specifically what you're expecting on Canada?.

I don't think that we know specifically yet, and I don't think anybody really does know exactly what they're going to get out of Canada. I think we're - again we use the words encouraged by what we're seeing up there. If there is some price stabilization in lumber as well, it's not a huge issue but we have talked about it in the past.

So that's a good thing for us in Western Canada in particular where we have, we have a bigger lumber business. I think that in general, single-family really had allowed the year last year.

I think the numbers we saw were down 15-plus percent and now most the forecast to come back, maybe be up a few low single digits, and that's encouraging in and out itself. And then multifamily was okay last year, and it looks like it's going to stay, okay this year.

So we're seeing signs that that market is going to not be in decline to anywhere near the same extent.

I wouldn't expect it to be some double-digit type of growth rate as we go into end of this year, but coming off of what we dealt with in calendar '19 and fiscal '20, I think that our optimism is in and around having just basically an okay market to sell into..

Our next question comes from the line of Kevin Hocevar with Northcoast Research. Please proceed with your question..

I'm wondering, in the gross margin outlook, 32.5% to 33% for the fourth quarter; in those comments, you had mentioned that there were some uncertainty baked in there for price cost. I know price cost have been a nice benefit for you these last several quarters.

I'm curious if you could give some color there? Is that really due to the implementation of some price increases and you're still kind of seeing how those are shaking out versus in terms of what you're accepting versus what you're passing along? I'm just curious if you could give some color there on what's driving that uncertainty in price cost and what you're seeing there at this point?.

Thank you. You're getting at exactly what we're referring to there.

Like everybody is well aware that there was a pricing action out in the marketplace and as the market comes to terms with it, we just recognized that there is a little bit of uncertainty out there as it works its way through the system and we just want to recognize that as part of - as a part of our outlook. So, and it keep getting exactly right..

Okay. And then in terms - how would you say demand has progressed here throughout, as you look through the, your fiscal third quarter and we're a month into this fiscal fourth quarter.

So, wondering kind of what you're seeing so far in February?.

February looks a lot like the last quarter. So, we see the conditions being very similar..

Our next question comes from the line of Matthew Bouley with Barclays. Please proceed with your question..

Thank you for taking my questions. I wanted to ask about the market share gains, I guess, just focusing on the wallboard side. So, that double-digit organic wallboard volume in the U.S., it suggests you're well on that path. But then the pricing, I guess, did come down a little more than at least we had expected.

So, can you just discuss how much of this kind of share gain is coming from sort of pricing the market versus the other organic efforts that you guys are making that are really gaining traction? Thank you..

I think with our pricing being basically flat sequentially, I don't really see price being a key driver in the gains. I mean, we continue to do some things. We've invested in service. We've invested in fleet capability.

I believe that our team is fully engaged in getting after every opportunity that's out there, including some additional salespeople that we've added into the market. So, I think it's really mostly a result of what we're doing, leveraging our past service superiority and adding in additional sales people and being committed to service the business.

I think that's really what's been driving the bulk of that wallboard growth. Not having price declining on a sequential basis, I think that - I think that's a good indicator for us..

Got it. That's helpful. And then secondly, I wanted to ask about SG&A. I think, if I heard you correctly, you mentioned about half of the percentage increase in the quarter came from lower selling prices and that that pressure should lessen in Q4. You've got some investments going on and then wage inflation etc.

Can you kind of break out those three buckets on a go-forward basis in a little more detail? Just given the moving pieces around product pricing and the market coming up and market inflation; I guess, at what point might you begin to lever SG&A again? Thank you..

I mean, my view on levering SG&A comes when we get some, not only price stability, but we get - we get a little bit of inflation and pricing, and particularly in steel. It's very expensive to deliver steel, service steel. The cost associated with doing that are all inflating as would be normal. Although, we did have good productivity.

The way we measure our productivity, we had nice productivity based on some of the investments in technology, but also practices that our guys are implementing out there across that. But I think that you'll see us leverage SG&A in the traditional definition of that when we see some inflation in our commodity pricing.

That's the way it will really happen, because I think that our investments are measured. I think they're smart. They're based upon what we view as a near to moderate term future look. So, I don't - we're not investing for 3 and 5 years out, we're investing 12 to 18 months out with salespeople and with new product.

And all of those things cost a little bit of money to get them up off the ground, as well as our greenfields. So, I don't think we'll slow down at this point in time the investment that we're making. Although, I think it's very prudent and moderate.

And then just general inflation, it's in that 3% range and with some wage inflation on the labor side and warehouse and delivery being even a little higher. So, we'll leverage it when we get some inflation in some of these commodity pricing..

In addition to that, I would just add, we have a slightly more favorable comp in the fourth quarter versus the fourth quarter of prior year. So, that will benefit us a little bit as well..

Our next question comes from the line of Mike Dahl with RBC Capital Markets. Please proceed with your question..

My first question just on the wallboard volumes and specifically the double-digit commentary. Obviously, really strong number.

Just wondering if you can give us the split in terms of that organic double-digit in the U.S.? What was residential year-on-year, and what was commercial and what's your estimate of what the market growth was?.

I mean, we - so, we're 200 basis points stronger in volume than would be the Gypsum Association numbers, in general. Our commercial volume was a couple of points higher than our residential volume was. So, we're still seeing very strong commercial activity out there, which of course we're pretty good at. So, that's a good thing.

I would say high single-digit residential growth for us is also very encouraging. We have very strong residential business, but [7%, 8%] was even better than I think anybody would have thought..

Right, okay. That sounds good. And I guess, sticking with the U.S. residential side, one of your other competitors was talking about looking to push more aggressively back into residential after sitting out some of last year. So, as you think about the sustainability of these residential volumes, obviously you've got tailwind from the market.

But can you talk to, can you talk to competitive dynamics whether you've seen anything change with respect to residential or any other color around your expectations for market share growth as we go through the next few quarters?.

While new residential construction is certainly probably the most competitive part of the business that we participate in, and it's no surprise that based upon the forecast going forward, everybody's going to want a piece of the growing pie. Again, it's - it is competitive. It's not an easy business by any stretch of the imagination.

I think we've got a team that understands that. We've got decades of experience in selling into that end market and I think we're pretty good at it. We have wonderful relationships with both the contracting community in residential, but also the builder community in residential.

So, I expect us to be still better than the market, whatever that market may end up being. I think we're going to be able to gain a little bit of share, albeit it will be certainly competitive..

Our next question comes from the line of David Manthey with Baird. Please proceed with your question..

First off, relative to the third quarter organic sales growth of 3.8%, can you give us the comparable organic SG&A growth if you have that?.

SG&A growth relative to prior year Q3?.

Yes, just in the core business on sort of an organic basis that compares to that 3.8% organic growth..

I don't have it on an organic basis, David, off hand. I guess, I would say there's really relatively minor acquisition activity. So, just running the math correctly, I think is a pretty good indication..

Pretty close. Okay. All right. And then in the fourth quarter SG&A last year, I think you had some insurance and other timing of some other costs and things. And if I'm running the guidance correctly, it seems to imply that the fourth quarter, SG&A is only modestly higher than the third quarter, which is pretty - it seems seasonally more normal.

Am I reading that right based on your outlook?.

I think that's about right..

Okay. All right. And then finally….

I think on a percentage term just to be clear..

Yes..

So Q4 versus Q3, are you saying or Q4 year-over-year?.

No, I was comparing SG&A dollars in your Q4 implied from your guidance relative to the 3Q dollars of SG&A..

There will be higher just given the fact of all the sheer volume of the business. It's definitely higher, but on a percentage basis, roughly consistent year-over-year..

Okay, all right. Thank you. And then finally just on the tone of the non-res market.

It seemed like late 2019 many market participants were feeding on the non-res outlook based on whether it was backlogs or labor shortages or what have you, and lately, it seems that that outlook is firmed up, is it fair to say that your outlook today is slightly better than it was 3 or 6 months ago?.

Yes, I think so. And I think that's just reflective of kind of the macro reporting you're seeing on it. We always said that our activity was strong, but you can look at our activity much further out than 6 months or so.

So when you, we were, we were all talking about maybe it moderating into that real low-single digits type growth or maybe even being flat, and it looks like it's going to be a little better than that. So that's where we are..

Our next question comes from the line of Steven Ramsey with Thompson Research Group. Please proceed with your question..

On other products maybe to clarify, you said U.S. sales were up 7% organic, was that correct.

And then on Canada ex-lumber, can you talk to growth in Canada ex-lumber?.

Oh boy, I'm not sure we have in front of us an ex-lumber number for Canada, and I don't think we've ever talked about it. I think that again our other product business in Canada is a little bigger than it is in the U.S. market for a number of fundamental reasons.

We sell residential installation there very, very well, where in the U.S., our residential insulation business is very small. It goes to market differently in the U.S. We also sell roofing in Canada and we have fairly good business, single family roofing in Canada, and of course that's been under stress.

And then most of our lumber business is all West. We - and I don't have it in front of us ex-lumber and the volatility in the pricing that we've seen in lumber, all I can tell you moving forward is, it appears like lumber has stabilized and is going to move back up in price, and that's a good thing for us..

Excellent.

And you know as you think about growing outpacing growth in the other products category, are you pondering, are you looking at adding new products to this mix or pulling products back to improve mix and go-to-market success?.

Yes both, we are looking to focus the organization around the most successful other product categories. One in particular I mentioned is double-digit growth in EIFS. We are good at that in several places. We are not even in that business in many places, so that's an area that we can expand upon as well.

And then we have some product categories that are either not terribly profitable, and or not really core to us even in the other category that will exit.

At the same time, we are looking at expanding into one or two other significant categories, depending on the division and-or the geographic, the exterior envelope is exciting to us, and we're looking at that, and water proofing below and above grade water proofing is also exciting to us and we're not really in either in a meaningful way.

And so those are a couple of categories that we think could be important to the future..

Great. And then, and then one other thing on that, I know that is ongoing nature to mix and shifting and adjusting mix, but on the initiatives, you're talking about some of the bigger longer-term initiatives.

Is that kind of a one-year you know as you play that out to more mature levels or is this more of an ongoing thing and it won't be a significant impact?.

Well, I think we said our other product categories should grow high mid single-digits as it has been which will outpace over time, most likely, the commodity products right or our traditional products of wallboard, steel and ceilings. So I don't expect double-digit wallboard volume every quarter forever. I just don't think that's the market.

I think that we'll continue to do better than the market, whatever that may be, but in other products we have such an opportunity there to expand our distribution at the same time of being better added in so many of the places that we're - that we're just getting started.

That to me is going to be a strategic - a strategic part of our business is really focusing there. And for the most part, strong profitability in those, in that other product category as well..

Our next question comes from the line of Michael Wood with Nomura Instinet. Please proceed with your question..

Very comforting here the favorable outlook, just curious here in light of your bond in equity markets, you correctly or incorrectly maybe beginning to indicate a looming U.S. recession.

Are you hearing of any potential coronavirus-related disruptions to your business, and if we were to slip into a shallow recession, how would GMS tactically react to that?.

Boy, the coronavirus issue, I think we're - we all just going to have to keep our eyes open on that situation and be prudent in our own actions inside of our Company to take care of our people, take care of our customers, and do things that are smart to keep everybody that we can safe.

In general listen to the people that know what the hell they're talking about when it comes to this issue. I don't know what it's going to mean to us. Our supply chain is not - an international supply chain for the most part, so from just the business perspective today, we're a U.S.

based supply chain for the most part, or North American base supply chain for the most part. So any coronavirus impact to us will most likely be on the demand side and down the road, whenever that happens and we won't - it won't be on the supply side.

As far as any recessionary situations go, pull back on things that don't have immediate, immediate returns for the most part will generate cash out of our inventory. As we go forward, we will probably slow down some of the investments that we're - that we're making that have like I mentioned, have longer term returns to them.

It was a mild recession and we'll manage through, through our cost structure and move trucks around, roll off fleet expense all those kind of things, you would normally do..

Just we took it - working capital leverage in a downturn as well. So from a cash flow standpoint, it's - there is a bit of an offset there..

Okay, great. And also, are you able to give us any color on the impact of weather in Canada, on that 2% organic sales decline.

And did you see that demand, it was pushed out to begin to come back and benefit you post quarter?.

So yes, the Western Canada, I was just there. And it appears like that market is - literally last week, it appears like that market has recovered and is going to have a decent year, this year and all of that weather impact should have pushed out into the next couple of quarters.

But it was fairly severe on Vancouver Island in particular where 90% of our Western Canada business, as they had significant snowfall over a 2-week period of time. And that's very unusual for Vancouver Island. And so we were really kind of shut in for an extended period..

Thank you. We have reached the end of our question-and-answer session. I would like to turn the call back over to Leslie Kratcoski, for any closing remarks..

Thanks everyone for joining us today. A replay of this call will be available on gms.com shortly. And as always, we appreciate your interest in the company. Good day..

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day..