Welcome to th`e BlueLinx first quarter 2023 results conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce our host, Alexandra Lucas, Manager of IR. You may begin, ma'am.
Thank you, operator. Good morning, everyone, and welcome to the BlueLinx Holdings first quarter 2023 earnings call. Presenting today are Shyam Reddy, President and CEO of BlueLinx, and Kelly Janzen, our Chief Financial Officer. Our first quarter news release and Form 10-Q were issued yesterday after the close of the market, along with our webcast presentation. These items are available in the investor section of our website, bluelinxco.com. We encourage you to follow along with the detailed information on the slides during our webcast. Today's discussion contains forward-looking statements. Actual results may differ significantly from those forward-looking statements due to various risks and uncertainties, including the risks described in our most recent SEC filings. Today's presentation includes certain non-GAAP and adjusted financial measures that we believe provide helpful context for investors evaluating our business.
Reconciliation to the closest GAAP financial measure can be found in the appendix of our presentation. At the conclusion of our prepared remarks, we will open the line for questions. With that, I'll turn the call over to Shyam.
Thanks, Alexandra. Good morning, everyone. We appreciate you joining us today. I'd like to start by thanking my predecessor, Dwight Gibson. I'm grateful for his leadership and appreciative of his many contributions for and on behalf of BlueLinx and our associates. Before I give my quarterly remarks, it's important to highlight the momentum we've gained over the last several years to generate profitable sales growth. Specifically, we took full advantage of the accelerated housing recovery that occurred during the pandemic by focusing on customer service, strategic inventory management, and operational excellence. Fortunately, our efforts accelerated our specialty product strategies during this recent period of unprecedented growth.
In fact, our strong financial performance over the last three years has allowed us to allocate capital to support sustained profitable sales growth, reduce net leverage from 9.7x to 0.6x, invest almost $62 million in CapEx, acquire Vandermeer Forest Products for $67 million, and repurchase $66 million of outstanding shares. We intend to exhaust the remaining $34 million of capacity under our current $100 million share repurchase program in the near term, which is an exciting place to be given the journey we've been on over the last several years.
While we are now experiencing a difficult housing and building products environment, I am confident we can navigate these current market conditions and grow our business for years to come because the grit, resilience, and competitive nature of our associates will continue to support our efforts to generate long-term value for our shareholders. As we head deeper into the second quarter, we remain resolute about continuing our strategy, but with a greater focus on clarity, execution, and efficiency around three key areas. First, we are firmly committed to growing our five high-value specialty product categories: engineered wood, siding, millwork, industrial, and outdoor living.
Second, we are committed to driving operational, pricing, and procurement excellence by leveraging our corporate capabilities to implement best practices that will reduce costs and enable us to be more productive, that will ensure pricing discipline to generate profitable sales, and that will take advantage of our deep supplier relationships to strengthen the value proposition for both our customers and suppliers. Doing so will fuel the market strategies being pursued by our national account local market leaders to generate profitable sales. Third, we will remain disciplined in our approach to capital allocation so that our balance sheet remains strong. Doing so will allow us to grow the business both organically through sales growth initiatives and inorganically through accretive acquisitions while giving us the flexibility to opportunistically repurchase shares.
While we've entered a more challenging period in the housing cycle, continued focus on these strategic priorities will enable us to navigate the current downturn and take advantage of the opportunities that arise when the market improves so that we can grow our business and create long-term value for all of our stakeholders, especially our shareholders. Now moving on to Q1 2023 performance. During the first quarter, our end markets, which primarily include residential new home construction and repair remodel, continued to be adversely impacted by the effects of a higher interest rate environment and home affordability issues. These factors have contributed to a significant year-over-year reduction in new single-family housing starts for the quarter, which declined to 29% when compared to Q1 2022. Single-family housing starts of approximately 900,000 are now closer to the 50-year average.
Repair and remodel activity also slowed down compared to the peak last year. Despite the challenging markets and volume declines resulting from an overall reduction in building products demand, I am pleased with our solid first quarter results. We generated net sales of $798 million and $18 million of net income. This resulted in $2.53 per diluted share on an adjusted basis, and $47 million in Adjusted EBITDA, or about 6% of net sales. We also generated $89 million of operating cash flow, an increase of $87 million when compared to last year, a significant accomplishment. Sequentially speaking, the story is equally compelling. Over the last two quarters, we generated a total of $243 million in operating cash.
During the same period, we also increased our liquidity by approximately $150 million to end the quarter at a record $723 million. The additional cash on hand further strengthens our ability to execute on our capital allocation initiative. As expected, our sales volumes were lower in the first quarter, particularly within our specialty product categories. Engineered wood products, for example, are directly tied to new home construction, so it's not surprising that we experienced meaningful declines in this category. As the market stabilize and new home starts increase, we expect to see improvement in specialty volumes. In addition to volume declines, our specialty products also experienced modest price deflation due to the building product supply chain loosening up and functioning at pre-pandemic levels.
Net sales in our structural product category were down 57% because wood-based commodity prices were down more than 60% year-over-year. Volumes were relatively consistent with the first quarter of last year. Despite the current market contractions, we delivered a strong margin performance in both specialty and structural products during the first quarter. 18.8% for specialty, 11.7% for structural. We did that because we've developed refined pricing and cost containment capabilities over several years to maintain and expand margins as the markets ebb and flow. We are also aggressively managing our working capital given the muscle we've developed over the last few years, which we believe gives us a competitive advantage. That discipline and relentless focus on inventory management helped us reduce our total inventory by $75 million since the beginning of the year.
We took specific actions to align our specialty inventory levels with current market conditions. We also continued to successfully execute on our strategy to maintain low levels of structural inventory, which at the end of the quarter represented less than 15% of our total inventory balance. Through the first four weeks of Q2, we continued to see solid margins for both specialty and structural products and average daily volumes that are up slightly versus Q1. In terms of the market outlook, we are beginning to see some positive signs in the housing market, with single-family housing starts increasing 3% in March when compared to February 2023. Builders' confidence is also up 14 points since December to 45. Some regional market differences also persist, where new home markets are experiencing softer demand when compared to other geographies.
As we look at the full year, we continue to believe that single-family housing starts will be down compared to 2022. On the other hand, we believe that recent housing turnover, aged housing stock, and high levels of homeowners' equity will continue to support the repair and remodel market. Our scale and geographic reach enable us to effectively manage the ups and downs of the market. Even with market cyclicality and the current declines we're experiencing in the housing sector, the long-term prospects of the building products industry are strong. Ultimately, this reality will fuel the housing industry once the market improves and provide future profitable opportunities that we will capitalize on to grow our business.
In summary, we delivered solid first quarter financial results in a challenging macro environment, we continued to make progress on strategic priorities that are designed to position the business for long-term profitable sales growth. This success led to meaningful cash generation that we intend to put to work for our shareholders through $34 million of share repurchases in the near term, which will close out our current $100 million share repurchase program. I believe that our strategy, along with our strong balance sheet and disciplined approach to capital allocation, positions us well to take advantage of the housing market as it improves. That concludes my opening remarks. I'll now turn the call over to Kelly for a detailed discussion of our financial results and capital structure. Following that, I'll provide closing remarks before we take your questions. Kelly?
Thanks, Shyam, good morning, everyone. I'll start with the first quarter results. We delivered a solid performance highlighted by strong margins across both our specialty and structural product categories, considering the backdrop of softer market conditions. Net sales were $798 million, down 39% year-over-year. Specialty product sales were down 26% over the prior year due primarily to lower volume. 80% of our gross profit was derived from specialty product sales, which is up from 63% in the prior year period. Structural product sales were down 57%, almost exclusively due to significant year-over-year declines in commodity prices.
Total gross profit was $134 million, Gross margin was 16.7%, which was down 560 basis points from the prior year period, Still higher than margin levels experienced before the last couple of years. When reviewing the year-over-year comparison, it's important to point out that in the first quarter of 2022, we experienced historically high levels of demand and significant price inflation across the business. While the variances are quite significant, we are pleased with the financial results we generated this quarter considering the recent market downturn. Turning now to the first quarter results for specialty products, net sales were $568 million, down 26% year-over-year. This decline was primarily driven by lower volume, especially in categories that are tied to new residential construction like engineered wood.
Gross profit from specialty product sales was $107 million, down $77 million due to the volume decline. Specialty gross margin was 18.8%, a strong margin, but down 520 basis points from last year when prices were near their peak, given most of the supply was still on allocation. Through the first four weeks of Q2, specialty products gross margin was in the range of 18%-19%, with daily sales volume slightly improved versus the first quarter of this year. Moving on to structural products. Net sales were $230 million, down 57% compared to the prior year period. This decrease was primarily due to the significant year-over-year declines in average composite lumber and panel prices and volume, which was relatively consistent with the prior year.
For Random Lengths, the average price in the first quarter of 2023 for framing lumber was $413 per thousand board feet, down 67% from $1,244 per thousand board feet in Q-one of 2022. The average price for panels was $499 per thousand sq ft, down 60% year-over-year from $1,232 per thousand sq ft. Gross profit was $27 million, a decline of 75% year-over-year, also primarily resulting from lower commodity prices. Gross margin was 11.7% as compared to 20% in the prior year period, a quarter where we benefited from an environment of sharply rising commodity prices.
As of the end of the first quarter of 2023, lumber prices were up to around $417 per 1,000 board feet, panel prices increased to about $504 per 1,000 sq ft, a 12% and 7% increase, respectively, compared to the beginning of the year. These prices have improved in the first four weeks of the second quarter and are now $420 per 1,000 board feet and $530 per 1,000 sq ft. Our strong structural margin continues to reflect the excellent job our team does to manage commodity price volatility risk through leveraging consignment and utilizing centralized purchasing and pricing decisions to keep structural inventory levels low.
Through the first four weeks of Q2, structural products gross margin was in the range of 10%-11%, still higher than the 9% margin we would believe is normal, with daily sales volumes up slightly versus the first quarter. This excludes any net impact that could arise from inventory adjustments. We will continue to evaluate market pricing for wood-based commodities and adjust accordingly at the end of each period if necessary. For the first quarter, SG&A was $91 million and includes an additional $2 million of operating costs from Vandermeer, which were not included in the prior year period. We have been deliberate in our approach to managing costs to match current demand. As such, we have reduced our variable costs such as commissions, incentives, and third-party freight. Our headcount has also decreased since the beginning of the year, mainly through attrition.
These reductions were partially offset by inflationary impacts on some of our benefits costs. As we move forward, we will remain focused on right-sizing our cost structure to ensure future profitability. Net income was $18 million, and diluted EPS was $1.94 per share. On an adjusted basis, net income was $23 million and diluted EPS was $2.53 per share. The first quarter tax rate was 26.5%, in line with our expectations. For the second quarter of 2023, we anticipate our tax rate to be in the 21%-25% range. Adjusted EBITDA was $47 million or 5.9% of net sales, a strong result given the current market conditions. Now moving on to cash flow and working capital.
During the first quarter, we generated operating cash flow of $89 million and free cash flow of $80 million. Our first quarter cash generation was supported by a $75 million reduction in inventory, reflecting our focus around working capital management, particularly related to rightsizing our specialty inventory to reflect current market conditions. We ended the first quarter with $409 million of inventory, down 15% sequentially from the beginning of the year, and a reduction of $153 million year-over-year. We have also continued to invest. During the quarter, we spent approximately $9 million in capital expenditures, which were primarily for enhancements to our distribution branches and upgrades to our fleet of rolling stock. For the year, we still expect capital investments to remain around $30 million, focusing on facility improvements and further upgrades to our fleet.
Also, we intend to use the remaining $34 million we have under our $100 million authorization for share buybacks in the near term. As a reminder, our guiding principles for capital allocation remain consistent. We intend to maintain a strong balance sheet, which enables us to invest in our business through economic cycles while maintaining a long-term target net leverage of 3x or less. Looking now at our balance sheet, as of the end of the first quarter, cash on hand was $376 million, a record level. Total debt was $571 million, and net debt was $195 million, and we have no material debt maturities until 2029. Net leverage was 0.6x , consistent with where we were at the end of the year.
When considering our cash on hand and undrawn revolver capacity of $346 million, available liquidity was $723 million at the end of the first quarter, also a record. We have been deliberate in our approach to fortify our balance sheet. When combined with our strong EBITDA and cash generation, we have significantly improved our financial position to weather this more challenging cycle and support our strategic initiatives. This, in turn, enables us to expand our capital allocation prospects and invest in high return opportunities such as organic and inorganic growth investments and share repurchases. In the near term, we expect that volumes will continue to remain soft relative to last year and that pricing will remain under pressure. Our focus will continue to be on executing our strategy, maintaining a strong financial position and delivering long-term value to our shareholders.
Now I'll turn the call back over to Shyam for closing remarks.
Thanks, Kelly. In closing, our financial position remains strong with ample liquidity, no impending material debt maturities, and a low leverage profile. From a capital allocation standpoint, we will invest in profitable sales growth initiatives, pursue acquisition targets that support our growth strategy, make capital investments that strengthen our ability to grow the business, and opportunistically repurchase $34 million of shares remaining under our current share repurchase program in the near term. I am proud of our Q1 performance because it is testament to the hard work of our talented associates. I am appreciative of their tireless efforts to serve our customers and suppliers during challenging market conditions. Never a doubt, only a sincere desire to grow our business and help our customers succeed. I'd also like to thank our customers and suppliers for their support and faith in us. Without them, there is no BlueLinx.
I am excited about our future in continuing to deliver what matters so that we can be the leading building products distributor in the United States. That concludes our prepared remarks. At this time, we are happy to answer any questions.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Greg Palm with Craig-Hallum Capital Group. Please go ahead.
Yeah, thanks. This is Danny Eggerichs on for Greg today. I think.
Hey, Danny.
Appreciate the color. Hi. Appreciate the color, on some of the quarter to date volumes and things like that. I guess specifically in terms of specialty, any way to kind of break out what you're seeing there? I know, over the last couple of months on the last call, you noted, you know, EWP pressure and maybe more optimistic on repair and remodel, at least relative. I guess from now to then, any changes there or any other areas that you wanna highlight to be positive or negative?
Sure. you know, as I mentioned, we did have the EWP softness in the first quarter. We're continuing to seeing that, softer versus last year. However, we are seeing the uptick in the last four weeks related to EWP that is part of that improvement, as well as we're seeing a bit improvement in siding and specialty products. you know, across all those areas, you know, are really a bit stronger now than they were for the average for the first quarter.
Got it. Maybe touch on margins. Obviously, those held up really well, given, you know, the overall demand environment and where lumber is at. You know, 18%-19% specialty and 10%-11% for structural quarter to date. It seems like is that more of a baseline that we can, that we can think about? You know, it seems like, there's a certain level of stability even with You know, maybe some pricing, pressures and more of a mix pressure...
Mm-hmm
... especially with the EWP. I don't know, it seems like there's more upside than anything if things can start to pick up there. Is that how you're kind of thinking about it?
I really come back to that average range between that 18%-19% we feel very comfortable with as it relates to specialty. I was really pleased to see it on the high side for the 1st quarter, we're gonna continue to push and try to get as much margin as we can. I think that's really the range that we're still comfortable with. I'm hesitant to come off the 9% related to commodities quite yet. The team has been executing in a, you know, wonderfully around that. We did have some benefit from reversing some reserve for this quarter. If you take that out, we would've been closer to 10.5%.
I still feel like, you know, there's still some room and volatility going on in the commodity prices, and I don't wanna come off of that 9% until we see more stability.
I'd like to add and just highlight our pricing team and the work we're doing centrally in working with our local and national market leaders to maintain the pricing discipline and muscle we've developed over the last several years.
Yeah. Makes sense. Maybe just one last quick one for you, Shyam. More just broad-based thoughts on any areas that you may have identified as, you know, ripe for improvement and maybe just a little bit more on your priorities as we think about your overall strategic outlook and where you want to take BlueLinx.
Sure. No, that's a, that's a great question. Well, first of all, I just wanna reiterate that we're going to focus... The strategy remains unchanged. That means we're gonna focus on our 5 key specialty product categories to grow our existing and new business. Those include EWP, millwork, industrial, siding, and outdoor living. Those make sense for us because they touch both new housing starts, repair and remodel, industrials, and multifamily opportunities, all of which we view as growth opportunities. We'll continue to double down on our customer segmentation strategies, to better monetize the benefits of our scale and centralized pricing, product management, and operational excellence teams and capabilities. We'll also continue to focus on our operational pricing and procurement excellence, which continues to improve as we've been focused on that over the last several years.
That focus will drive greater productivity, efficiency, and cost containment, so we can truly optimize the benefits of our scale more effectively. Last but not least, we'll allocate capital to grow the business, do accretive M&A transactions, and ultimately, opportunistically repurchase shares.
Great. Thanks, everyone.
Thank you.
Our next question comes from Kurt Yinger with D.A. Davidson. Please go ahead.
Great. Thanks, and good morning, everyone.
Good morning.
Morning. It looked like specialty pricing, you know, flipped to a year-over-year headwind in the quarter. Could you maybe just unpack some of the different moving pieces there in terms of maybe some mix headwind from EWP, the impact from pressure treated and overall kind of pricing leverage or competitiveness in the market given the more challenging backdrop?
Sure. Happy to answer that question. First, we did see a bit of pricing pressure. We mentioned that in our remarks and in our deliverables. You know, overall, specialty pricing in the 10% range, a little somewhere in that, right around there, slightly less than 10% as a whole. The bigger impact was really the EWP volume change, you know, having that softness with EWP. EWP is one of our higher margin products, and that mix change was really the bigger driver as it relates to the margin impact. As I mentioned on the last question, we're starting to see some recovery around the volume for that, so that's good news, and we'll continue to watch that.
I still maintain that 18%-19% is a good range and, you know, if we see EWP recover, we'll hopefully see a little upside there.
Yeah. Just to add, you know, EWP is directly tied to new housing starts. As we continue to see new housing starts improve, as we're hearing from the builder community as reflected in the builder sentiment numbers, and even the percentage in new home starts as a percentage of sales, being relatively good in March and continuing in April, we expect to see EWP and other specialty product categories tied to new housing starts continue to increase. Just some early positive signs.
Right. Right. Yep, that makes sense and kinda dovetails in my next question. You mentioned kind of the sequential volume trends in specialty quarter to date. Is there any way to contextualize what that looks like on a year-over-year basis or just at least directionally, you know, whether it's consistent with or perhaps even a bit better than you saw in Q1?
Yeah. I mean, it's still certainly quite a bit softer than last year. I mean, you know, Q1, Q2 of last year were very strong quarters for us. I know, I think if you think about pricing in the range that I just spoke about as it relates to, it's relatively consistent, just slightly off. You'll kinda be able to back into the fact that, you know, we see a fairly significant drop-off of volume continue, and we mentioned that in a couple of our other In our press release and in our other remarks.
Got it. Do you think that's, you know, purely just new residential construction activity, or do you think there's perhaps some destocking going on with your customers in some of those key product categories? You know, new resi's down quite a bit, but it seems like R&R is holding in there. I guess I would have just thought that given the balance of your kind of end market exposure, maybe it could be a little bit better.
Yeah, I mean, certainly the new as Shyam just mentioned, the new residential, the single-family housing starts in the new residential is certainly the biggest impact. It's hard to tell completely where R&R stands. We think it was a little softer than flat in the first quarter, although, you know, there was factors in that. Frankly, seasonality. First quarters always are a seasonally impacted quarter. Time will tell with Q2 as we see kind of R&R develop as the year goes on. As a whole, I think the new residential impact is by far the biggest impact. I'll let Shyam answer any other points around that.
Yeah. Look, what I really appreciate about what we're doing is attacking the market in a balanced way by focusing on R&R, single-family housing starts, as well as, obviously multifamily and some other categories, which gives us a nice diversified approach to growing sales. Even though R&R will slow down in 2023 relative to its peak in 2022, the fact is there's still an under supply of homes, the necessary repair activity that's required, aged housing stock, high levels of homeowners equity, and continued telework, all of which support, you know, R&R. Although it's going to be down, we feel like it's still a strong market for us to continue to-
Yeah
to focus on.
Yeah. feel confident around R&R.
Great
for the remainder of the year. Mm-hmm.
Got it. Just two more for me. In terms of the inventory reduction and specialty versus Q4, I mean, how do you kind of balance the desire and actions to kind of keep working capital in check, with, you know, your overall role in the supply chain and the ability to provide high service levels to your customers?
Yeah. Well, you know, last year was a very unusual year in the fact that so much of our product was on allocation. Difficult to completely judge what was in the supply chain, what we needed, and the timing of when that would occur. In addition, you know, our sales were, you know, significant, as you know. Especially coming out of 2021. When you factor all those things in, it was a little working capital for specialty was not easy to manage through last year.
As we started seeing the market correct and return to a more normalized state in the end of the Q4 , we were very intentional around working with our teams to ensure we could do good demand forecast planning so that we could see what do we actually need going into this market. We took these specific steps to get that special inventory down to a reasonable level. We think we absolutely have, or had the ability to continue to service our customers and meet the demands of the market with where we are from an inventory perspective. In fact, we'll continue to work on working capital efficiency, as we go forward this year. I don't think we feel like we're done yet.
You know, I'm really happy with the way that it turned out for Q1, and we'll continue to push for working capital effectiveness.
Got it. Thanks for that, Kelly. Just last, I mean, could you comment on how you're thinking about kind of M&A in the current backdrop and whether that's something that's more or less attractive than maybe a couple of months ago and the overall opportunity set that you see out there?
Sure. I'll take that question. I mean, M&A is gonna continue to be a focus area for us as we think about the deployment of capital and supporting our sales growth strategies, geographic expansion, product expansion, et cetera, all of which ties into the specialty product growth and other commercial growth initiatives we have. We have a robust pipeline of acquisition targets, and we're absolutely committed to doing accretive deals that support those strategic growth objectives. We believe, given our financial condition, to be very opportunistic when those opportunities arise. We are very disciplined about making sure we pay the right price for these. Right now, the market's a little uncertain as to whether there'll be a meeting of the minds.
Given the approach we've taken, we feel like we will continue to pursue these opportunistic transactions and really more to come on that front. It will continue to be a focus area for us.
Got it. Okay. Well, appreciate the color and good luck here in Q2.
Our next question comes from Jeff Stevenson with Loop Capital Markets. Please go ahead.
Hi. Thanks for taking my questions today. I wanted to first ask on how volumes trended during the quarter in your core five specialty product categories, because you called out kind of challenged engineered wood product volumes, but wondered if any other categories are holding in better than anticipated to start out the year.
You know, thanks, Jeff. The volumes as a whole were, you know, all across the board certainly much softer than last year. We just call out EWP because it was disproportionately soft as related to the other categories. You know, I think if you look at kind of the year-over-year total, that gives you a pretty good feel for the overall decline. Given that with the pricing, as I mentioned earlier, you know, was relatively stable, was only down a little bit. I really feel like, you know, when the EWP, you know, starts coming back, we'll start seeing kind of the more relative declines to be more consistent across all of the product categories.
Got it. No, that's helpful. I know it's been touched on, but specialty product margins continue to hold above previous normalized levels of 18%-19% despite a slowing residential environment and negative mix from challenged EWP sales. I'm just wondering, Kelly, I know you mentioned there could be upside if EWP comes back, but do the first quarter results give you increased confidence that specialty margins are sustainable at current levels moving forward?
You know, the short story is, yes, as it relates to the range of that 18%-19% that I mentioned, at least for the foreseeable future. Every quarter we reevaluate that. Between, the pricing stability that we've seen, the positive signs we're seeing in the market, as well as, you know, our team executing extremely well from a cost perspective, feel confident around that range.
Okay, great. Shyam, I just wondered if you could provide a little more color on your capital allocation strategy moving forward and how you plan to prioritize areas such as M&A, internal growth investments, and your share repurchase program.
Yeah, sure. you know, I think, first of all, we are obviously committed to allocating capital to sales growth initiatives. It's important as it relates to the operations and anything we believe will enhance our sales growth, strategic priorities around the five specialty product categories I mentioned. Obviously, accretive M&A is really important, but making sure that we are finding the right opportunities that... and while taking into account the risks and opportunities of the deal, so that, you know, ultimately we're doing right by our shareholders, obviously. As far as the share repurchases, I mean, look, we believe share repurchases are an efficient and effective way to return capital to shareholders, especially when the cash flow characteristics of the business are strong.
You know, as I mean, I've only been in my role for a little more than four weeks, with the board and I quickly aligning around announcing that intent to repurchase $34 million in shares remaining under the current $100 million program. We'll continue to evaluate those opportunities as we move forward. First and foremost, at the end of the day, we wanna drive profitable sales growth and invest our dollars efficiently to achieve that objective, while growing the business in other ways as well.
Makes sense. Thank you.
Our next question comes from Reuben Garner with The Benchmark Company. Please go ahead.
Thank you. Good morning, everybody. Shyam, hope I'm pronouncing that correctly. Congrats on the new role. Look forward to working with you.
Thank you.
Maybe we can start on the structural side. I know there's been a lot of questions on specialty, and rightfully so, but I'm curious on the volume that you saw in the first quarter. Is there any reason why the volume is disconnecting with the EWP side so much? I know you guys didn't exactly chase business over the last couple of years, and maybe it's as simple as that the comps are easier there. Any color you could give would be great, and how to think about that going forward.
Yeah. Well, I think you hit the nail on the head related to, you know, we haven't been chasing it. You know, last year we actually towards the end of 2021, we really started, you know, reining that in, keeping our inventory low, mitigating risk around our commodity pricing, and managing the volumes as such as part of that. I think that's the primary reason is that we're continuing to drive that as a base business. In addition, I think we have more R&R activity going on in our structural business as well. I think, you know, it's, you know, it benefited from having a bit of a exposure to both markets more so than maybe we saw with the EWP in recent months.
Got it. My next question is on, it's a seasonality question. You kind of alluded to this, Kelly, but, do you think it's safe to say that from a revenue and I know we talked a lot about gross margin, but EBITDA margin standpoint, that we'll kind of return to maybe a more normal seasonality, you know, like what we saw prior to 2020. I think Q1 was typically the low water mark for the year for revenue and for EBITDA margin. Any reasons why that wouldn't be the case, this year or going forward?
You know, we haven't really gotten there yet. You know, even though we did see some of the seasonality that I mentioned as a whole, we're still going through that you know, kinda change in market dynamics as compared to what we were last year. It's hard to predict. I don't think I can give you an exact answer on that as when we would expect us to return to normalized seasonality. We'll just have to wait and monitor that. We'll start seeing that potentially over the next couple of quarters. We might be able to give a better view.
Okay, thanks. All my other questions were asked. Congrats on the results, and good luck the rest of this year, guys.
There are no further questions at this time. I would like to turn the floor back over to Alexandra Lucas for closing comments. Please go ahead, ma'am.
Thank you, operator. Thank you to everyone that joined us on the call today. We appreciate your engagement and your questions. Our team will be available to assist you should you have any questions. We look forward to speaking with you next quarter. That concludes our call. You may now disconnect.