Select Interior Concepts, Inc.

Q1 2021 net sales were $137.8 million, up $3.4 million or 2.5% year over year; adjusted for planned product exits, revenue increased 5%. RDS sales were $80.4 million, up 1% year over year or 4.3% adjusted for product exits; ASG sales were $57.8 million, up approximately 4% year over year or 6% adjusted for product exits. Q1 2021 adjusted EBITDA was $9.6 million, up $5 million or 111% versus Q1 2020. Operating cash flow was $5.7 million versus $7.8 million last year, liquidity was $79 million, net debt was approximately $153 million, and net debt to adjusted EBITDA was 3.4x. For 2021, management reaffirmed adjusted EBITDA guidance of $54 million to $58 million and said it expects $4 million to $5 million of structural savings.

Bill Varner said the quarter showed strong execution in both ASG and RDS, with the business performing to plan in an active homebuilding market. He highlighted several growth initiatives: expansion into Florida for ASG, builder sales outreach to larger and midsized production builders, and the Boise expansion for RDS. His tone was constructive and confident, but he acknowledged supply-chain disruptions, logistics tightness, and material inflation as ongoing industry challenges.

Nadeem Moiz focused on the numbers and said sales rose to $137.8 million, adjusted EBITDA reached $9.6 million, and both segments contributed meaningfully to the year-over-year EBITDA improvement. He attributed the gain to positive price mix in ASG, better volume and operating leverage in RDS, and about $1 million from operational cost savings initiatives. He also noted operating cash flow of $5.7 million, liquidity of $79 million, net debt of approximately $153 million, and reiterated the company’s plan to manage working capital and capital allocation judiciously while pursuing growth.

Analysts pressed management on whether RDS was starting to accelerate as home starts convert to completions, and Nadeem said April was very positive, with sequential growth in both segments and stronger comparisons ahead, including versus 2019 later in the year. Questions also focused on ASG’s price/mix versus volume, where management said volume should turn positive as new products, new colors, tile, and the builder program ramp. On margins and labor, management said gross margin could expand 200 to 300 basis points over the next couple of years, and that labor is challenging but they have been successful retaining crews and recruiting by going into local markets.