The Summit Podcast

Navigating Uncharted Waters: AWCI Suppliers and Distributors and COVID-19

April 16, 2020 HMG Season 2 Episode 7
The Summit Podcast
Navigating Uncharted Waters: AWCI Suppliers and Distributors and COVID-19
Chapters
The Summit Podcast
Navigating Uncharted Waters: AWCI Suppliers and Distributors and COVID-19
Apr 16, 2020 Season 2 Episode 7
HMG

Every new day is fluid due to the COVID-19 pandemic. Are your construction materials arriving on time, or have state and local protective orders caused delays? How are ordering and expediting critical materials changing to accommodate the current situation?

Many questions are being asked in these uncertain times, and AWCI along with Hamer Marketing Group is here to help provide answers. This podcast is a reproduction of the Webinar held on April 16, 2020.  You can watch the Webinar on AWCI's COVID 19 and Contractors webpage or on the Covid19 and Construction page at Hamer Marketing Group.

About AWCI
AWCI represents 2,200 companies and organizations in the acoustics systems, ceiling systems, drywall systems, exterior insulation, and finishing systems, fireproofing, flooring systems, insulation, and stucco contractors, suppliers and manufacturers and those in allied trades. Our mission is to provide services and undertake activities that enhance the members' ability to operate a successful business.

About Kyle Hamer
A sales and marketing veteran with a deep understanding of strategy, digital marketing execution, and using technology to enhance brand impact. A hands-on leader with a passion for solving business challenges with process, operations, and technology. When Kyle's not tinkering on businesses, you'll find him spending time with those he loves, learning about incredible people, and making connections.

About Hamer Marketing Group
Market growth for a new product or service is often limited by market distractions, unreliable data, or systems not built to scale.  Hamer Marketing Group helps companies build data-driven strategies focused on client acquisition and sales development supported by the technology and operations necessary to create profitable growth.



Support the show (https://www.buymeacoffee.com/summitpodcast)

Show Notes Transcript

Every new day is fluid due to the COVID-19 pandemic. Are your construction materials arriving on time, or have state and local protective orders caused delays? How are ordering and expediting critical materials changing to accommodate the current situation?

Many questions are being asked in these uncertain times, and AWCI along with Hamer Marketing Group is here to help provide answers. This podcast is a reproduction of the Webinar held on April 16, 2020.  You can watch the Webinar on AWCI's COVID 19 and Contractors webpage or on the Covid19 and Construction page at Hamer Marketing Group.

About AWCI
AWCI represents 2,200 companies and organizations in the acoustics systems, ceiling systems, drywall systems, exterior insulation, and finishing systems, fireproofing, flooring systems, insulation, and stucco contractors, suppliers and manufacturers and those in allied trades. Our mission is to provide services and undertake activities that enhance the members' ability to operate a successful business.

About Kyle Hamer
A sales and marketing veteran with a deep understanding of strategy, digital marketing execution, and using technology to enhance brand impact. A hands-on leader with a passion for solving business challenges with process, operations, and technology. When Kyle's not tinkering on businesses, you'll find him spending time with those he loves, learning about incredible people, and making connections.

About Hamer Marketing Group
Market growth for a new product or service is often limited by market distractions, unreliable data, or systems not built to scale.  Hamer Marketing Group helps companies build data-driven strategies focused on client acquisition and sales development supported by the technology and operations necessary to create profitable growth.



Support the show (https://www.buymeacoffee.com/summitpodcast)

Speaker 1:

The broadcast is now starting. All attendees are in listen only mode.

Speaker 2:

Good afternoon everyone and welcome to AWC I's convention and in Tech's expo reconstructed. Today's presentation is navigating uncharted waters. It'll be seen by suppliers and distributors in covert 19 my name is Chris Williams. AWC . I is director of membership and I'll be your host for today's presentation. Also teaming up with me will be Amarie Silva tele and also a nice all star lineup of AWI members . Speakers here that we'll get to in just a second. So on your screen you'll see our whole question. I would like to ask this at the beginning of every webinar. It helps us determine how many people are in our audience, so please answer and clicking on your screen now , how many people are viewing this webinar with you today. If you click on that selection, hit submit, we'll be able to tell you and get a better idea of our audience who to send out the recording to. Before we start, a few housekeeping items. All attendees should be on mute during today's presentation. However, safety first in our industry, we ask that you please mute your phones or your computer microphones as well to ensure that we keep the line clear for our presenters. If you have any questions at any time during today's broadcast, please submit it using the question box and your GoToMeeting dashboard and we'll have a brief Q and a at the end of our presentation and also interspersed during the presentation, the Q and a and we'll make every attempt to get to all of your questions today. Our moderators today are myself and Kyle hammer , Kyle's the president of Haimer marketing group and is passionate about helping business leverage technology and data to grow their businesses, no stranger to the technology or the association. He previously held executive leadership positions with software technology and service companies. With that, I'd like to turn it over to Kyle to introduce today's panelists. Kyle,

Speaker 1:

Chris, thanks for having me. You know, we're very excited to have our member panelists today. Andy Calloway, Jerry reeks , and Rob Waterhouse. Many of you know Andy is the director of merchandising forL and w supply. He's been in the industry for over 15 years and i s an active memory of member of several industry associations. He lives in Glen Ellyn, Illinois with his wife and two kids and though he normally likes to travel, run and watch sports these days. He's working on his social distancing skills. J erry started Jarkko in 1975 after graduating with a BS from Briar cliff university. He's an active A WC AI and Sioux city chamber of commerce member. He recently retired from officiating f reestyling G roman r eco wrestling. I didn't know that. I'm going to have to talk to t hem about it after this session. U h, this took him from 12 different trips overseas and t wo different 1220 different where he officiated for USA world team trials. And after 44 years, Jerry went back to school last month and f inished his m aster's degree in business management. You all recognize a k now Rob as the president and CEO for grabber construction parts. He has been o ur grabber construction products. Excuse me, I want to get that. Get that right. Rob. U h, h e's a 34 year career in construction product manufacturing and distribution with USG,L and w. and now grabber for 25 years. Rob has been an active member of AW C AI a nd it s f oundation.

Speaker 3:

Okay ,

Speaker 2:

thanks Kyle. Uh, with our presentation today , uh, as a Q and a based with our three esteemed panelists here, and we'll kick this off here. The first question , uh , directed to each of you gentlemen , uh, we'll start with Rob and then go to Jerry and then Andy for their answers. How is your company managing this situation? Is this your first , uh , crisis or have you had to lead through the recession of Oh eight, Oh nine, the great recession , uh , nine 11 other downturns, things like that. And what were you able to take from those prior experiences and apply to this current situation, if anything, being how different it is? Rob, we'll kick it off with you.

Speaker 4:

Thanks, Chris. I appreciate you having me. Pleased to represent , uh , grabber and , uh, speak on behalf of a lot of friends in the industry. We've established five priorities for managing through this virus situation. First, the health of our employees and their families. Second, clarity communication. Third, serving our customers. Fourth, alignment with our a supply partners and fifth, preserving our strengths for better days ahead. This is my fifth recession in my career. Third, as an executive. So a few things that , uh, we're doing. Uh, things that I've learned over time. First of all, set clear priorities and stick with them and make decisions within that set of priorities. And I walked through the five that we have a NEC establish a level of calm and confidence. Um, you know, the, this is the, this is the fairly scary time. There's some fear involved in, in all of this. Uh, you know, similar to right after nine 11, there was a level of a fear, rational fear in fact. And so , uh , calm and confidence helps give people something stable that they can hang on to. Any source of stability is good right now. Uh, and uh, I found that reacting to patterns of facts or is really important during turbulent times because there's going to be one offs. They're going to, you're going to hear a lot of rumor and innuendo and there's going to be something happening in some parts of the country, but , uh , patterns of fact I think are really helpful in . And the last thing I'll mention on this question is , uh, you know, look at your overhead and know how the money you spend is valued by your customers. And the way I've , I've done it over time was if it's not valued by your customer or that spending is not keeping you out of the ditch, meeting compliance with rules, regulations, laws, and so forth. If it's not valued by your customer or it's not about compliance and maybe you don't spend that money. And so those would be the things that I've learned that we're applying now. Okay .

Speaker 2:

Thanks Rob. Jerry, your thoughts [inaudible]

Speaker 5:

for us , uh, managing the situation. Good morning, West coast and good afternoon to the rest of you first. This is a first time for me , uh, as a panelist. So bear with me for the most part. We here in the Midwest in Iowa are doing good. I'm, we're actually on the border of Iowa, Nebraska and South Dakota. Um, just crossed three or two different rivers. So we have no shelter in place orders. And all of those three States have no shelter in place orders. So , uh, we're fairly open for business as usual. Most of our , uh, all of our , uh, eating establishments and , and that is closed. Um, and all of our , uh , uh, retirement people, anybody I can't see over a 65 cause that's me, but , uh, uh, our in our stay in home. So , uh, that's, that's changed the outlook here , uh, for a lot of different people. Um, for us, we're keeping the office traffic to a minimum. Uh, we've had a run on masks , uh , hand soap and toilet paper as usual. Everybody has. Um, for me, I've been in business for 46 years, so I have seen that a lot. But obviously nothing like this. Um, crisis is , I do remember 16% interest rates as , as many of you do. And I do recall recent years, we were way too far in our credit line. So the eight years after the housing crash were devastating to our bottom line, that's for sure. Including a couple of years that were lost when , uh , that was over. We had a lot of vintage equipment. Uh , that's for sure that we were patching together. I think in those eight years we , uh , bought two brand new vehicles and in the last three we've bought a new boom truck and, and eight new vehicles. So , um, and with the a ability now for us , uh, uh, where we're at, those , uh , were depreciated , uh, that same year we were able to , that we bought them. So that was an initial shot in the arm that , uh, all of us received. Um, the last three years had been very good and we did not take any cash out of the company. And that's probably the most important thing I learned. Life lessons of course have always taught me and my father passed it on to me is that , uh , to stay in business, you have to have three ingredients. One of them is the best banker and the other, the best accountant they ended up. And lastly, the best lawyer and keep them all on a speed dial. Um , so far this time in this crisis, we haven't had to use , uh , the lawyer, that's for sure. So back to you

Speaker 1:

extra and Andy.

Speaker 5:

Thanks Chris. And um , this is my first step. Panelists . Mmm . Uh , I'm on a panel here with the AWC , so thanks for having me. And , uh , glad to be here. Mmm . LNW has been around for almost 50 years, so this is definitely not our first crisis. Uh, we've got , uh , um, a nationwide footprint and an experienced leadership team that's seen a lot. We , you know, we were , um, a lot of us here during the great recession, you know, many folks , uh , during nine, 11. And , um, and through the ups and downs that our industry's seen over, over a long cycle. This is the first pandemic we've all been through, I think. Um, so that's, it makes it very different. And so I think , uh , this is the situation we're in right now is really unique. And so , um, there are some things we can apply and some things you probably can't apply from our prior experience. I think the things , uh , we can apply our , our lot , uh, in my mind a lot what like Rob said , um , now we're taking confidence that we're going to get through this. You know, we've seen some pretty tough times. Um, certainly the great recession, you know, that, you know, with, with [inaudible] our business dropping by by nearly half, you know , that was, those were tough times and , um, well we take competence that we got through that and, and we're going to get through this. Mmm no , for us, you know, listening to our people and to our customers and continuing to work to solve problems like we do every day is, is a key foundation for us on how we're going in , get through that. Know we want to keep an eye on what's right in front of us here. You know , uh , the, you know, there's certainly uncertainty and immediately in front of us. And how do we manage through that. And we're also keeping, you know, one eye down the road too. So we need to plan for both the short and the long term as we try to figure out what's coming. Certainly the longer term is a mid to long term is uncertain as is even the short term. But we're trying to keep one eye on both so we can manage effectively and, and look to come out of this stronger.

Speaker 1:

Jerry does Kylie, you know, I , um, by the way, thanks guys for , for sharing your perspective and advice. One of the things I'm really interested in about , uh, Jerry and Andy is, and Jerry, you specifically, you just talked about how all the States that you're in don't have a stay at home order. Are you seeing a disruption to job sites? Um, are there any closures? Are you having trouble getting products , um, delivering orders?

Speaker 5:

Um, right now , um, we are, we're in good shape. Uh , all of the construction sites , uh, are open , uh , here in, in , in probably the 90 mile radius. Uh, Sioux falls is changed a little bit. Uh, they , uh, they've had a recent outbreak , um , so they're starting to close a few things up there. But here in Sioux city and around the Suitland area , um, all the construction is , uh , is business as usual and, and there's, there is a lot of construction here. We've, we've been blessed.

Speaker 2:

That's great. Andy, what do you, what do you guys announce at WC and with orders that can be delivered? Or are you not running into any restrictions yet?

Speaker 5:

Uh , as a nationwide distributor, we're certainly seeing probably a bit of everything. Um, you know, we're, we're , uh , um, we're in markets that are some of the most restrictive and uh , and we're in some of the markets that, that are, are not seeing as many restrictions. So, you know, I think that, yeah , you know, the situation for us, if you think about it, is , is not all that different than every day . And in some ways it's so different. Right. And the way it's not different is we run into challenges on job sites every day . And , and a lot of that's just about communicating with our customers. And I think we just need to be more proactive about that communication now or are as proactive as ever, maybe is a better way to say it. And so , um, certainly the, the situation, you know , can change now unlike what we would normally see with a , with a governor's order , um , overnight. And we have seen that. And , um , and so we've reacted, we've been very proactive with customers to talk to them about what's going on on their job sites . [inaudible] trying to avoid, you know, going out to a job site where we're work isn't happening. So really taking us , um , you know, communicating a lot with customers, but that's what we do every day . So. Mmm . So really in some ways, again, it's , it's not that different. Um , just, just the circumstances around it are widely different.

Speaker 2:

It is. Chris , I have a quick question follow up question to that. You talked about, you know , being as proactive as you guys have been from communication standpoint. Have you had to tailor communications at the regional yard level or is there been status quo in terms of frequency, communication? What the messages,

Speaker 5:

we've certainly had to change some things. Um, you know, a lot of [inaudible] our industry, you know, loves to be face to face. We love to be, we love to be face to face with our customers. And so we've had to change some of that people , uh, you know, walking into branches and being at our counters, no , we can't do like that. Like we used to. Uh , but you know, our customer is over time. Have you used the technology that's available to them there ? You know, they call us, email us, text us w , you know, and they reach out to us in many ways. And , and so we're just using those more as, as, as it pertains to to customers. And you know , when , when it comes to the, to day on jobs,

Speaker 4:

a lot of that's done on the phone or via text or, or email or what have you. So , so that's pretty normal and pretty natural. Um, and again, the bank , I think that's probably changing is, you know, the face to face and the branch activity.

Speaker 2:

[inaudible] Rob, this next question, sir , are you a , how is Granberg experiencing any capacity issues? And by that I mean , um, any, any issues do you do, let's say increased orders from parts of the country that are still somewhat business as usual or uh , even decreased orders, different parts of the country, placing orders that you would normally expect and supplies? Uh, things like driver shortages or just your shipping that shortages or raw material shortages, things like that. And if so, how are you resolving them?

Speaker 4:

We don't really have any Oh , shortages of anything right now. Think back a year ago. Oh , okay . Almost every company in our industry couldn't get enough of something and usually it was skilled labor and my wooden , we'd like to have those problems and we'll get those problems back someday. Uh, the, the only product that we're not able to source at the volumes that we would like are our masks. And um , you know, that's, that's natural because the healthcare industry is , uh , very much in need of, of the mass that are available. So we're sourcing maps where we can, but we're not going to get into an auction, a minute format because we would end up bidding against the healthcare industry and we simply refused , uh , to do that. That's where they're needed most . Um, otherwise we're in really good shape in terms of , uh , R R product supply, the availability of skilled labor and so forth.

Speaker 2:

Thanks, Rob . Quick follow up question before we go onto our next question for you. Um , you mentioned that the industry is a whole year ago, we were scrambling for, for most raw materials and it's, you know, we look back and the demand at that point probably was the primary driver along some , uh, some, some other economic issues. Do you think that the fact that there isn't as much of a scramble now when a month or two ago we were projecting material shortages on the manufacturing side, is that due to a decrease in demand, do you think? Just, just,

Speaker 4:

yeah ,

Speaker 2:

out there?

Speaker 4:

Well, there's, there's absolutely a decrease in demand. And , uh , you know, I think we all started to feel it about a month ago and , uh, you know, the , uh , the demand differences Andy referenced , there are certainly some regional differences in terms of the demand dropped , but there's no doubt demands is down everywhere and no matter where you live , uh, people are aware of the virus and are concerned about it. And so , um, and you know, that has some natural impact on , uh , demand right now and demand going forward because , uh , the path of this virus, the path towards some resolution, the path towards a new normal is just not well understood. Anybody who thinks they know what that path looks like , uh , it's really not telling you the truth. It's just not absolutely clear. And I personally have an awful lot of respect for the governors out there because they're , uh, having to make that a balanced choice between lives and livelihoods. And , um, those are, those are tough choices. So I have a lot of respect for the decisions they're making and every decision they make has some impact on demand. And it's really our role to respond to that. Uh, rather than to complain about it.

Speaker 1:

Hmm . All right. Our next questions for you, Rob. What protocols? Grep again , grabbers got a number of locations throughout the country, a regional personnel. What protocols have you instituted to protect your employees?

Speaker 4:

We've had a number of policies in place for , uh , about a month. It's a fight . Look back at the dates . It's probably closer to five weeks. So, you know, regular hand-washing , um , uh, you know, a sanitary products, you know, hand sanitizer and wipes available, covering costs, social distancing. Uh, all of our 24 facilities have 'em thermometers now. Uh , no touch the monitors, we're taking everybody's temperature when they arrive . Uh , first thing in the morning. And if you've got a temperature over a certain level, we send you home. Just one more way we can keep our employee safety is priority one. And , uh , we were also keeping all visitors out of our facilities and uh, you know, we normally would certainly be happy to have visitors, but we want to make sure that the only people that walk into a grabber facility right now are those grab employees. And , uh , they know our policies and procedures and they're following them. We've got a number of people working from home because they can and we're certainly keeping them off the road and you know, there's no airplane travel, no hotel stays. And uh, we're just , uh , doing everything we can to keep our team intact and keep our employees safe.

Speaker 1:

Thanks Rob. Kyle, back to you. Yeah , yeah. Jerry. Andy. Um , man, it, Jerry, it sounds to me like at least based on the way you, you shared things earlier that there hasn't been really a , a large interruption, but it does sound like forL and w i n what you're experiencing, Andy, i t's, it's very regionalized and pocketed. So when we look at job sites, having to stagger, start times for different t rades, u m, to, to help, you know, manage things around social distancing and some of the different requirements, how is that affecting delivery schedules? Or is it really not having an impact on it at all? Because demand is n ow,

Speaker 4:

I'll go first. I think for us , um ,

Speaker 5:

delivery is always have been coordinated. So if a buck oysters involved, we scan that's already prescheduled, at least the baby hair , uh, before, if a multi stories , most of them only leave you one window per floor and the , uh , hotels that we have going. So that's always the coordination to superin with the superintendent. We know ahead of time , uh, where the access is and how we will , uh, Oh , we will get it there. Um, so it really hasn't changed for us. Um, in most instance instances

Speaker 6:

maybe. What about you and LNW and some of your, your markets there are more interrupted.

Speaker 5:

Yeah, I , I certainly, we've, we've had to , um, okay . Prepare for things. Uh , and maybe, maybe some different things like, like greater restrictions on job sites. You alluded to staggered start times. There's some jobs where we're seeing , um , a limitation on the number of trades and we're considered a trade, so, Mmm . But to Jerry's point, you know , uh , we schedule and we plan with our customers every day. You know, we're scheduling, you know , where they need the material, when they need it. And , uh , those things are dynamic in a normal cycle. So I think that w we're used to that. Again, it's a different reason why things are changing and the magnitude and, and kind of restrictions are, are , um , in some cases, okay . More than we're used to, but, but we're managing it. And I think , um , certainly it probably helps that in those places where the restrictions are the greatest. Mmm . You know, businesses , um, you know, there's, there's probably less , uh, you know , going on , um, you know, there , there may be more likely , uh , another job shutdown so we can be a little more coordinated. But , um, but the reality is we're used to this every day. And so I think that we're comfortable managing it are our branch managers and supervisors are our experienced that handled it , handling this, working with our customers, and we know how to do that with them really well.

Speaker 6:

So it sounds like for the most part, the , the procedures and policies in an operating business for you and, and , and Jerry , at least the way that you've set up things, the impact has been minimal based on additional regulations because you're already really good at handling curve balls. On a, on a daily basis. Does that sound a fair summary of what's going on for both of you?

Speaker 5:

For me, yes . That's the case. The only procedures that we've changed our face masks on all our commercial jobs , uh , job deliveries, that's, that's mandatory. Uh, the residential, we , we give them a little bit more leeway cause most of the time there's only , uh , one or two people in that , uh, a house delivery and I'm talking new residential net , uh, not remodel. Um, and they're not required there. But that's really the only procedural change we've had. Yeah. I would say for us, you know, there's less, there's no, no real formal procedural change when it comes to yeah, the bulk of the job sites. It's, you know, we'd have to react to the demands of the job site and we're reacting to different demands of the job site and , and , um, and so we're adapting to that for us. Um, at the branch, as I mentioned earlier, you know, we for temporary for now, like Rob mentioned, I'm on the grabber side, they're doing, you know, we're, we're closing our showrooms to only our employees so folks can pick up material at our branches. They just can't come in our show room . And so probably the [inaudible] the impact we've had is on, on that pickup business. You know, folks like to come in and talk to us at the counter as I mentioned earlier. And um , you know , we have good relationship with them. We're just having to do that in a, you know , outside the branch loading their truck or the are their equipment, their material on their , on their equipment , um, without that face to face interaction. But that's , and that's the greatest impact we're having.

Speaker 1:

Thanks for that. Rob. Next question for you here. Like you mentioned just a minute ago that it doesn't appear that a lot of the supply chain has been disrupted other than masks. Most materials are available and, and you have what you need in order to complete a project. Are you seeing that that's varied state to state or is that Countrywide? It's still wide open.

Speaker 5:

Oh, we're not really seeing any supply issues. Oh, state the state or, or region to region. Um, know we haven't had any , uh , Oh, manufacturing facility shutdown . And so , uh , we really have no supply issues other than , uh, the math . Obviously we're , you know , keep track of this really closely on a regular basis. Um, but we don't anticipate any issues right now.

Speaker 2:

Thanks Rob. Jerry and Andy, a move on here to youth. The next question, generally speaking, have you encountered any disruptions in products , supplies from manufacturers, and if so, how have you worked through them? Jerry, we'll start with you.

Speaker 5:

Well , for us , uh , we have increased our inventory significantly. Um, last week , uh, we received information that USG was shuttering , uh , uh, a few plants , um , for deep cleaning and , uh, that got us concerned. So we increased our inventory , uh , more. Uh, we built a new warehouse , uh, two years ago and I mean, that's kind of the new normal anymore when, when you have price increases, announced a 30%, you're on January 3rd. Um, you, you, you do buy a head a little bit more. Um, but it's the been normal and having lived through allocations in the past years , um, uh, we, we keep a bigger , uh , supply, a larger supply of installation , a larger supply of drywall and acoustical here,

Speaker 2:

Andy that was on w

Speaker 5:

um, you know, I just started a , uh , [inaudible] come to the forefront more and more in February and March. We took a proactive approach to make sure we had a product on hand. Like Jerry said. Uh, we wanted to be, you know , proactive that material in case there was an issue. We haven't really seen it. You know , there have been challenges as I mentioned, we cover the country. So as, as a governor has put in a , uh , shelter in place order and restricted business to essential work only. And there was some early, I call it a confusion as the what classified as essential work. And manufacturers might've had to push to get approval. Um, you know, there were some temporary delays. Uh , thankfully they were temporary. Are our partners talk to us regularly? We , we , we always have good communication. And I would say we've heightened that communication at this time. And , um, they've been really great about letting us know the specific specifics of their situations and how they're working through them, the progress of them. And it's allowed us to be, you know, proactive and handling that and haven't had any problems , uh , when it comes to the market. So there may have been a a day where they had to stop operating to get clarity and they got it and they were back up and running and supplying us. And in the meantime, that inventory we had helped us. But that's really most of what we've seen. And , um, and , and thankfully for all of us, you know, I think as it's come through most of the work, certainly the work we do on the distribution level has been deemed [inaudible] essential. Um , a lot of our customers' work has been deemed essential and in of Ottoman and water markets. And then our partners on the manufacturing side have gotten that , uh , as well. So we've, we've continued to operate [inaudible] . We're taking the approach of making sure we have what we need and I'm taking care of our customers cause that's a big priority for us. Um, you know, along with the safety of our people and, and make sure we get through this

Speaker 2:

and for both Jerry and Andy , I have a followup question but I'm going to reword it a little bit just because of both of your answers. In terms of talking about kind of stockpiling product early on a few months ago when having the foresight to see that this could potentially be an issue, do you think that at some point there's going to be a cost impact of having that surplus of material since we talk about demand is still there but it hasn't, the supply is keeping pace with it right now. Is there a potential , um, and then this is generally speaking, no trade secrets or anything that, any costs impact that might've come about when demand picks up again is going to be mitigated by the fact that you've got that supply on hand? Or is there going to be a situation where there may be an oversupply at some point down the road?

Speaker 5:

I don't foresee an oversupply. Um, uh, right now , uh, all the drywall is , uh, you know, a phone call is, is going to get you a truck. The availability of both drywall, full steel and , and insulation and acoustical material, that's that right now I'm , they're 100% full of goals, so we haven't seen that a discontinuation of, of a operation for any of them, but tomorrow could be an entirely different thing. And I think that's life has taught both Andy and myself that , uh, um, to , uh, be prepared for that I, nobody has announced pricing increases , um, that I'm aware of , uh, in the near future. And if they are, I would, I would think a lot of them would be rescinded. Um, historically speaking, I guess. So , um, coming out of , uh, out of this, I , I think, I know material will be available and , uh, in the short term , uh, and I'm not sure what the long term brings for us. Yeah. So, yeah, I think , um , you know, I'm not going to speculate on anything, you know, [inaudible] input costs , I suppose. But for us, certainly carrying inventory has a cost. Um , we do that to service our customers and we do it every day. You know, certainly , uh , w we may scale it up or, or got back down as we feel appropriate. Mmm . You know , we'll, we'll make decisions regularly to do things that we could do less expensively yeah . To service our customers and, and , uh, and that's really okay . Some of what we're having to juggle now, Mmm . As , Mmm . No , we have [inaudible] different job sites, situations and different branch and state restrictions. You know, we may need to, as a nationwide distributor service from a branch that's less ideal from a cost perspective because there's a little further away. But we do that , uh , to service the customer. And so we'll make those decisions. That's [inaudible] part of the value we bring our customers, frankly. And so, Mmm . You know, we, you know , we've , we manage the costs in our business and, you know, yeah . Um , we try to keep them as low as we absolutely possibly can. But , uh, you know, certainly we , there are times where we have to take some incremental costs to do right by her, by our customers.

Speaker 6:

Thanks guys. Kyle , back to you. But this is where it gets fun for me cause we're talking about stuff that they , that really gets me excited. Um, you know, Jerry, Andy, you guys have commented on the shift that you've done in person, in the fields, in your , in your, you know, your houses or your , um , your showrooms versus your floors in person ordering a lot of shifts. But really when we see things like COBIT 19 and viruses like this hit, it forces people to work from home or speed up their digital transformation. What changes , uh, Andy, what changes have you guys had to make specifically the yard level to keep up

Speaker 5:

for us? Um , well we've, we've, we've had to, again, as I alluded to earlier, I mentioned earlier, we've had to deal with the fact that folks can't come into our showroom. Um , but we, again, we were used to that. Uh , the large majority of our business doesn't come in through the showroom every day. So yeah . Mmm . We have a process and a procedure to handle that. Uh , we can, we can manage invoicing our customers and all that because many of our customers use [inaudible] all sorts of digital means that from the [inaudible] most sophisticated to the least sophisticated , uh, you know, [inaudible] we serve as them the way they want to be serviced , whether that's a phone call or a fax machine , uh, or , uh , a text , uh , an email. Right. So, so we're , we're ready to do that. Mmm . The shift has been, you know, we've had, we've had, again, to move away from the face to face at the counter transaction, but otherwise , um , we're ready. We're ready to serve as customers. Um , as we normally do. [inaudible] you know, I , I think that it hasn't, with that , with that one exception, it hasn't changed things dramatically for us. We haven't, you know, are a lot of our customers. Um, our , you know, the, not the, not the folks on job sites but maybe estimated hours or, or office personnel are having to work from home and a , and a lot of our , Mmm . Uh , you know , our office staff, I'm not at the branch but, but um , and our national sports center, I have had to make different arrangements to, as Rob mentioned, we're not traveling where we're not getting out to places we would normally get to and we're doing a little more virtually to communicate across our network with , uh , things like zoom meetings and uh , and other technology to stay connected internally. Yeah . But as it pertains to our customers, it's not been a huge shift in how we interact with customers.

Speaker 6:

There hasn't been a Barisan been a disruption in the ability to order because you don't have people in the physical locations to enter orders as they come in through like a mainframe network you haven't had to work through. Is it in the cloud or a local intranet? The systems were already there.

Speaker 5:

Yeah. For us, they were already there in place. Again, we handle a lot of different types of transactions today from a lot of different customers. And so we're ready to [inaudible] [inaudible] take care of things, you know. Mmm [inaudible] we can handle people paying their bills online and hang them. Um, other ways too . And we've got, you know, we've [inaudible] we've made adjustments if people need to go in to get checks, you know, to a physical location and they're not necessarily going into an office though. They're going into that exception to go take care of those types of things. And then immediately going back to a safer spot.

Speaker 6:

Jerry, a little bit different spin on the same question. Given that it seems to be work as usual for you in the , uh , the Sioux city area, if, if things were to change dynamically in the work work from home order became , um , mandated there for you guys locally, what sort of impact would that have on your day to day operations and what sort of changes would you guys need to make in order to accommodate?

Speaker 5:

For us. I , I don't foresee that happening. But if that's the case and, and , uh, construction is not, is deemed a non obsessional, non essential, then we would have , um , big problems , um , that would pretty well close the doors and we'd shut her up for a while . But getting back to Andy's question that he had regarding digital transformation , uh, last month our sister company, tri-state drywall began using labor chart and as this coal bed , uh , 19, it became evidence that the pandemic Jarkko joining that bandwagon. So our delivery men now aren't coming into the office. Um, the delivery site is text texted to them. Any special request is put in that text , um, and they can touch the screen and Google maps will take them right to the front door. And so that's one digital transformation that I wanted to share with you.

Speaker 6:

That was going to be my followup question , so thanks for taking us right through to that. Um , so just , uh, just to reiterate, we haven't really seen an impact in ordering or processor ability to deliver for , um, people being stuck at home for either of you. Is that correct?

Speaker 5:

For me, our front door's still open in our sales floors , still open. Um, normally one or two customers is at a time is , is, is our norm. So social distancing guidelines are met. We've seen an increase in both the store customers and , and phone traffic. I think people just wanting to get out of the house and , um, they've been pent up too long. Uh , we also offer a service , uh, the people of hand measuring houses , um, new houses, so those darn drywall hangers don't , uh, don't gouge that poor guy. So, or that floor owner . So we continue that service , um , still going out and , and uh, writing on the walls is exactly what it should take , uh , to hang that house. Well , we haven't you the followup Jerry's comment, we really just haven't seen a whole lot difference. We, we were, Mmm . We have a lot of capabilities in the digital area before that we're utilizing, but okay . Again, we're adapting and working with whatever technology our customers are used to and , and , and a lot of the way we do business was set up well to handle this.

Speaker 4:

Mmm . So we're, we're in a good spot there .

Speaker 2:

Great. Chris. Thanks Kyle . I'm going to go old school a little bit with a question we've got from one of our audience members. Uh , how much, and this is for all three of you, how much impact is social distancing having a meeting , managing the six foot rule? How much does it having on your employees? Uh , both have the yards. Uh, and in the office itself, if you guys still have office open,

Speaker 5:

this is Jerry and I'll take that first. I think that it has had very little impact, but it is a concern for every, every, all of our employees. They're way more aware of the situation they're in and , and , uh, and what's gonna keep them safe and not, so we just automatically, I think that social distincts Vince distancing has happened for us.

Speaker 4:

[inaudible]

Speaker 2:

Danny and Rob.

Speaker 4:

Yeah, I'll go next. I think it's had an impact for sure. There's a lot of our day to day and normal day to day that happens within six feet. Um, or maybe maybe that historically we just wouldn't have thought about. Mmm . So, as Jerry mentioned, our people are far more aware. I would say we haven't had the you well police are people. We're not, we don't take that approach. Mmm . They've been pretty good about , um, managing their own , um, space. I think a lot of people are very concerned about this. And so , uh, so we've, you know, and , and we've , we've helped them adapt. As I mentioned, we've closed our showrooms temporarily, which give them a little bit easier , um, situation to manage. And then we've, we've created the right space and in our environment , uh , so people can follow those guidelines. I would say that there are two answers. The first is that our facilities, and , uh, I think the first week or so , uh , and we've had a social social distancing policies in place for over a month. The first week or so was probably , uh , you know, why do we need to do this? And then people started to see what was happening in the news and they understood and were appreciative and , uh, adjusted. So whether that's a new normal, how long we have to be in this situation, I don't know. So that's the first part. The second part is first Salesforce. This is hard. Salespeople are meant to be out and with customers and making things happen and they can't do that right now. So, you know, they, they do phone calls and emails and we're doing a lot of training of our sales force cause we've got an opportunity to , uh, talk about products and product skills and so forth. It's hard. Salespeople are built to be out and they can't do that right now. So that's probably the biggest complexity we have. And social distancing.

Speaker 2:

Yeah. I was going to ask Robin this , is this the end of the handshake?

Speaker 4:

Well , uh , you know, for awhile , I mean, you know, humans are built for 'em , uh, you know, to connect with each other and um, be , be close and uh, shake hands and give hugs. And so, you know, that's , uh , that's human nature. So I, you know, I hope we , uh , aren't in this phase permanently. I don't think we are. But , um, uh, you know, handshakes are the normal everywhere on the globe. So maybe we'll have a new tradition.

Speaker 2:

And Rob, we'll stick with you here. This next question. How are you working with your employees to help them in handling and dealing with coven ? 19 pandemic?

Speaker 4:

Yeah, a lot of uh , clear , uh , concise communications. Um, you know, no requirements, things that just aren't electives, again, designed to keep our people healthy. And so we post a lot of things inside the branches in addition to emails and everybody's got a manager. So we make sure that we get all that one-on-one conversation and I think that's the, the next thing, just being available to talk and answer questions. You know, there's some rational fear out there. And so , uh, just being able to talk and walk people through situations, the next thing I say is just , uh, double check to make sure that your message is properly understood. Turbulent times can cause a misinterpretation that you don't intend . And so, you know, you do something with great intention, but it's understood a different way. Sometimes you've got to clarify it , make sure that it's handled and understood properly. And of course, you know, every , I probably said this four times, it just staying focused on the priorities, making decisions within those priorities, that level of calm and , and consistent and stable our employees. Uh , so far I've reacted really most of that.

Speaker 2:

And my next question, Rob , uh, specifically for you clients, but we're assuming the loose potentially the significant amounts of revenue in the short term here with the spans AMEC and that'll inevitably impact their projects for later this year, early next year. Is the assumption, what are your thoughts about this potentially becoming a sustained economic decline? And on the flip side of that, how will you prepare? How will grab them prepare for the eventual rebound that we know is going to come?

Speaker 4:

Yeah, they're a big question. Um, you know, we're, we're in the first phase of this , uh , this whole thing right now. Every company is, every nation is really the first phase of the world dealing with the life consequences of the virus and business down right now. I think we can all , um , recognize that , um, uh, and, and it's gonna stay down for a period of time. I have no doubt that this is going to create a recession. Oh , I think it's going to be more like the recession that followed nine 11 than like the great recession. Uh , maybe somewhere in between. The fact is nobody knows. The second phase though I think is going to be , uh, upon us pretty quickly. And that's, you know, what are the new realities for construction regarding PPE , uh , social distancing, which we talked about sequencing trades on the job site , um, the realities of inspectors coming onto job sites and, you know, does that elongate the construction cycle? And , um, you know, how do the economics of getting buildings built work with, with these new realities ? So I think that's a phase we'll start getting into in the next couple of months. And there are probably some contractors that already you're starting to answer some of those things. And then the third phase is the recessionary impacts to construction. We certainly expect a few quarters of a decreased opportunity. And I think the timeline of whatever the recession impact looks like just totally depends on how long it takes to get control over this virus. And , uh, none of us know. And then the fourth phase is , uh, you know, a return to normal or a new normal. And we haven't even started thinking about 20, 21 yet. We're, we're all eyes on right now, this corridor and the managing the business through the end of 2020.

Speaker 6:

I think I speak for many of us when I say that it feels like we're already on 2021, but we're just in April, so of 20, 20. So thanks Rob. Kyle, I'll turn it over to you. Yeah . And I'll, I'll , uh, I'll close it out before we get to the Q and a for the um , uh , from the, from the audience, like we've just talked about a lot of the short term realities, the things that are consequences of, of what we're going through related to the virus and what our short term realities are, you know, for , for the group. And we'll start with Andy, do you have any longterm thoughts that you'd like to share with us? Share with the audience?

Speaker 4:

Yeah. So I started with 'em , you know, some of the things we learned in the past and competences , it's a big part of how we're going through this content that we're going to come out and the other side, and I didn't comment that we're going to learn things. You know, if you look back to the great recession or prior, you know, we , we've learned a lot and adapted after each, each one of these a challenging times and the ideas that we learned . Um, some of them are short term things that we may put in a playbook or Mmm . And hopefully don't need to use again, unfortunately. Maybe we will here . Um , yeah . There's also some things that we take away that , uh, become great ideas that we should put into practice every day . And so we're seeing some of that happen already.

Speaker 5:

Um , you know , things that we're learning in terms of how we're , uh , operating efficiencies we're finding in, in a , in a difficult situation. So I , aye . You know, in turn , in addition to optimism that we're going to get through this and be in a better spot down the road. Mmm . From an economy standpoint , uh, you know, there's optimism that we're going to , we're going to learn and grow and, and we're all going to bring this experience to make our individual businesses better down the road. And , um , that's something that, Mmm . It gives me excitement and enthusiasm to [inaudible] to charge through this. Mmm . And get to the other side.

Speaker 6:

Thanks for sharing that. Jerry. What do you think?

Speaker 5:

Well, for me on longterm thoughts, I think the election is going to be significant. Uh, uh, and, and how that plays out is going to , um, show the path that construction is going to going to take. I think in the future near future at least. Uh , the PPP funds have been , uh , some of them have been released that , but I heard that , uh, they ran out of money. So those that got their PPP funds , uh, um , are , are able to keep their people busy in , in where we're at. And we were hiring to begin with. Um, uh, they'll keep us employed in , in the two and a half months when they're paid back. I think , uh, um, the banks will have some of their , uh, loans retired , uh , that we have on our, on our equipment, which is going to be good for us. Um, and uh, probably there'll be used to pay , uh, additional taxes for , uh, um, for our , uh , you know, our bottom line, I think the stark stock market and where it's at right now. Um, if it continues to , uh , um , stay where it's at , uh, we're going to be in good shape for retirement funds and everything. If it doesn't , uh, if it , uh, continues a decline , uh , everyone's going to have a problem. Housing market just was announced that the houses are, are going down real, real fast. Uh , the market is drying up for them and I can see that happening in the short term. Uh , commercial's going to stay okay for us, I think , uh , four year in year and a half. And , but if this continues, commercial's going to get affected also. Um , so plan, plan for the worst and hope for the best.

Speaker 6:

Can you say that, Rob, you want to , uh , we want to close this out with your thoughts on, you know, what , uh , what , what should we think about long term ?

Speaker 5:

Yeah. Uh, let me first.

Speaker 4:

Okay. The whole thing's happening almost full employment , uh , optimism for the rest of the year and beyond. And now we , we get thrown a major curve ball, major curve ball. This is a health induced issue. W our economy, we'll return to a very healthy state. It just absolutely will. It always does. The Americans are built as the toughest stuff possible. And so we'll get back, we've got to solve this crisis, but we'll get back and , um, uh, we have before and if the journey is not going to be easy on this one because there's just an awful lot of uncertainty about what happens next. But I don't think any of us should have any doubt in terms of, Oh , our nation or our company or our skills , uh, as individuals or our skills , uh, as you know, team members in our companies . Um, we're built the top stuff. We're going to get through this. And I think it's really important as whatever we're doing right now, managing, leading our families through this, leading our companies through this just every once in a while to imagine yourself five years from now and just reflect back on what you were able to do to get your family, your company, your coworkers through this. And just, just having that type of five-year perspective I think just helps create , um , a little bit of calmness, a little bit of confidence, a little bit of stability to , to drive us through this thing. So , uh , I'm , uh, I'm very optimistic , uh, and longterm, very bullish and , uh, I'm , uh, keep it as healthy a perspective as I can and sharing that with everybody that I can. And I'm pleased to share it with this group today. Thank you

Speaker 2:

gentlemen. Thank you. And we have a few questions here from our audience members. I want to get to a quickly and I'll start with a what's easily the hardest question to ask. Um, and , and those that are submitted, and I'll, I'll frame this from a general perspective. Do you foresee any layoffs moving forward? Not from a company standpoint, but from an industry standpoint or what are your views on that?

Speaker 5:

This is Jerry . I'll go first. Um, I think for us it's going to depend on what the housing market does. If a , this is a short term because a lot of, a lot of our residential drives sooner or later drives our commercial. So in the, in the , uh, I do not foresee a layoff right now, layoffs right now, but that potential is really out there for us. And I think the, the PPP funds , um , have pretty well insured , at least our company that there won't be any layoffs for the next and a half months. So. Gotcha. I guess I'll , I guess I'll go next.

Speaker 2:

Mmm .

Speaker 5:

Speaking maybe broadly. I think, you know , I think a lot of folks in our industry

Speaker 2:

[inaudible]

Speaker 5:

always looking two manage supply and demand and , um, and so I think a lot of it's going to come down to what happens to the economy and , uh , and how that reacts. So , uh, you know, and I don't want , I don't think anybody desires that outcome. Uh , but , uh, w we need to, when you made the right, make the right business decisions and , um , and so know I think [inaudible] everyone in the industry will , we'll take a look at that , uh , their own way and , and approach it. Um, you know, each their own way. And certainly , um, you know, [inaudible] at L a nd w R our approach is that we're an associate first company. And when you run into situations like, y ou k now, w hen, when times are good, it's e asy to say that. A nd w hen, when times are challenging are you l ifting? And so our intent is to, to live it to the best we can. This is Rob. Oh, we're doing everything we can.

Speaker 2:

Yeah.

Speaker 5:

To avoid layoffs. We haven't even had a conversation about layoffs and so there are a lot of things we can do between now and having to even have that conversation. Um, and so , um , right now we're focused on those five priorities and the health of our employees is, is number one. No , we're going to keep, we're going to keep it that way.

Speaker 2:

Thanks guys. Uh , next question here. Uh, do any of you foresee your respective companies reducing your footprint? Uh, for example, number of branches at the local level , uh, in favor of larger, more regional based distribution centers moving forward. Andy , we'll start with you. Put you on the spot there.

Speaker 5:

Yeah. This feels, this feels maybe like for me , uh , I'll say every one of our branches remains open today. And , uh, you know, certainly

Speaker 2:

[inaudible]

Speaker 5:

you know, that may be a, and that, that just shows, I guess where our mind is at. Um, you know, we [inaudible] , um, we haven't scaled back in and even the most restrictive States , um, are we, we feel it's important to be close to our customers. We deliver heavy things. [inaudible] delivering them a long way is not particularly efficient, so, Mmm . Yeah . That , that's Mmm . Yup . That's kind of our approach at this point.

Speaker 2:

Hmm .

Speaker 5:

Yeah, for sure. 24. Go ahead, Jerry. I'm sorry, Rob . Nope. Um , for all drywall supply companies , uh, you know, in the United States there's always been , uh , the competition between the box stores , um, to stay viable, we've had , uh , to, to ,

Speaker 4:

uh ,

Speaker 5:

get smarter and do better things and offer more. Uh, so we're already have in, I think all of us have in place , uh, a plan to, to stay where we're at and , and , uh, um , continue to flourish.

Speaker 4:

Oh, we have 24 facilities in North America and , um , we don't have any plans to change that.

Speaker 2:

[inaudible] . Next question here. Uh, how do you expect to deal with vendors at the yard level? And Andy, I believe that I'll gear that one towards you.

Speaker 4:

Sure. Uh , I guess, you know, my first answer is really not all that differently. We certainly made practice social distancing , um , manage it inbound deliveries. Mmm . You know , I , I, I think maybe one thought we have to be careful about, one thing we were having to be careful about is, is anything direct to a job site because of [inaudible] , because things can be dynamic. So , um , I think we're having to watch that a little bit more than normal because something could change from yesterday to today, but overall, Mmm , yeah . Vendors are coming into our yard . They always have. Um , and [inaudible] they're their companies and , um, yeah , they're there . They're there , they're social distancing. You know, I think Rob alluded to it. Uh , yeah . As we've gone through this, people have become just [inaudible] increasingly aware and , uh , I think that we're seeing them practice the practices as they come into our yard .

Speaker 2:

Gentlemen, I've got one last question. It's a perfect question to wrap things up. Any recommendations or requests of your customers? In other words, what do you wish people would do to make things better, easier, safer as we navigate these uncharted waters? Rob, we'll start with you.

Speaker 4:

Well, I'm gonna go back to something I said. Um, you know, we , we expect there to be a recession, not a long one, but a recession that comes out of this virus situation. And I think that , uh , every company needs to look at the money they spend, not necessarily the people they have on their payroll, but the money they spend and say, do my customers value those things? And they can always that overhead , uh, uh, something my customers are willing to pay for. And that , that would be my piece of advice , uh , to customers other than, again, every once in a while , just step back and think about that five-year perspective.

Speaker 2:

Thanks, Rob. Jerry ?

Speaker 5:

Well, for us, I think , uh, the use of the phone is, has increased a lot to , to stay in , uh, you know, our , our is our customers. So I find myself calling a few of them , uh, more often than not because, you know, the days of being able to take them to lunch , uh, have gone away. So the phone is, is, is really essential now and more so than , uh, than it has been in the past. That that's the belief I have.

Speaker 2:

Andy, we'll wrap up with you. Yeah. So I think for, for me

Speaker 5:

and for us, you know, I think about what I look for from our suppliers and , and from our customers. And I think that a lot of it's about communication and especially in the short term, you know, we want to be talking about jobs that are going,

Speaker 2:

Mmm .

Speaker 5:

Things that may be coming,

Speaker 2:

ah ,

Speaker 5:

things that may be delayed in the near term. So as, as much as ever,

Speaker 2:

yeah .

Speaker 5:

Communication that we have with our customers is critical. So, and we need to have it

Speaker 2:

with [inaudible] ,

Speaker 5:

with our suppliers where we're their customer. And so I think I'm making sure that we're talking openly about what's happening. We're taking a very honest and proactive approach. It's no different than what we always do.

Speaker 2:

Mmm .

Speaker 5:

You know , because frankly, it's , it's just the best means of doing business to talk truthfully about what we see and , uh, and then asking our customers do the same so that we can, we can really be effective to manage their business down the road.

Speaker 2:

And we're having great

Speaker 5:

open discussions like, like usual, but in an unchartered times where we frankly, I don't think any of us know the answer. Um, and so , um , we'll keep doing that and, and we're appreciative of of those customers of ours that, that are just giving us everything they know and telling us what they know so that we can, we can serve their business well and Hey , take care of our people and take care of them and our

Speaker 2:

and our vendor partners. Gentlemen , thank you. On behalf of uh , AWC and myself , uh, again, want to extend my thanks to Andy, Jerry Robin , Kyle for taking out time out of their schedules today to walk us through , uh, this coven 19 pandemic from the supplier distributor perspective. I also want to thank you for joining our attendees for joining us for today's ATV CIS convention in Tex expo reconstructed webinar. As a reminder, this program was recorded and you'll receive a link to [inaudible] online program library following the conclusion of today's broadcast. Be on the lookout for our weekly Friday recap email tomorrow with details of upcoming convention in text expo, reconstructed events through may eight everyone, thanks again a stay well and stay safe out there. We appreciate it. Thank you.