WEBVTT 00:00:00.000 --> 00:00:02.759 Welcome back to the Deep Dive. Today we are tearing 00:00:02.759 --> 00:00:06.120 open a stack of sources to analyze a company 00:00:06.120 --> 00:00:08.500 that, I mean, it forms the literal foundation 00:00:08.500 --> 00:00:11.779 of the American economy. Right. And yet it remains 00:00:11.779 --> 00:00:14.679 largely invisible to the average person. If I 00:00:14.679 --> 00:00:16.760 asked you to name the biggest construction supply 00:00:16.760 --> 00:00:20.820 company in the U .S., you might guess a big box 00:00:20.820 --> 00:00:23.179 store, right? You'd probably say Home Depot or 00:00:23.179 --> 00:00:25.339 something. But you'd be wrong. And that's where 00:00:25.339 --> 00:00:27.600 we're going today. We are pulling back the curtain 00:00:27.600 --> 00:00:31.519 on builder's first source. Ink ticker is BLDR, 00:00:31.800 --> 00:00:34.039 a true behemoth of the U .S. residential construction 00:00:34.039 --> 00:00:37.880 and remodeling sector. Yeah. This deep dive is 00:00:37.880 --> 00:00:40.240 tailor made for you if you're curious about how 00:00:40.240 --> 00:00:43.039 these seemingly traditional industries consolidate 00:00:43.039 --> 00:00:46.600 and, you know, how sheer scale when it's executed 00:00:46.600 --> 00:00:49.020 through a really clever corporate strategy just 00:00:49.020 --> 00:00:51.560 translates into unstoppable market power. OK, 00:00:51.640 --> 00:00:53.299 let's unpack this. We've got a deep. Detailed 00:00:53.299 --> 00:00:55.479 corporate profile here. And the immediate takeaway 00:00:55.479 --> 00:00:57.619 for me is that this is not some small specialized 00:00:57.619 --> 00:01:00.280 firm. Not at all. This is a massive dominant 00:01:00.280 --> 00:01:04.560 player. So to set the stage, Builders First Source 00:01:04.560 --> 00:01:07.700 is a Fortune 500 company. It's publicly traded 00:01:07.700 --> 00:01:10.019 on the NYSE. And this is important. It's an S 00:01:10.019 --> 00:01:12.420 &P 500 component. Which means it's one of the 00:01:12.420 --> 00:01:15.299 largest and most influential companies in the 00:01:15.299 --> 00:01:17.620 entire American stock market. It's a big deal. 00:01:17.739 --> 00:01:21.730 It is. So our mission today. It goes beyond just 00:01:21.730 --> 00:01:23.950 listing off their products. I mean, anyone can 00:01:23.950 --> 00:01:26.069 sell lumber. We're diving into the source material 00:01:26.069 --> 00:01:29.950 to understand the architecture of their growth. 00:01:30.049 --> 00:01:32.609 How they built it. Exactly. Specifically, how 00:01:32.609 --> 00:01:35.129 they built this gigantic business in a really 00:01:35.129 --> 00:01:37.409 relatively short amount of time. The story of 00:01:37.409 --> 00:01:40.010 Builders First Source is, well, it's a master 00:01:40.010 --> 00:01:43.049 class in aggressive strategic mergers and acquisitions. 00:01:43.049 --> 00:01:44.609 And then what comes after. And then what comes 00:01:44.609 --> 00:01:46.469 after. Yeah. Followed by equally aggressive, 00:01:46.629 --> 00:01:49.250 highly confident capital management. So the core 00:01:49.250 --> 00:01:51.150 fact. are working with, the one that defines 00:01:51.150 --> 00:01:53.170 everything else is right here in the source material. 00:01:53.489 --> 00:01:56.290 It says builders first source is the largest 00:01:56.290 --> 00:01:59.129 supplier of building products, prefabricated 00:01:59.129 --> 00:02:02.109 components and value added services in the entire 00:02:02.109 --> 00:02:05.209 U .S. And that's the key phrase. We need to dissect 00:02:05.209 --> 00:02:08.050 exactly what that means and how they turn that 00:02:08.050 --> 00:02:11.509 status into, well, financial dominance. Absolutely. 00:02:11.650 --> 00:02:13.710 When you see a company achieve that level of 00:02:13.710 --> 00:02:16.409 leadership in a sector that historically has 00:02:16.409 --> 00:02:20.409 been so hyperlocal. and fragmented. You know, 00:02:20.409 --> 00:02:22.969 think of the neighborhood lumberyard. Right. 00:02:23.090 --> 00:02:25.210 Every town had one. Every town had one. So, you 00:02:25.210 --> 00:02:26.650 know, there's a fascinating corporate narrative 00:02:26.650 --> 00:02:29.110 driving this. This consolidation wasn't an accident. 00:02:29.250 --> 00:02:32.050 It was completely orchestrated. So let's start 00:02:32.050 --> 00:02:33.849 with the basics then, the core foundation of 00:02:33.849 --> 00:02:36.909 this entity. For a company that operates on this, 00:02:37.030 --> 00:02:39.930 you know, industrial giant scale, its history 00:02:39.930 --> 00:02:42.759 is surprisingly young. That's what's so fascinating 00:02:42.759 --> 00:02:45.460 here. It's the speed of their ascent. The sources 00:02:45.460 --> 00:02:47.919 say Builder's first source was incorporated in 00:02:47.919 --> 00:02:52.080 March 1998. 1998. Yeah. That means, as of the 00:02:52.080 --> 00:02:54.500 context of the sources we are analyzing, the 00:02:54.500 --> 00:02:57.530 company is only about 27 years old. That's nothing. 00:02:57.750 --> 00:03:00.090 It's nothing. You compare that lifespan to some 00:03:00.090 --> 00:03:02.889 legacy industrial names and the velocity of their 00:03:02.889 --> 00:03:05.990 growth to S &P 500 status becomes truly remarkable. 00:03:06.189 --> 00:03:09.009 It just suggests they either found an incredibly 00:03:09.009 --> 00:03:12.189 opportune moment for market entry or, and this 00:03:12.189 --> 00:03:15.490 feels more likely, they just executed a near 00:03:15.490 --> 00:03:17.770 perfect consolidation strategy right out of the 00:03:17.770 --> 00:03:20.580 gate. I think it's the latter. And their operational 00:03:20.580 --> 00:03:22.639 hub is, of course, strategically located. They're 00:03:22.639 --> 00:03:24.860 headquartered in Irving, Texas. A major logistics 00:03:24.860 --> 00:03:28.020 center. Exactly. Texas is a huge market for residential 00:03:28.020 --> 00:03:31.000 construction, obviously. But Irving also provides 00:03:31.000 --> 00:03:34.020 that central location for managing a nation spanning 00:03:34.020 --> 00:03:37.400 operation. It does. But we have to clarify their 00:03:37.400 --> 00:03:40.419 core identity here. Because when people hear 00:03:40.419 --> 00:03:43.479 building materials supplier, their mind usually 00:03:43.479 --> 00:03:46.639 goes to retail. Like we said, Home Depot, Lowe's. 00:03:46.759 --> 00:03:49.199 Think of those places where you can buy a single 00:03:49.199 --> 00:03:51.400 drill or, you know, a few sheets of drywall. 00:03:52.039 --> 00:03:54.479 BLDR is operating in a fundamentally different 00:03:54.479 --> 00:03:56.280 sphere. Totally different. The source material 00:03:56.280 --> 00:03:58.379 is very clear. They're operating purely on the 00:03:58.379 --> 00:04:00.400 B2B side, business to business. They aren't serving 00:04:00.400 --> 00:04:03.039 the DIY market. But the more crucial distinction 00:04:03.039 --> 00:04:06.099 is their dual role. Correct. They're defined 00:04:06.099 --> 00:04:09.280 as both a manufacturer and a supplier of building 00:04:09.280 --> 00:04:12.280 materials. And look, this is not a subtle distinction. 00:04:12.460 --> 00:04:15.439 It's the absolute core of their strategy and 00:04:15.439 --> 00:04:17.379 their profitability. Explain that difference. 00:04:17.600 --> 00:04:20.959 Well, a peer supplier simply buys bulk items, 00:04:21.240 --> 00:04:24.959 lumber, shingles, windows, and then resells them 00:04:24.959 --> 00:04:28.519 at a markup. A manufacturer, which BLDR also 00:04:28.519 --> 00:04:31.319 is, takes raw materials and converts them into 00:04:31.319 --> 00:04:33.819 specialized, high -value components. And that 00:04:33.819 --> 00:04:36.139 dual role, that's where they create their competitive 00:04:36.139 --> 00:04:39.019 moat. They aren't just distributing 2x4s, they're 00:04:39.019 --> 00:04:40.860 actually controlling a key part of the construction 00:04:40.860 --> 00:04:43.399 timeline and the process. And if we look specifically 00:04:43.399 --> 00:04:45.860 at their offerings, the source highlights building 00:04:45.860 --> 00:04:48.480 products, prefabricated components, and these 00:04:48.480 --> 00:04:50.939 crucial value -added services. So let's drill 00:04:50.939 --> 00:04:52.939 down on that. What does prefabricated components 00:04:52.939 --> 00:04:55.779 actually mean for a builder on the ground? Okay, 00:04:55.819 --> 00:04:58.120 so think of roof trusses, which are the triangular 00:04:58.120 --> 00:05:00.740 support structures for a roof. Historically, 00:05:00.740 --> 00:05:02.420 those were often built piece by piece on the 00:05:02.420 --> 00:05:04.720 job site by carpenters. Right, which takes a 00:05:04.720 --> 00:05:07.680 ton of time. It requires highly skilled labor, 00:05:07.839 --> 00:05:11.060 sometimes in terrible weather, and it generates 00:05:11.060 --> 00:05:13.660 a lot of waste lumber on site. Precisely. So 00:05:13.660 --> 00:05:16.319 BLDR, through its manufacturing facilities, produces 00:05:16.319 --> 00:05:19.040 these tresses and wall panels and floor systems 00:05:19.040 --> 00:05:22.560 off -site in a controlled, quality -assured factory 00:05:22.560 --> 00:05:25.459 environment. So it's all standardized? It's engineered 00:05:25.459 --> 00:05:28.339 to precision. delivered, ready to install, and 00:05:28.339 --> 00:05:31.060 it requires far less time and labor on the construction 00:05:31.060 --> 00:05:34.560 site. This efficiency is, I mean, it's immensely 00:05:34.560 --> 00:05:36.399 valuable to their customers, the professional 00:05:36.399 --> 00:05:38.680 builders. Because time is money. Time is the 00:05:38.680 --> 00:05:41.220 most expensive variable in construction. That 00:05:41.220 --> 00:05:43.579 speed and precision allow builders to turn over 00:05:43.579 --> 00:05:46.300 projects faster. So their market position is 00:05:46.300 --> 00:05:48.660 really defined by this capability. They aren't 00:05:48.660 --> 00:05:51.120 just selling a commodity. They're selling labor 00:05:51.120 --> 00:05:53.439 efficiency and, well, time savings. And that 00:05:53.439 --> 00:05:55.399 leads directly to the key fact we started with. 00:05:55.800 --> 00:05:58.319 Builders First Source is the largest supplier 00:05:58.319 --> 00:06:00.899 of these specific value -added products and services 00:06:00.899 --> 00:06:03.600 in the entire U .S. So they've leveraged this 00:06:03.600 --> 00:06:06.699 manufacturing capability to just completely differentiate 00:06:06.699 --> 00:06:08.879 themselves from every other distributor in the 00:06:08.879 --> 00:06:11.240 country. They moved from being just a logistics 00:06:11.240 --> 00:06:13.899 partner to being an integral part of the building 00:06:13.899 --> 00:06:16.079 process itself. And who are the beneficiaries 00:06:16.079 --> 00:06:18.779 of this massive operation? The customer base 00:06:18.779 --> 00:06:21.500 they target is pretty critical to understanding 00:06:21.500 --> 00:06:24.259 their reach. Right. Their focus is extremely 00:06:24.259 --> 00:06:27.600 high level, new residential construction professionals 00:06:27.600 --> 00:06:30.519 and repair and remodeling professionals. Not 00:06:30.519 --> 00:06:33.279 the guy fixing his own deck. No. This means their 00:06:33.279 --> 00:06:36.139 core clients are the national and regional home 00:06:36.139 --> 00:06:38.720 builders, the D .R. Hortons, the Lenners of the 00:06:38.720 --> 00:06:41.560 world, who are putting up hundreds if not thousands 00:06:41.560 --> 00:06:44.560 of homes every single year. So by focusing on 00:06:44.560 --> 00:06:47.720 those volume professionals, BLDR ensures continuous, 00:06:47.879 --> 00:06:51.120 massive sales volume that lets them maximize 00:06:51.120 --> 00:06:53.500 the efficiency of their, what, 550 locations? 00:06:53.899 --> 00:06:56.339 Exactly. They are the backbone that enables high 00:06:56.339 --> 00:06:59.000 -volume housing development. And to truly manage 00:06:59.000 --> 00:07:01.939 that kind of massive B2B relationship, you need 00:07:01.939 --> 00:07:04.720 a sprawling yet highly organized physical footprint. 00:07:05.180 --> 00:07:07.579 Well, the operational scale is genuinely staggering. 00:07:07.920 --> 00:07:10.160 The sources note that they operate approximately 00:07:10.160 --> 00:07:13.240 550 locations. Just think about the logistics 00:07:13.240 --> 00:07:15.850 involved there. It's incredible. That is 550 00:07:15.850 --> 00:07:19.430 independent hubs. Some are lumber yards. Some 00:07:19.430 --> 00:07:21.750 are manufacturing plants for trusses. Some are 00:07:21.750 --> 00:07:24.589 specialized millwork centers. All of them coordinating 00:07:24.589 --> 00:07:27.490 inventory, manufacturing schedules, and delivery 00:07:27.490 --> 00:07:30.689 routes. And those 550 locations are spread across 00:07:30.689 --> 00:07:33.850 40 different U .S. states. 40 states? That's 00:07:33.850 --> 00:07:36.050 four -fifths of the country's states operating 00:07:36.050 --> 00:07:38.430 under one umbrella. The challenge of integrating 00:07:38.430 --> 00:07:40.850 supply chains, inventory management systems, 00:07:41.129 --> 00:07:43.730 and local compliance across nearly the entire 00:07:43.730 --> 00:07:46.939 nation. It's just monumental. It confirms their 00:07:46.939 --> 00:07:49.779 status as a national platform, right? They're 00:07:49.779 --> 00:07:51.920 capable of serving builders who operate across 00:07:51.920 --> 00:07:54.459 multiple states. And managing that footprint 00:07:54.459 --> 00:07:57.319 requires a huge human infrastructure. Which brings 00:07:57.319 --> 00:08:00.019 us to their employee base. Over 15 ,000 people 00:08:00.019 --> 00:08:03.000 employed throughout the USA. This number solidifies 00:08:03.000 --> 00:08:04.939 their position not just as a financial entity, 00:08:05.079 --> 00:08:07.680 but as a major force in the U .S. labor market, 00:08:07.860 --> 00:08:10.379 directly tied to the cyclical health of the housing 00:08:10.379 --> 00:08:13.600 industry. So that's the foundation. That 27 -year 00:08:13.600 --> 00:08:17.339 history. the 550 locations, the focus on high 00:08:17.339 --> 00:08:20.240 margin value added manufacturing. Now we have 00:08:20.240 --> 00:08:22.079 to look at how that foundation translates into 00:08:22.079 --> 00:08:25.040 cold, hard numbers. Right. And this section, 00:08:25.100 --> 00:08:27.300 it reveals the ultimate proof of concept for 00:08:27.300 --> 00:08:29.240 their strategy. Because when you move from being 00:08:29.240 --> 00:08:31.860 a fragmented local supplier to a national manufacturer, 00:08:32.279 --> 00:08:34.539 the resulting financial statements look less 00:08:34.539 --> 00:08:37.100 like a materials company and more like a high 00:08:37.100 --> 00:08:39.299 margin industrial conglomerate. This is where 00:08:39.299 --> 00:08:40.659 it gets really compelling. We've established 00:08:40.659 --> 00:08:43.389 the geographic scale. But the 2022 financial 00:08:43.389 --> 00:08:46.070 results, they just put a dollar value on that 00:08:46.070 --> 00:08:48.029 market dominance. Okay. Let's start with the 00:08:48.029 --> 00:08:50.389 top line. Okay. The 2022 revenue was reported 00:08:50.389 --> 00:08:56.809 as $22 ,726 ,418 ,000. Let's just say that out 00:08:56.809 --> 00:08:59.490 loud. To be clear, that's over $22 .7 billion 00:08:59.490 --> 00:09:02.710 in revenue in a single year. That figure is the 00:09:02.710 --> 00:09:04.649 definitive evidence of their largest supplier 00:09:04.649 --> 00:09:07.970 status. When you look at $22 .7 billion in revenue, 00:09:08.149 --> 00:09:11.149 you realize this company has successfully rolled 00:09:11.149 --> 00:09:14.169 up enough regional competitors and captured enough 00:09:14.169 --> 00:09:18.049 market share to essentially, well, dictate terms 00:09:18.049 --> 00:09:20.610 in certain segments of the supply chain. Right. 00:09:20.830 --> 00:09:23.110 But how do they handle the cost structure to 00:09:23.110 --> 00:09:25.129 generate meaningful returns from that enormous 00:09:25.129 --> 00:09:28.440 top line? See, that's the critical insight. Pure 00:09:28.440 --> 00:09:31.059 distributors often have really thin margins because 00:09:31.059 --> 00:09:33.120 they're competing solely on the commodity price 00:09:33.120 --> 00:09:36.320 of lumber, which fluctuates wildly. That's all 00:09:36.320 --> 00:09:38.220 over the place. But because Builder's First Source 00:09:38.220 --> 00:09:41.039 includes those high margin value added services, 00:09:41.240 --> 00:09:43.220 the manufactured components we talked about, 00:09:43.379 --> 00:09:46.419 their margin structure is just superior. Their 00:09:46.419 --> 00:09:52.100 operating income for 2022 was $3 ,770 ,206 ,000. 00:09:52.720 --> 00:09:56.179 Almost $4 billion in operating income. That gap 00:09:56.179 --> 00:09:58.120 between the revenue and the operating income, 00:09:58.299 --> 00:10:00.460 that's the direct result of having the vertical 00:10:00.460 --> 00:10:02.240 integration capability we just discussed. It 00:10:02.240 --> 00:10:04.240 is. They're capturing the profit not just from 00:10:04.240 --> 00:10:06.379 reselling, but from actually manufacturing the 00:10:06.379 --> 00:10:09.039 finished, customized components. They've basically 00:10:09.039 --> 00:10:11.679 internalized a huge chunk of the builder's job 00:10:11.679 --> 00:10:13.960 site labor costs and turned it into their own 00:10:13.960 --> 00:10:16.639 factory profit. Exactly. And the final profitability 00:10:16.639 --> 00:10:19.600 figure is even more striking. Net income for 00:10:19.600 --> 00:10:26.100 2022 was $2 ,749 ,369 ,000. States dollar. Nearly 00:10:26.100 --> 00:10:29.840 $2 .75 billion in final profits. That is just 00:10:29.840 --> 00:10:32.970 immense profitability. It's a powerful indication 00:10:32.970 --> 00:10:36.490 that the massive, complex integrations they undertook 00:10:36.490 --> 00:10:38.690 were not only successfully managed, but they 00:10:38.690 --> 00:10:41.549 also led to enormous synergies and cost efficiencies 00:10:41.549 --> 00:10:45.190 across those 550 locations. Absolutely. If the 00:10:45.190 --> 00:10:46.870 integration had failed, those numbers would be 00:10:46.870 --> 00:10:49.509 far, far lower, swallowed up by redundancies 00:10:49.509 --> 00:10:51.669 and integration costs. For sure. What this really 00:10:51.669 --> 00:10:54.330 demonstrates is the power of leverage. When you 00:10:54.330 --> 00:10:56.590 are operating a platform that covers 40 states 00:10:56.590 --> 00:11:01.820 and generates $22 billion in revenue, every supplier, 00:11:01.980 --> 00:11:04.039 every shipping company, and every labor pool. 00:11:04.200 --> 00:11:06.240 And that leverage allows them to drive down their 00:11:06.240 --> 00:11:08.799 input costs and maximize the premium they can 00:11:08.799 --> 00:11:11.200 charge for those time -saving factory -built 00:11:11.200 --> 00:11:14.220 components. This success isn't just about selling 00:11:14.220 --> 00:11:17.460 a lot of stuff. It's about optimizing the cost 00:11:17.460 --> 00:11:20.340 structure of the entire operation. Okay, let's 00:11:20.340 --> 00:11:22.139 shift our focus for a moment to the leadership 00:11:22.139 --> 00:11:25.419 steering this ship. Our sources identify Peter 00:11:25.419 --> 00:11:28.159 Jackson as the current CEO, but the corporate 00:11:28.159 --> 00:11:30.700 profile gives us a really useful transition point 00:11:30.700 --> 00:11:33.659 here, because the history of Builders First Sources' 00:11:33.740 --> 00:11:37.259 leadership is irrevocably tied to the history 00:11:37.259 --> 00:11:39.610 of their mergers. That's a crucial connection 00:11:39.610 --> 00:11:42.570 to make. In a company that grows this quickly 00:11:42.570 --> 00:11:45.210 through M &A, the leadership structure is often 00:11:45.210 --> 00:11:47.529 a direct reflection of the latest and most critical 00:11:47.529 --> 00:11:50.389 integration efforts. The executive suite becomes 00:11:50.389 --> 00:11:53.649 a battlefield or maybe more accurately, a complex 00:11:53.649 --> 00:11:56.370 negotiation zone where the best talent from the 00:11:56.370 --> 00:11:58.990 combined entities is selected to move the organization 00:11:58.990 --> 00:12:01.669 forward. And we'll see this later when we discuss 00:12:01.669 --> 00:12:04.809 the BMC merger. The leadership question was paramount, 00:12:04.809 --> 00:12:07.409 and it led to a significant transition where 00:12:07.409 --> 00:12:09.389 the leadership of the acquired rival was actually 00:12:09.389 --> 00:12:11.789 brought in to command the newly merged company. 00:12:11.909 --> 00:12:14.009 Which is fascinating. It tells us the board is 00:12:14.009 --> 00:12:16.730 ruthlessly prioritizing operational efficiency 00:12:16.730 --> 00:12:20.789 and smooth integration over maintaining any specific 00:12:20.789 --> 00:12:23.669 internal legacy management. It's a sign of a 00:12:23.669 --> 00:12:27.039 strategically disciplined organization. The financials 00:12:27.039 --> 00:12:28.919 prove the model works, but now we have to move 00:12:28.919 --> 00:12:31.159 to the engine itself. This massive platform, 00:12:31.299 --> 00:12:33.639 those huge profits, they didn't just appear by 00:12:33.639 --> 00:12:35.899 magic. Right. They were built through a series 00:12:35.899 --> 00:12:38.879 of increasingly daring and successful corporate 00:12:38.879 --> 00:12:42.899 maneuvers. Okay, so if the $22 .7 billion in 00:12:42.899 --> 00:12:45.220 revenue is the outcome, then the M &A strategy 00:12:45.220 --> 00:12:48.809 we're about to discuss is the process. Builder's 00:12:48.809 --> 00:12:50.990 first source didn't just wait for market opportunities. 00:12:51.210 --> 00:12:54.049 They created them by strategically consuming 00:12:54.049 --> 00:12:56.470 their competition and then vertically integrating 00:12:56.470 --> 00:12:59.269 key capabilities. You can trace their path to 00:12:59.269 --> 00:13:01.549 dominance through three pretty distinct phases 00:13:01.549 --> 00:13:04.570 of acquisition. The first was the single massive 00:13:04.570 --> 00:13:06.549 step that launched them into the national big 00:13:06.549 --> 00:13:09.549 leagues. And that would be 3 .1. The landmark 00:13:09.549 --> 00:13:12.009 2015 acquisition of ProBuild. This was the big 00:13:12.009 --> 00:13:13.950 bang acquisition, right? This is the one. It 00:13:13.950 --> 00:13:16.809 absolutely was. When Builder's first source acquired 00:13:16.809 --> 00:13:20.809 ProBuild in 2015, this was a market restructuring 00:13:20.809 --> 00:13:24.649 event. ProBuild was a formidable rival. The goal 00:13:24.649 --> 00:13:27.389 here wasn't some niche expansion. It was pure 00:13:27.389 --> 00:13:30.409 horizontal scale. Just get bigger. It was about 00:13:30.409 --> 00:13:33.629 consuming the competition to drastically increase 00:13:33.629 --> 00:13:36.350 their national footprint and market share basically 00:13:36.350 --> 00:13:39.549 overnight. So what was the immediate quantitative 00:13:39.549 --> 00:13:41.950 impact of this merger? What do the numbers look 00:13:41.950 --> 00:13:45.309 like? The sheer size is breathtaking. The combined 00:13:45.309 --> 00:13:49.409 entity immediately boasted $6 .1 billion in combined 00:13:49.409 --> 00:13:53.690 revenue based on 2014 figures. Wow. And just 00:13:53.690 --> 00:13:55.490 think, if you had been operating at a much smaller 00:13:55.490 --> 00:13:57.889 scale and then suddenly you nearly triple your 00:13:57.889 --> 00:14:00.590 size with a single transaction, the operational 00:14:00.590 --> 00:14:02.490 challenge is terrifying. Oh, yeah. You inherit 00:14:02.490 --> 00:14:05.149 new debt, new systems, new management structures, 00:14:05.350 --> 00:14:07.389 and a whole lot of redundant locations you have 00:14:07.389 --> 00:14:09.279 to figure out what to do with. That's the part 00:14:09.279 --> 00:14:10.940 that gets glossed over in the press releases. 00:14:11.120 --> 00:14:13.080 It's not just combining two revenue streams. 00:14:13.240 --> 00:14:15.539 It's merging two massive logistical operations. 00:14:16.360 --> 00:14:18.860 This acquisition could have crippled the company 00:14:18.860 --> 00:14:21.360 through debt and failed integration. But it didn't. 00:14:21.460 --> 00:14:23.879 Instead, it became the undisputed foundation 00:14:23.879 --> 00:14:26.549 for their next leap. So they pulled it off. They 00:14:26.549 --> 00:14:28.830 did. The source material confirms the success 00:14:28.830 --> 00:14:31.529 of the integration. The combined company continued 00:14:31.529 --> 00:14:33.970 this momentum, proving the synergy was real and 00:14:33.970 --> 00:14:37.309 sustainable. By 2018, the combined revenue had 00:14:37.309 --> 00:14:43.470 risen to $7 .7 billion. So a $1 .6 billion increase 00:14:43.470 --> 00:14:46.509 in four years post -merger. That's the payoff. 00:14:46.669 --> 00:14:49.210 That's it. It shows that the expanded geographic 00:14:49.210 --> 00:14:52.029 reach and the ability to leverage their new combined 00:14:52.029 --> 00:14:55.149 purchasing power allowed them to grow organically 00:14:55.149 --> 00:14:58.350 within that new massive footprint. They successfully 00:14:58.350 --> 00:15:01.350 digested pro build and use that scale to capture 00:15:01.350 --> 00:15:04.009 even more business. So once they achieve that 00:15:04.009 --> 00:15:06.990 massive horizontal dominance, that national reach 00:15:06.990 --> 00:15:09.470 and bulk purchasing power, the strategy pivots. 00:15:09.490 --> 00:15:12.009 Right. They move from simply buying scale to 00:15:12.009 --> 00:15:14.330 buying specific high margin capabilities. This 00:15:14.330 --> 00:15:16.700 is the shift to three. Targeted vertical integration 00:15:16.700 --> 00:15:20.080 starting in late 2019 and early 2020. This is 00:15:20.080 --> 00:15:22.720 where the strategy moves from big and bold to 00:15:22.720 --> 00:15:26.320 surgical and nuanced. They use smaller targeted 00:15:26.320 --> 00:15:29.919 acquisitions to plug strategic holes and reinforce 00:15:29.919 --> 00:15:32.779 that high margin value added capability that 00:15:32.779 --> 00:15:35.759 we know drives their profitability. They were 00:15:35.759 --> 00:15:38.019 creating a defensible business mode. That's a 00:15:38.019 --> 00:15:39.740 great way to put it. So let's look at the first 00:15:39.740 --> 00:15:42.820 key example of this. In December 2019, they acquired 00:15:42.820 --> 00:15:46.279 Reni Components, LLC and Reni Construction Inc. 00:15:46.720 --> 00:15:48.820 The acquisition of Rainey, which is based in 00:15:48.820 --> 00:15:51.259 Groveland, Florida, was extremely forward looking. 00:15:51.460 --> 00:15:54.639 The core strategic value was explicitly stated. 00:15:54.879 --> 00:15:57.480 It added vertically integrated capabilities, 00:15:57.840 --> 00:16:01.100 specifically offsite manufacturing of prefabricated 00:16:01.100 --> 00:16:03.799 components. The trusses and wall panels. Exactly. 00:16:04.019 --> 00:16:07.019 And value added services across the crucial Florida 00:16:07.019 --> 00:16:09.159 market. Florida is one of the fastest growing 00:16:09.159 --> 00:16:11.679 residential markets in the U .S. So by acquiring 00:16:11.679 --> 00:16:14.480 Rainey, BLDR didn't just buy a supplier. They 00:16:14.480 --> 00:16:16.700 bought a factory that creates labor -saving, 00:16:16.700 --> 00:16:19.139 precision -engineered products. It's like securing 00:16:19.139 --> 00:16:22.600 a crucial input. Off -site manufacturing insulates 00:16:22.600 --> 00:16:24.720 them from some of the volatility of job -site 00:16:24.720 --> 00:16:26.879 labor shortages, and it keeps quality control 00:16:26.879 --> 00:16:30.159 high. So by bringing that in -house, they secure 00:16:30.159 --> 00:16:32.620 both the margin and the competitive advantage 00:16:32.620 --> 00:16:34.740 of speed. And they understood that this acquisition 00:16:34.740 --> 00:16:37.240 wouldn't be complete without broadening the types 00:16:37.240 --> 00:16:39.639 of services they offer. And that led directly 00:16:39.639 --> 00:16:42.500 to the next targeted acquisition in January 2020. 00:16:42.980 --> 00:16:46.639 Bianchi & Company, Inc. Bianchi & Company, located 00:16:46.639 --> 00:16:49.240 in Charlotte, North Carolina, was noted as a 00:16:49.240 --> 00:16:52.299 millwork supplier and install company. What's 00:16:52.299 --> 00:16:55.980 millwork? Think doors, windows, molding, trim. 00:16:56.080 --> 00:16:58.659 It's the highly customized, detail -oriented 00:16:58.659 --> 00:17:02.100 part of the build that demands skilled installers. 00:17:02.139 --> 00:17:05.299 Got it. So by acquiring Bianchi, BLDR could now 00:17:05.299 --> 00:17:08.460 offer a supply and install solution. This makes 00:17:08.460 --> 00:17:10.720 them far more sticky with a professional builder. 00:17:10.900 --> 00:17:13.079 The builder only has to deal with one vendor, 00:17:13.180 --> 00:17:15.799 one contract, one point of contact for the entire 00:17:15.799 --> 00:17:18.259 millwork package, including the actual installation. 00:17:18.539 --> 00:17:21.059 That's huge. It significantly deepens the relationship 00:17:21.059 --> 00:17:23.859 and creates a massive barrier to entry for smaller 00:17:23.859 --> 00:17:26.359 competitors who can't offer that. So we have 00:17:26.359 --> 00:17:29.140 scale from ProBuild. We have manufacturing capability 00:17:29.140 --> 00:17:32.000 from Rainy. and then expanded service and install 00:17:32.000 --> 00:17:35.640 offerings from Bianchi. This three -pronged approach 00:17:35.640 --> 00:17:38.579 really set the stage for the consolidation event 00:17:38.579 --> 00:17:41.160 that truly solidified their market leadership. 00:17:41.480 --> 00:17:46.660 Yes. 3 .3. The mega merger. BMC Stock Holdings 00:17:46.660 --> 00:17:51.000 2021. If ProBuild was a launch, BMC was like... 00:17:51.160 --> 00:17:54.019 achieving stable orbit. I like that. In September 00:17:54.019 --> 00:17:56.559 2020, they announced the merger with BMC Stock 00:17:56.559 --> 00:17:59.920 Holdings. This was a combination of two major 00:17:59.920 --> 00:18:02.380 national players who had already executed similar 00:18:02.380 --> 00:18:05.019 aggressive growth strategies as their own. And 00:18:05.019 --> 00:18:07.400 the outcome of this was clear. The newly merged 00:18:07.400 --> 00:18:09.720 company would operate entirely under the builder's 00:18:09.720 --> 00:18:12.019 first source branding. Which is a powerful signal. 00:18:12.180 --> 00:18:14.000 They weren't interested in a compromise brand 00:18:14.000 --> 00:18:15.980 or a co -branded name. They wanted to assert 00:18:15.980 --> 00:18:18.220 the singular identity of the dominant entity. 00:18:18.339 --> 00:18:20.400 No question who was in charge. Right. And the 00:18:20.400 --> 00:18:22.319 most fascinating element of this merger, beyond 00:18:22.319 --> 00:18:24.799 just the colossal size of the combined entity, 00:18:25.039 --> 00:18:28.099 was the post -merger integration process, specifically 00:18:28.099 --> 00:18:30.240 regarding the leadership legacy. This is where 00:18:30.240 --> 00:18:32.779 it gets interesting. This merger required a level 00:18:32.779 --> 00:18:35.680 of operational expertise that the board clearly 00:18:35.680 --> 00:18:38.759 recognized demanded specialized attention. And 00:18:38.759 --> 00:18:40.779 the source material highlights that Immediately 00:18:40.779 --> 00:18:44.619 following the merger in January 2021, the former 00:18:44.619 --> 00:18:47.559 BMC president and CEO Dave Flitman was named 00:18:47.559 --> 00:18:49.700 president of the merged entity. The guy from 00:18:49.700 --> 00:18:52.440 the company they just bought. Right. I have to 00:18:52.440 --> 00:18:55.339 ask, bringing in the CEO of the company you just 00:18:55.339 --> 00:18:58.430 acquired to lead the combined organization. What 00:18:58.430 --> 00:19:00.210 does that tell us about the integration challenges? 00:19:00.529 --> 00:19:03.049 It tells us two things very, very clearly. First, 00:19:03.230 --> 00:19:06.269 that BMC had highly valuable operational infrastructure 00:19:06.269 --> 00:19:09.769 and talent that BLDR needed to preserve and leverage. 00:19:09.990 --> 00:19:11.730 They didn't want to break the toy, they just 00:19:11.730 --> 00:19:14.150 bought it. And second, that Flitman was likely 00:19:14.150 --> 00:19:16.730 the most qualified person to navigate the inevitable 00:19:16.730 --> 00:19:19.049 cultural and system clashes that follow such 00:19:19.049 --> 00:19:22.049 a large merger. The board was essentially saying, 00:19:22.150 --> 00:19:24.690 we acquired your business, but we respect and 00:19:24.690 --> 00:19:26.569 require your expertise to make the integration 00:19:26.569 --> 00:19:29.130 seamless. profitable. It's an aggressive yet 00:19:29.130 --> 00:19:31.650 humble move. It really is. And this wasn't just 00:19:31.650 --> 00:19:34.490 some temporary gesture either. Just three months 00:19:34.490 --> 00:19:38.180 later, in April 2021. Following a 90 -day transition 00:19:38.180 --> 00:19:42.240 period, Flipman was named CEO of the entire company. 00:19:42.440 --> 00:19:44.599 Which confirms it. The board's commitment to 00:19:44.599 --> 00:19:47.279 prioritizing integration and operational continuity 00:19:47.279 --> 00:19:50.779 above all else. The merger fundamentally changed 00:19:50.779 --> 00:19:53.259 the DNA of the C -suite. It's a classic move 00:19:53.259 --> 00:19:56.160 in mature consolidation phases. You bring in 00:19:56.160 --> 00:19:58.660 the proven operator, even if they come from the 00:19:58.660 --> 00:20:00.859 acquired entity, to ensure you don't lose the 00:20:00.859 --> 00:20:03.880 value you just paid billions for. Exactly. So 00:20:03.880 --> 00:20:06.569 the M &A strategy pro -build for scale. Rainey 00:20:06.569 --> 00:20:09.589 and Bianchi for margin and BMC for ultimate consolidation, 00:20:09.950 --> 00:20:12.710 it created this massive revenue generating machine. 00:20:13.089 --> 00:20:15.329 And once that machine was built and stabilized, 00:20:15.710 --> 00:20:18.049 the focus shifted entirely to maximizing the 00:20:18.049 --> 00:20:19.990 return for shareholders. And that's where the 00:20:19.990 --> 00:20:21.609 capital strategy comes into play. That's the 00:20:21.609 --> 00:20:23.509 next chapter. So if the acquisitions were the 00:20:23.509 --> 00:20:25.809 engine, the cash flow resulting from that massive 00:20:25.809 --> 00:20:28.819 scale is the fuel. Once the BMC merger was successfully 00:20:28.819 --> 00:20:30.839 finalized and the efficiencies began to bear 00:20:30.839 --> 00:20:32.900 fruit, the company transitioned from being a 00:20:32.900 --> 00:20:35.960 major acquirer to being a major investor in itself. 00:20:36.299 --> 00:20:38.839 And this shift is such a critical piece of the 00:20:38.839 --> 00:20:41.400 puzzle. When management has proven they can grow 00:20:41.400 --> 00:20:44.619 externally through M &A, the next sign of maturity 00:20:44.619 --> 00:20:46.619 is proving they can manage the resulting cash 00:20:46.619 --> 00:20:49.720 internally, demonstrating confidence in future 00:20:49.720 --> 00:20:52.460 earnings. Which brings us to 4 .1, the importance 00:20:52.460 --> 00:20:55.049 of stock repurchase programs. Right. And this 00:20:55.049 --> 00:20:57.369 isn't some small scale share dilution prevention. 00:20:57.690 --> 00:21:00.869 We are talking about multibillion dollar programs 00:21:00.869 --> 00:21:03.670 that send an incredibly clear signal to the market 00:21:03.670 --> 00:21:06.369 about the company's financial health. The sheer 00:21:06.369 --> 00:21:09.180 scale is difficult to overstate. The company 00:21:09.180 --> 00:21:12.339 detailed the completion of $2 billion in stock 00:21:12.339 --> 00:21:14.720 repurchase programs that were initiated in 2021. 00:21:15.119 --> 00:21:18.000 $2 billion? Just think about the level of free 00:21:18.000 --> 00:21:21.160 cash flow required to execute a $2 billion buyback. 00:21:21.420 --> 00:21:24.059 It signals they had an immense amount of capital 00:21:24.059 --> 00:21:25.980 that was not needed for immediate operational 00:21:25.980 --> 00:21:30.099 expenses or debt servicing or even further large 00:21:30.099 --> 00:21:32.960 -scale M &A. Because they had effectively captured 00:21:32.960 --> 00:21:34.859 the major competition already. They'd done it. 00:21:35.109 --> 00:21:36.970 So for the learner, let's quickly explain what 00:21:36.970 --> 00:21:39.410 a stock repurchase program actually does because 00:21:39.410 --> 00:21:41.789 it's a direct method of returning capital to 00:21:41.789 --> 00:21:44.589 shareholders. Sure. So when a company repurchases 00:21:44.589 --> 00:21:46.730 its own stock, it is literally taking shares 00:21:46.730 --> 00:21:49.529 out of the open market and retiring them. Taking 00:21:49.529 --> 00:21:52.589 them out of circulation. Exactly. And this achieves 00:21:52.589 --> 00:21:55.950 two primary objectives. First, it reduces the 00:21:55.950 --> 00:21:58.769 total number of outstanding shares, which mechanically 00:21:58.769 --> 00:22:02.009 boosts your earnings per share, or EPS. How does 00:22:02.009 --> 00:22:04.250 that work? Well, if your net income stays the 00:22:04.250 --> 00:22:06.829 same but the number of shares decreases, the 00:22:06.829 --> 00:22:08.970 slice of profit allocated to each individual 00:22:08.970 --> 00:22:11.789 share goes up, which makes the stock more appealing. 00:22:12.109 --> 00:22:13.829 Okay, makes sense. What's the second objective? 00:22:14.170 --> 00:22:16.829 Second, it signals massive managerial confidence. 00:22:17.529 --> 00:22:20.009 Management is essentially saying, we believe 00:22:20.009 --> 00:22:21.950 the best investment opportunity available right 00:22:21.950 --> 00:22:25.470 now is our own stock. valued and we are willing 00:22:25.470 --> 00:22:27.789 to spend billions of our own cash to prove it. 00:22:27.849 --> 00:22:30.450 And this wasn't just a single event. They completed 00:22:30.450 --> 00:22:32.690 two billion dollars and then they immediately 00:22:32.690 --> 00:22:34.750 accelerated the strategy. They doubled down. 00:22:35.160 --> 00:22:37.200 The source material confirms that on February 00:22:37.200 --> 00:22:41.079 18th, 2022, they authorized a new $1 billion 00:22:41.079 --> 00:22:44.059 stock repurchase plan. Another billion. So when 00:22:44.059 --> 00:22:46.319 you analyze the total capital deployed towards 00:22:46.319 --> 00:22:49.740 this strategy, that's $3 billion dedicated to 00:22:49.740 --> 00:22:52.099 repurchases in a relatively tight time window 00:22:52.099 --> 00:22:54.960 right after the BMC merger. It just proves that 00:22:54.960 --> 00:22:56.960 the company successfully converted the paper 00:22:56.960 --> 00:23:00.160 value of their acquisitions into immense deployable 00:23:00.160 --> 00:23:03.000 cash flow. It shows a highly disciplined approach 00:23:03.000 --> 00:23:06.420 to capital allocation. They aggressively pursued 00:23:06.420 --> 00:23:09.759 growth. And once that growth bore fruit, they 00:23:09.759 --> 00:23:12.240 shifted that aggressiveness into rewarding their 00:23:12.240 --> 00:23:14.960 existing shareholders. And this leads us directly 00:23:14.960 --> 00:23:18.380 to 4 .2, connecting the dots between the M &A 00:23:18.380 --> 00:23:21.940 history and this capital strategy. Why this sudden, 00:23:22.079 --> 00:23:24.579 you know, torrent of cash being returned? It's 00:23:24.579 --> 00:23:26.440 because the profitability they promised during 00:23:26.440 --> 00:23:28.839 the merger phase was actually delivered. That's 00:23:28.839 --> 00:23:31.500 the whole thesis. The idea behind the ProBuild 00:23:31.500 --> 00:23:33.680 and DMC mergers was that combining operations 00:23:33.680 --> 00:23:36.700 would yield massive synergies, reduce costs, 00:23:36.920 --> 00:23:39.240 and most importantly, generate superior free 00:23:39.240 --> 00:23:41.359 cash flow because of their market leverage and 00:23:41.359 --> 00:23:43.619 vertical integration. And the 2022 financial 00:23:43.619 --> 00:23:46.400 results, that $22 .7 billion in revenue and the 00:23:46.400 --> 00:23:48.960 $2 .7 billion in net income, that's the proof. 00:23:49.339 --> 00:23:53.440 It is. That massive recurring profit provided 00:23:53.440 --> 00:23:56.779 the liquidity necessary to execute these multi 00:23:56.779 --> 00:23:59.779 -billion dollar repurchase programs. The growth 00:23:59.779 --> 00:24:01.720 strategy and the capital management strategy 00:24:01.720 --> 00:24:04.660 are two sides of the same coin. The M &A funded 00:24:04.660 --> 00:24:07.500 the cash flow. And the cash flow funded the repurchases. 00:24:08.000 --> 00:24:10.279 That also tells us something about their future 00:24:10.279 --> 00:24:13.240 outlook on acquisitions, doesn't it? When a company 00:24:13.240 --> 00:24:16.019 executes repurchases of this magnitude, they 00:24:16.019 --> 00:24:18.299 are implicitly signaling that they don't see 00:24:18.299 --> 00:24:21.460 another major high -value acquisition opportunity 00:24:21.460 --> 00:24:24.759 on the immediate horizon that would warrant holding 00:24:24.759 --> 00:24:27.079 on to $3 billion in cash. So they've captured 00:24:27.079 --> 00:24:29.160 the market. They've won the game, so to speak. 00:24:29.359 --> 00:24:31.619 Yeah. They moved into a phase of optimization, 00:24:31.759 --> 00:24:34.039 not acquisition. They have built the platform, 00:24:34.259 --> 00:24:36.059 and now they are using financial engineering 00:24:36.059 --> 00:24:38.619 to maximize the value derived from that platform. 00:24:38.839 --> 00:24:41.079 So the repurchase program is the ultimate expression 00:24:41.079 --> 00:24:42.980 of... confidence that the scale they achieve 00:24:42.980 --> 00:24:46.359 through M &A is durable, efficient, and capable 00:24:46.359 --> 00:24:49.059 of sustained high -level earnings. They essentially 00:24:49.059 --> 00:24:51.619 rolled up an entire fragmented industry and are 00:24:51.619 --> 00:24:53.759 now sitting on the cash generated by their dominant 00:24:53.759 --> 00:24:57.119 position. It truly is a textbook example of a 00:24:57.119 --> 00:24:59.839 roll -up strategy in an industrial sector executed 00:24:59.839 --> 00:25:02.369 with speed, discipline, and remarkable effectiveness, 00:25:02.730 --> 00:25:05.990 creating a national, almost monopoly -like presence 00:25:05.990 --> 00:25:08.470 within three decades. And their story demonstrates 00:25:08.470 --> 00:25:10.789 that the building supply industry, which is often 00:25:10.789 --> 00:25:14.230 viewed as slow and traditional, is actually ripe 00:25:14.230 --> 00:25:16.869 for the kind of sophisticated financial and operational 00:25:16.869 --> 00:25:19.130 strategy you might typically associate with, 00:25:19.210 --> 00:25:22.369 you know, tech or finance giants. As we wrap 00:25:22.369 --> 00:25:24.750 up this deep dive, the journey of Builder's First 00:25:24.750 --> 00:25:27.640 Source is just a fascinating case study. We started 00:25:27.640 --> 00:25:29.500 with a name you might not immediately recognize 00:25:29.500 --> 00:25:32.500 and revealed a Fortune 500 company operating 00:25:32.500 --> 00:25:34.740 at the absolute peak of the U .S. construction 00:25:34.740 --> 00:25:37.759 supply chain. Their story is a timeline of intentional 00:25:37.759 --> 00:25:40.839 scale building from that 1998 incorporation to 00:25:40.839 --> 00:25:43.940 their S &P 500 status today, built on the back 00:25:43.940 --> 00:25:46.299 of massive integrations. The pro build acquisition 00:25:46.299 --> 00:25:48.539 brought the initial horizontal scale. And the 00:25:48.539 --> 00:25:50.839 BMC merger solidified their undisputed market 00:25:50.839 --> 00:25:54.380 leadership, all validated by that $22 .7 billion 00:25:54.380 --> 00:25:58.420 in revenue in 2022. And that success was then 00:25:58.420 --> 00:26:01.519 reinvested not in more acquisitions, but in themselves 00:26:01.519 --> 00:26:05.160 through that robust and shareholder friendly 00:26:05.160 --> 00:26:08.440 capital management strategy, pouring billions 00:26:08.440 --> 00:26:11.660 into stock repurchase programs. So the critical 00:26:11.660 --> 00:26:14.279 takeaway for you, the learner, is understanding 00:26:14.279 --> 00:26:16.519 the power of strategic vertical integration. 00:26:17.200 --> 00:26:19.480 Builders' first source didn't just consolidate 00:26:19.480 --> 00:26:22.059 the market. They simultaneously changed their 00:26:22.059 --> 00:26:24.900 business model. Moving from being a mere distributor 00:26:24.900 --> 00:26:28.200 of materials to a manufacturer of time -saving, 00:26:28.200 --> 00:26:31.220 high -margin finished components, they control 00:26:31.220 --> 00:26:33.000 the most efficient parts of the supply chain 00:26:33.000 --> 00:26:35.299 now. And this leads us to our final provocative 00:26:35.299 --> 00:26:37.380 thought, something that connects these acquisition 00:26:37.380 --> 00:26:39.599 reports back to the physical world around you. 00:26:39.680 --> 00:26:42.160 We spent time detailing the importance of acquiring 00:26:42.160 --> 00:26:44.859 offset manufacturing capabilities, evidenced 00:26:44.859 --> 00:26:47.500 by that 2019 acquisition of Rainy Components. 00:26:47.680 --> 00:26:49.940 Right. And historically, construction has relied 00:26:49.940 --> 00:26:52.460 on manual labor and site -specific assembly for 00:26:52.460 --> 00:26:54.299 components like roof frames and wall panels. 00:26:54.660 --> 00:26:57.480 This process is highly sensitive to labor shortages 00:26:57.480 --> 00:27:00.819 and, of course, weather delays. But if the largest, 00:27:00.960 --> 00:27:03.859 most dominant supplier in the country, is also 00:27:03.859 --> 00:27:07.180 simultaneously the largest most efficient manufacturer 00:27:07.180 --> 00:27:11.359 of pre -assembled factory -built wall and truss 00:27:11.359 --> 00:27:14.480 components essentially delivering a substantial 00:27:14.480 --> 00:27:17.190 part of the house frame ready to assemble. What 00:27:17.190 --> 00:27:20.509 future implications does this dominance in offsite 00:27:20.509 --> 00:27:23.450 manufacturing have for the ultimate speed and 00:27:23.450 --> 00:27:25.829 cost of new residential construction across the 00:27:25.829 --> 00:27:28.029 40 states they operate in? That's the question. 00:27:28.210 --> 00:27:30.509 Builders First Source is not just supplying materials 00:27:30.509 --> 00:27:33.589 anymore. They are industrializing the home building 00:27:33.589 --> 00:27:36.150 process. And if they can streamline construction 00:27:36.150 --> 00:27:39.160 and shave weeks off the build time. That leverage 00:27:39.160 --> 00:27:41.619 could fundamentally impact the velocity of housing 00:27:41.619 --> 00:27:43.660 supply. Which could potentially affect everything 00:27:43.660 --> 00:27:45.859 from regional real estate markets to overall 00:27:45.859 --> 00:27:47.680 housing affordability in the coming decades. 00:27:47.920 --> 00:27:50.160 It's a huge shift. A shift that transforms the 00:27:50.160 --> 00:27:52.539 entire industry, driven by a company that started 00:27:52.539 --> 00:27:55.440 just 27 years ago. Thank you for joining us on 00:27:55.440 --> 00:27:57.440 this deep dive into how builders first source 00:27:57.440 --> 00:27:59.740 built their financial and operational behemoth. 00:27:59.839 --> 00:28:01.740 Keep digging for the story behind the numbers 00:28:01.740 --> 00:28:04.380 and the strategy behind the scale. We'll see 00:28:04.380 --> 00:28:04.940 you next time.