UFP Industries Inc (UFPI) 2006 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q1 2006 Universal Forest Products earnings conference call. My name is Latasha, and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (OPERATOR INSTRUCTIONS).

I would now like to turn the call over to Ms. Lynn Afendoulis, Director of Corporate Communications. Ma'am, please proceed.

Good morning, and welcome to Universal Forest Products' first-quarter 2006 conference call. I am Lynn Afendoulis, Director of Corporate Communications for Universal.

On the call today are William G. Currie, Vice Chairman and CEO, and Michael Cole, CFO, who will conduct the call, and President and COO Michael Declan who is available for the question-and-answer period.

Before we turn the call over to Bill Currie, please be aware that included in this report are certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. Such forward-looking statements are based on the beliefs of the Company's management, as well as on assumptions made by and information currently available to the Company at the time such statements were made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. These risk factors and additional information are included in the Company's report on Form 10-K and 10-Q on file with the Securities and Exchange Commission.

This call is the property of Universal Forest Products. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Universal is strictly prohibited.

Universal Forest Products is grateful you took the time to join us on this call and for your interest in the Company. If at the end of the call you have questions, we ask that you identify yourself by name and by the Company you represent, or if you are an individual investor, to indicate that as well.

At this time, I would like to turn the call over to Bill Curry.

Thank you, Lynn, and good morning, everyone, and thanks for taking time out of your busy day to hear our good news. I think last quarter's Batman comment got as much attention as our earnings. And this quarter, I felt like I was in the movie "Good Will Hunting," and Matt Damon's standing at the front of the restaurant looking into the window at the preppy Harvard guy with Skylar's phone number, saying, "Do you like apples? How do you like them apples?" That's kind of how the quarter felt for us. It was just fantastic.

It was very powerful on all segments. We increased our sales by over 24%. And we increased our earnings by 72%. There's nothing magic to the performance though, and it probably could have been better. But there is a lot of strategy, hard work, and determination in everything we do. And it continues to work for us and for our shareholders. We are focused on our strong business model. We strive to exceed customer expectations at every turn. And every day, we are driving out unnecessary costs and doing things better than we did the day before.

One of the remarkable things about this Company is that, as big as we have gotten, we can collectively embrace a goal or concept and run with it and communicate, even when we are in more than 100 locations and have more than 9,500 people. I attribute that to a management team that can't be beat, and solid leaders like our President and COO, Mike Glenn, our divisional presidents Scotty Green and Bobby Hill, and the vice presidents, general managers of operations, and the others that lead the charge. Mike has driven an innovation program that became a part of who we are and how we work in less than a year. And it's already saving us millions and millions of dollars.

Before I talk about our business segments and our outlook, I'll turn the call over to Mike Cole to discuss the financial results for the quarter. Mike?

Thanks, Bill, and good morning, everyone. I will start by reviewing our income statement for the quarter. As you noticed in the press release, our total sales increased 24%, primarily due to organic unit sales growth.

By market, our sales to the DIY market increased 20% as a result of a 4% increase in selling prices due to the southern yellow pine market, a 3% increase in unit sales due to acquisitions, and a 13% increase in unit sales out of existing plants. Acquisitions sales growth resulted from our investment in Maine Ornamental and DecKorators last year, and our organic growth was driven by increased shipments to our big box customers. Our sales to the manufactured housing market increased 10% for the quarter, even though a decline in lumber prices caused our selling prices to drop by 4%. Within this market, our sales to producers of HUD code homes increased 3% over last year, in line with industry growth, and our sales to modular home producers increased 18% over last year, driving our overall increase in the market.

Our sales to the site book construction market increased 39% for the quarter, primarily due to our acquisition of Shepardville Construction last year and 33% organic growth driven by our component plants in Southern California, Texas, Colorado, and our Atlantic region, and our framing operations in the Northeast and Las Vegas.

Finally, our sales for the industrial market were up 22% for the quarter, spread over several regions. This continues to consist of very profitable organic growth.

Moving down the income statement, our gross profit percentage increased to 14.2% this year from 12.5% last year due to a number of factors, including a higher ratio of value-added product sales, economies of scale associated with strong unit sales volumes, and cost reductions achieved through Mike Glenn's innovations initiative.

Selling, general, and administrative expenses increased 29% for the quarter, exceeding our 23% unit sales increase, primarily due to accrued bonuses which are driven by operating profit growth and return on investments.

Our effective tax rate was almost 37% for the quarter, compared to about 38% last year, primarily due to a permanent tax difference resulting from improved profitability of certain non-wholly owned partnerships.

Moving onto our cash flow statement, our cash flow from operations increased by $61 million compared to last year. This was accomplished through improved profitability and better working capital management in 2006. Specifically, we reduced our average collection period with customers by almost two days, reduced our days supply of inventory by almost 7 days, and increased our payables cycle by a day. Our capital expenditures totaled almost $8 million for the quarter. And we're still planning for a total spend of approximately 50 million for the year.

Business acquisitions consist of amounts paid for the assets of Classic Truss Company located in Fort Pierce Florida.

A few points I'd like to make about the balance sheet. First, our total interest-bearing debt at the end of March decreased to $204 million versus $274 million last year, primarily due to an increase in amounts sold and outstanding under our sales receivables program in 2006, and the improvements in working capital I mentioned earlier. Included in that was $48 million on our five-year revolving credit facility, which has a total availability of 212 million after considering amounts reserved for letters of credit. And finally, our leverage ratio decreased to 31% from 43% a year ago, which is below our desired target as we continue to evaluate acquisition opportunities.

That concludes my comments on the financial statements. Bill?

Thanks a lot, Mike. You know, at the end of last year, we talked about expanded opportunities with our big box customers, and that we were going to get aggressive, as well as some new opportunities with independent dealers. I'm happy to report we increased substantially our business with our big box customers by adding new markets and products, and by growing our existing business with them. We also picked up many new independent dealers.

We picked up market share and added popular new products to our product line, giving us a total outdoor environment including our Maine Ornamental post caps, DecKorator balusters, and our eon decking. As a matter of fact, in the February 27 issue of Home Improvement Executive, they ran the results of a survey they took, a national survey. They asked retailers nationwide which brands they perceived as driving their business in the spring. In a decorative baluster category, 68% named DecKorators as their business driver, which is part of the Universal family. And in post caps, 91% answered that Maine Ornamental products drive their business, and would do so this spring. Maine Ornamental is also part of the Universal family. These new products and others have been become part of our Consumer Products division, which hit the ground running, and is helping us bring new products to market and develop new channels of distribution for current and new products.

Under our site-built performance, sales were up 39% as Mike said, and a number of our regions were strong, and we saw growth in our framing operations in a continued strong housing market. In some areas, like Houston, we continue to convert builders to our engineered wood components from stick built. As a matter of fact, our Houston plant is now at capacity, and we have to look at additional capacity to serve that market.

We have also added more loose lumber packages of our sales of components as we strive to provide turnkey solutions to our customers. And we continue to grow with our national builder customers who want national suppliers to fill their needs, and who want rebates based on national business.

In the industrial, it's the same-old same-old. We continued our double-digit growth in this market because the opportunity is huge, the market is fragmented, and because we bring expertise and resources that others can't. As I said last quarter, we added 1,000 new customers in 2005 alone. And we're continuing at that same pace in 2006. With all of our strengths and with the sales and production teams we have in place, we get virtually every order we go after. I just don't see a lot of slowdown in this business.

In manufactured housing, which is the backbone of Universal's startup, we have a good, commanding market share thanks to long and successful relationships in this market, and to some proprietary products that help manufacturers build better and more customized homes. Growth in our sales to modular home manufacturers is more significant, as many manufacturers switch their focus to modular housing. We saw strong growth in the quarter in both Pennsylvania and Colorado, primarily due to the reason that these are basement markets, and the growing modular market is expanding rapidly in those regions.

Summary -- it was another great quarter for Universal. Our markets are strong. We remain true to our business model. We improved our margins by focusing on costs, and by achieving economies of scale by growing our businesses because we know our customers continually expect price reductions. Our innovation program instituted last year by our President Mike Glenn has had a significant impact on improving what we do and on our bottom line. And as I told you, it's already saving us millions and millions of dollars a year. And our people worked hard and delivered -- they executed.

That is the story on Universal. We appreciate your interest in us, and we appreciate your holding our shares and being stakeholders in our Company. I thank you for the time that you put forth today. And now, I'll open it up for some questions.

(OPERATOR INSTRUCTIONS) Steve Chercover.

Those are some fine apples you delivered. (multiple speakers) I guess my first question is with respect to do-it-yourself. It was flat for the first three quarters of last year, and then we see this tremendous performance in Q1 of this year. Is that kind of growth sustainable throughout the year, like on a quarter-over-quarter basis?

Yes; most of that business is written on yearly contracts. And so we expect to have a good growth in our DIY markets this year.

And similarly, the site-built was -- it seems like it's accelerating, although there hasn't been much in the way of transactions. So I guess a two-part question -- is that type of growth sustainable? And I was also under the impression that you had some things in the pipeline. Are we going to see some deals in the near future?

We have quite a few things in the pipeline. We're getting close on some. I think you can expect to see some in the near future.

And the organic growth is also sustainable?

We're going to have to add some capacity in some markets, Steve. But we still think that we'll have good organic growth this year on our site-built.

Okay, maybe one more, and then I'll turn it over to get back in queue. It seems like your SG&A is always kind of top-heavy in the first quarter and then trends down. Is that something that we should expect to continue? Is there something structural due to that, or there's kind of fixed costs, and since Q1 is seasonally slower, the percentage seems higher?

You have got it exactly right. It's the seasonality, Steve. So it should trend down as a percent of sales as the year moves on.

Greg Halter.

Greg Halter from the Great Lakes Review here in Cleveland. Congratulations on the very good results.

I wondered if you could comment on commodity costs other than lumber, such as metal and resins and so forth. And I know it's not a big component, but I would appreciate your comments there.

You know, if you take a look at the biggest move in the commodity markets, and it was a downward move, it was in the OSB and the panel market. We have been able to maintain our resin costs. And due to the volumes of galvanized steel and steel that we use, we've been able to maintain a competitive edge in the marketplace there too. So that has not been a big issue for us.

Okay, great. And you briefly mentioned the value add piece. Do you have what that was as a percentage of sales for the quarter?

Yes, last year it was 53%. It moved up to 57% this year.

Great. And additionally -- I don't know if you break out your profit by segment. And I don't think you do. But could you give us some idea of which segments may be better than the others?

We don't do reporting by segment, Greg. We have one segment for the Company. So we don't break out profitability by each market.

I thought I would try.

Okay.

I know Home Depot was a 22% customer in 2005. Are they still your largest customer? And if so, where does that percentage stand?

Yes, they are our largest customer. And last year, they were 18.5% of sales for the first quarter. And this year, they are at 17.5%.

Okay. And are there any major new customers you can elaborate on in the quarter?

There are a lot of them. One of the big helpers for us toward the end of last year in manufactured housing has been Clayton Homes. We have been building a very powerful relationship with them, and our business continues to get stronger. That has been a nice one.

On the industrial side, we picked up the [Husqvera] account (ph), where we are producing all the packaging for Husqvera products and that has turned out to be a really nice addition for us.

Yes, and Depot was up 18 million for the quarter. So that was also a nice increase. Even though the percentage of our total sales was down, our percentage of business with them was up $18 million.

Okay. And Mike, just a housekeeping issue -- do you have the figure for accounts payable for the quarter?

Yes, I do. Hold on one second -- accounts payable was $131 million.

Cliff Walsh, Sidoti & Co.

Can you guys comment maybe on some of the new products in terms of how they stack up on a margin basis? Is there any reason to think that they're a little bit higher margin, and we should continue to see kind of this margin improvement that has been taking place?

You know, I think in all honesty, the product mix is helping the operating margin. But you also have to really take a good look at the costs we're driving out of the business. That's also really adding to our operating margin.

So you know, the volumes on those real specialty-type products are not there. They're much smaller volume, and they're more intricate. They're tougher to deliver. There's higher costs associated. So yes, the margins are probably a little better on those. But we kind of look at it as an overall margin on the environments that we are selling into.

And longer-term, as you continue to grow and make operational improvements, do you have a target gross margin you think you can get to?

No, I wouldn't want to put anything on that.

Okay. And you guys haven't -- any sense as to when you will put out your next five-year plan?

Yes, we'll put it out after our summer ops meeting, which is our July ops meeting, and we'll be coming out with our new program. I don't know if it will be five or not. I can't promise you that (multiple speakers) we'll be coming out with our new program --

Your new long-term plan. Okay. And it seems like in terms of the new homebuilding market, a lot of homebuilders have been reporting kind of weaker order rates. Are any of your site-built guys seeing that or hearing anything towards the second half of this year? Any comments on that would be appreciated.

We have not experienced it yet. Our backlogs are pretty good. We're getting a little more aggressive. The toughest market right now, and has been for awhile, is the Midwest, where the big three and the laying off of a lot of the UAW folks and those things have made it pretty difficult in the Midwest. That's the toughest housing market that we are experiencing.

Okay. Anything performing -- kind of outperforming on the upside in terms of regions?

The Atlantic region is very powerful. The Florida region continues to stay strong. The Texas region is staying pretty strong. And the Northeast is always a nice, mature, steady, good market. So those markets are good. And again, the West Coast, even though it's slowing a little bit, is still a massive market. So all we have to do is get better at what we do and pick up some market share.

David Lebowitz, Burnham.

Very briefly, what would you consider the biggest challenge the Company is facing right now?

It's the same one we have always had, is to continue to find and train and get the Universal culture continuing to go on down the line with new employees and new managers and keep the same kind of thought process that we have of working hard and playing hard and delivering results and exceeding customer expectations and doing things the right way with a lot of integrity. And that is what we spend a lot of time on -- continuing to develop people for the future of the Company.

Also in terms of new product categories, are there any that we are likely to see either internally developed or acquired in the next 12 months?

The one that just comes to my mind is we started into the plastic lattice business -- decorative lattice business last year. And we're starting to grow that business. And we're looking at some more opportunities in that area.

And lastly, you had given up some of your distributor businesses in regions of the country where you did not have adequate critical mass. Is there any thought to building up that critical mass, or is this just something that in the future you will continue to turn your back on?

No, the Consumer Products division was -- one of the reasons that we started that division is that we realized that in some markets, and in some customer categories, we were missing some pretty good business. And Mike's group, Dan Gauthier and the whole Consumer Products division is really reaching out into some of these fringe areas that we were never able to touch, and actually doing some pretty good business there.

And the last question, if I may. The increase in your guidance for earnings for this year -- how much of that was predicated on the first quarter's results, and how much of that is predicated on other favorable conditions you anticipate going forward?

You know, I think the first quarter was very good. Let's face it; we had good weather in all the regions, and we had really good operating results, and a lot of the innovations came into play. And we had very good results. We still expect very good results for the rest of the year, but I wouldn't expect 72% increases in earnings. I think it will be more in line with where we traditionally are for those quarters.

But we do anticipate, based on the forecast for the balance of the year that each of the succeeding three quarters will be up EPS-wise?

We haven't broken anything down by quarter, David. But for the year -- 15 to 20.

[Jason Loeb], Lord Abbett.

Great quarter. I wanted to get a little more color -- dig a little deeper in the do-it-yourself area. You commented that Home Depot in particular was up 18 million for the quarter. And pretty much over the past couple of quarters, that area especially on the decking side has been very soft as it relates to higher pricing. Can you just tell me what has changed in that market? Have prices come down substantially? You mentioned something about yearly contracts. And I'm just trying to triangulate that into the performance.

Well, the lumber market in southern yellow pine in those areas really isn't down. It's about stable with last year, maybe a couple percentage points higher. We were aggressive on our pricing when we went out on these new contracts. And we have driven some costs out of our treating costs. So I expect the Home Depot sales to stay strong for the year. And I really don't see any problem with it.

And can you talk about the composite area for the do-it-yourself -- how that is trending as it relates to kind of the competitive environment, and as it relates to your own costs -- raw material costs in plastics?

Well, I think you have to again take a look at our strategy on that, which is to sell the whole outdoor environment. And we have available for our customers every kind of wood decking, whether it be pressure-treated, standard, or premium -- cedar decking, redwood decking. And then we have our composite product, which to the independents is Latitudes. And then we make the Home Depot product called Veranda. And then also all of those things that make a special environment -- the copper post caps, the solar lift products, the decorative balusters -- if you want a real highline polystyrene product, the eon decking. We just have a lot of bullets in our gun that allows us to give the customer a total choice on exactly how he wants his deck to look. And we think that that is adding a lot of value to our program.

Has that pricing -- as it relates to wood decking, has that premium changed at all?

No. As a matter of fact, I think we've probably gotten more competitive in those areas.

Okay. Well, keep up the good work.

Steven Chercover, D.A. Davidson.

I'm back. A question I guess for Mike Glenn, or Bill can certainly opine. The innovation program -- how advanced is that? And is it going to be tougher once anniversaried to get these savings out of the system, or is that kind of something that is ongoing?

Steve, it's an ongoing process. What really makes an innovation program work is that each week, we sit down and we talk with two of our plants. And they're not always focusing on ideas that are going to save us $1 million in a plant. But the ideas they come up with and the savings they have are then shared with the other 90 plants in the Company that turn out to be huge numbers. But every week, I'm amazed at the amount of ideas and innovations that our people are coming up with.

And these are coming right from the rank-and-file?

Yes, sir.

So you really can cross-pollinate, then -- that's good. And then you seemed not too long ago pretty excited about an interlocking decking product, I believe, that's not in all of your do-it-yourself markets. How is that product coming along? And are the guys who don't have it clamoring to get the products going forwards?

I'm assuming, Steve, you're talking about the Keystone product. And we have signed up an exclusive with some people on it. It is sold out.

And how long is the exclusive in place? If it's sold out, that must mean that it's going right according to plan.

Well, when I say it's sold out, I guess what I should say is that they have committed to probably the majority of our production this year. And it's just a matter of whether we get the sale through on it.

Great. One last question -- are there any markets that you are not currently in that seem attractive? If you're looking for places to grow, I would think that northern Alberta has got a housing crisis. Could you help them out there?

We're not in northern Alberta. But if someone is interested, we probably would talk with them.

Well, there is $100 billion worth of infrastructure going in. They need people to move up there too. So it seems like housing -- that's an opportunity.

Well, thanks for that -- we will take a look at it.

Bob Fetch, Lord Abbett.

Good morning, gentlemen. In regards to the site-built business here, you talked about a specific market in Texas. But what geographies aren't you covering where you've got existing customers, where they're attempting to pull business forward from you?

Well, we're not very large in the Phoenix or Tucson markets. We could use some more capacity in Houston. We could use some more capacity in northern California. We're not in the greater Northwest. We haven't opened in Salt Lake City. We could use some more capacity in Florida. You know, there's a lot of opportunity for us. We have got a long way to go yet.

And in those regions, you could largely do business with some of your customers (multiple speakers) that you currently have in other geographies, correct?

Absolutely. Yes, and we haven't entered the Gulf Coast yet, either. And that's also something we're looking at.

Can you talk about where you do have business with some of these site-builts -- how many of your products that you might be providing them, and is it also a situation where your penetration of them also has room?

Well, our penetration has room everywhere. The primary products that we supply -- and it's a mixture, okay? It's different in each market. But roof trusses, which are all designed and value engineered to their models and to the options they have on them; wall panelization, where we can panelize the entire home and color-code it to the print so that less skilled labor can actually frame a home; engineered floor systems -- and you can look at any of them, whether you want a truss-joist I-joist system, or you want an LP system, or you want our own Open Joist product, or you want a Web floor truss, we have all of those options and all those capabilities in all the markets.

And then in a lot of markets, where they also want us to supply the loose lumber, we're doing that. And then in quite a few markets now, if they want the entire thing turnkeyed where we actually frame it and dry it in, we can also do that.

So we just need an open discussion with our customer to decide what his needs are and what his expectations are, and then we will custom design our program to exceed his expectations.

And on those designs, are they being kind of co-engineered, in a sense, as they design them for an architectural print -- are you receiving them at the same time? Or how is that working? Or do they just assume that you can build to almost any design?

Well, we can build to any design. I think the unique thing that we offer on the design side is that we really stepped up -- a lot of the SG&A you see in increases is that we're finding our major customers need rapid answers, need rapid designs, and need value-engineered design. And we have done some pretty unique things in that, opening design centers in many markets.

And then one of the really unique things that we have done is using our -- we brought a bunch of engineers from India over. And we trained them in our tech plants to understand species, grade, nail-holding power. And then on a conjunctive basis for about six months, when we closed down at the end of the day, we electronically transferred our prints to India, and we had our design group over there do the same work, to make sure they knew exactly what they were doing -- they were designing to the right codes, that they understood the species and nail-holding powers. And now we have them almost at 100% rate.

So when we close off our design centers at night, we will electronically transfer all the work that needs to be done over to India to have them design. We'll get them back in the morning, and we'll be much faster in answering our customers' needs and in getting them high-quality, value-engineered design work.

And are these your employees?

Yes.

And how many engineers might you have over there?

It's a group -- I think there is about 30 or 35.

And will you need to keep adding to that group?

We will probably have to keep adding.

Okay. In regards to your overall sales mix, clearly, you had good growth across the board. Site-built actually picked up about 4 percentage points relative to total sales mix. If you looked out three to five years, compared to how sales might have broken down this period, what do you think we would be looking at in terms of the change that might take place, which would reflect the -- would you say, relative growth or potential of the various classifications?

I think you have to look to us to stay pretty close to our strategy, and our strategy is very well defined in keeping the balance between those four markets, because we're putting pressure on industrial and site-built right now. The manufactured housing industry is finite. There's still growth there as the market grows. But we do have a large marketshare there. And the site-built business -- you know, as large as we are, we're still only a couple of percent. So I think you can probably see continued growth there.

Okay. And can you specifically for us help us out in terms of -- talk generally about the innovations that you have been implementing across some of your facilities. Can you identify a process or a procedure that has been implemented, as you mentioned, over the last 12, 18 months that is contributing to these millions of savings?

Well, Steve, some of them are very proprietary. And for competitive reasons, we will not disclose them. But maybe Mike Glenn could give you a couple of ones that are working that make a lot of sense.

You know, one of the issues we have in our plants is the carts that we have when we move products around and it takes up a lot of floor space. It takes up a lot of people to move them around. One of our guys redesigned a cart, and it's called the Z-cart. And it takes up about half the space in the plant. So now we're able to have fewer carts and fewer people pushing things around. That is just one small idea that we came up with.

Another one was -- one of our industrial ideas, without getting too deep into it, is -- it's called a [Versajig]. And it allowed us to complete a process for our industrial products that really eliminated five to seven people in the process, and also allowed us to complete the process in about a third of the time.

Okay, that's great. And then my last question is just to again address the industrial market. You basically said -- you can pretty much get any business you go marketing for. Can you talk about -- either in that division, as well as the others, the number of salespeople that you will be adding, and how productive or what kind of sales they generate per employee, and some of the principal applications you are addressing there in industrial?

We really can't give you an answer on that would make any sense to you or us. But what we can tell you is that our emphasis now is on developing our industrial specialists, which are guys that have good engineering and CAD backgrounds, can still stand up and talk to people and understand our production process so that when we look at a new product, we can get a very -- some really good opinions on how it should be built, what it should be built with, and how we should cost it.

How many salespeople do you have in industrial right now?

Probably over 100.

And that's up from what a year ago?

Probably 25%.

Okay, and looking for similar growth in the force this year?

Yes, we are.

Thank you very much, and continue good work.

Mike Peasley, [Priority Capital].

You talked about your framing services just a moment ago. Could you elaborate on which markets that you currently offer those services? And then is that something that you would want to expand, and would you do that through the acquisition?

We are definitely looking at that via acquisition. You have to be quite careful in that business, because no matter what you pay, you're just buying goodwill. There's very few assets in that business. It's mostly a labor force and some proprietary estimating products.

We have a large operation in the Northeast that is doing both exterior framing and interior framing, which means the molding, the millwork and all that kind of stuff. In most of our markets, we are either -- when a customer wants a turnkey project, we are either going in in conjunction with a framer, where we run the project, we bond it if we have to, and we bring framers in for the job. Or in cases like Las Vegas, where we're doing cement and we are doing exterior framing -- in Southern California, we're doing some big government jobs that are bonded jobs for the military. And in Colorado we're doing single-family framing, as well as Las Vegas. And in Texas, we have a startup framing operation there where we're actually framing in some single-family homes for some of our national customers.

So are you acting as the GC in any sense, this is where you're going out and you're finding the third-party contractor itself, or the labor anyway?

No, the GC is usually over the entire project -- plumbing, lighting, asphalt, flat work, and all that kind of stuff. We're really just taking that framing piece of the business.

Okay, well, just -- you mentioned concrete earlier. These aren't businesses that you own, though, are they?

Yes.

I didn't know that. That's good to know. Thanks for your time.

Mr. Currie, I show no more questions in the queue.

Okay, then -- we'd like to thank everyone again for the great questions and the good dialogue, and we really appreciate your support and we will work our butts off to make sure that we give you a good return on your shares. Thanks a lot.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.