Coffee Conversations LIVE from FRSA 2023! - PODCAST TRANSCRIPTION

Editor's note: The following is the transcript of a live interview with Keenan Perry of SRS Distribution, Mike Sheehan of Suncoast Roofing Supply, Sara Jones of ICP Group, Kyle Nurminen of Total Roofing Systems and John Kenney of Cotney Consulting Group. You can read the interview below, listen to the episode or watch the webinar.

Heidi J. Ellsworth: Hello and welcome back. Welcome to Live Coffee Conversations on the SRS Live Stage here at FRSA. We are so excited. This is our coffee conversations with our very distinguished panel here today. I'm Heidi Ellsworth. We're going to be talking about what's happening in Florida overall, all the good, in-between, maybe we'll have a few little conversations since this is coffee conversations about what all is happening. This is being recorded. It's live on YouTube. It'll also be on RoofersCoffeeShop, CoatingsCoffeeShop, and MetalCoffeeShop for the next week or so. If you have questions or you want to chat on YouTube, please feel free. Megan Ellsworth, our producer, is back there chatting back and forth. My distinguished panel, I'm very excited about this coffee conversation. What I'd like to do is we're going to start out with some introductions, so we're going to go around to everyone. Keenan, let's start with you, if you can introduce yourself, tell us a little bit what you do with SRS.

Keenan Perry: Yeah, so my name is Keenan Perry. I'm the field marketing manager for SRS Distribution, all things marketing events, trade shows. You may have seen our extreme tailgating vehicle around, which you can find on RoofersCoffeeShop.

Heidi J. Ellsworth: Yes.

Keenan Perry: Yeah, so I'm excited to be here.

Heidi J. Ellsworth: Yeah, we have the whole map. It shows everywhere you're at. You don't have a whole lot of privacy here at XTV. We all know where it's going.

Keenan Perry: No. We'll find the map and go enjoy a beverage on us at the XTV.

Heidi J. Ellsworth: I love it. Mike with Sun Coast, SRS, please introduce yourself.

Mike Sheehan: Yeah. My name's Mike Sheehan. I'm also a Sun Coast [inaudible 00:01:51]. I run our West Palm Beach branch. I've been with the company about five years, came in through our MIT program straight out of college, and had the luxury of chasing a couple storms, opened our Panama City location up north, and been in West Palm for about the past three years now.

Heidi J. Ellsworth: That's great. Wow. Right out of MIT.

Mike Sheehan: Yeah, no, it's definitely been a learning experience.

Heidi J. Ellsworth: I was going to say. What a great company to be with. That is awesome. Sara?

Sara Jonas: Well, hey. Hi.

Heidi J. Ellsworth: Hey.

Sara Jonas: I'm Sara Jonas. I'm the Vice President of Marketing for ICP Group. We have brand, APOC, in this space, and really excited to be here today.

Heidi J. Ellsworth: So great. You and I were on earlier with our big announcements about CoatingsCoffeeShop.

Sara Jonas: Yes. Very exciting. We've been spending a lot of time sharing videos, sharing tidbits about CoatingsCoffeeShop. Even had an RCMA call earlier today, got to talk about it there, so very excited about the launch of that platform.

Heidi J. Ellsworth: That's great. Yeah, it's live. Go to their coatingscofeeshop.com. Kyle, please introduce yourself.

Kyle Nurminen: I'm Kyle Nurminen. I'm with Total Roofing Systems out of Stewart, Florida. I've been in the commercial roofing industry, a little bit in residential as well, over the past 20 years. Like Mike here, I came straight out of college, finished my business degree with the HR director, the fifth-largest roofing contractor in the nation at the time. I came up in the back to back hurricanes down here in Florida in the early 2000s. That's how I really broken in. Because of that, my area of expertise is portfolio management, proactive maintenance, and large long-term investment planning, so the coatings really come into it. I just actually had a three-year hiatus in specifically coatings and now I'm focusing specifically on metal at this time of my career.

Heidi J. Ellsworth: Yeah. Well, we met Kyle through MetalCoffee through DuPont, which was awesome, but you're also in the art club, you are on all of our coffee conversations, so we are just thrilled to have Kyle out here. A lot of them.

Kyle Nurminen: Always learning. You're a wonderful resource.

Heidi J. Ellsworth: Yeah, it's so fun.

Kyle Nurminen: I got to put that out there for you.

Heidi J. Ellsworth: I love it when I see all your names and I'm like, "Yeah, so good." Speaking of someone who's on almost everything, John, please introduce yourself.

John Kenney: Sure. I'm John Kenney, CEO of Cotney Consulting Group. I spent 45 years as a roofing contractor in the industry, and 22 or so here in Florida. Currently, what I do is I work with business and operations and educational training with roofing contractors.

Heidi J. Ellsworth: I love it. Let me just kind of set the stage here just a little bit. We have distribution, we have manufacturing, we have contracting, and we have consulting, and pretty much John's done everything. We are going to be talking about some issues that are going on, not issues, but just what's happening in Florida, and so we wanted to get all these different perspectives, which I love. Let's start. We're going to actually start with the FRSA show because here we are and it's huge. I mean it really is the biggest I've ever seen, I really think. Keenan, I'd love to start with you. How's the show going and what do you think?

Keenan Perry: So far, it's just been fantastic. We go to these trade shows as often as we can, specifically the FRSA. This is maybe one of the best turnouts of a trade show that I've seen in the past couple of years, especially after the hiatus of COVID, and so I'm glad to see the trade shows are full back in swing, and we've had a full booth all day, so yeah, we're happy.

Heidi J. Ellsworth: It's really good. Well, SRS is our sponsor of the sound stage here, so thank you so much.

Keenan Perry: Of course.

Heidi J. Ellsworth: We are right here in the rotunda, in the lobby, and we've had so many people going by. It's been fantastic. With the launch of CoatingsCoffeeShop, we have all this cool swag and stuff, so Sara, how's it going on the show floor 509? I know that.

Sara Jonas: It's good, Yeah.

Heidi J. Ellsworth: What do you see?

Sara Jonas: It's been really, really busy in there. The booth's been full the whole morning. I assume it's full right now as well. There's a lot of traffic. I was actually talking to one of my colleagues about the first time I was at FRSA because it was probably 20 years ago, and it was a tiny ballroom with just tables set up kind of all around. This is so different. It's very big, very active, which is really exciting, and the swag is going.

Heidi J. Ellsworth: Yeah, the swag is going. Good. We'll get you restocked.

Sara Jonas: Okay.

Heidi J. Ellsworth: Yeah, so if you're watching this and you're here, there's some great backpacks in on ChapStick. Yeah, ChapStick. Coat your lips. Kyle, from a contractor standpoint, have you been able to walk the show so far?

Kyle Nurminen: Briefly, yeah. I just got here not too long ago, but I was here last year with our sister company, with Dynamic Metals while they were here. I'll just tell you what, my career has been a plethora for working every side of every fence, and I'm always learning. This is an opportunity for me to reconnect with other distributors and their options because we're always diversifying, we're always changing, we're always relying on consultants, we're also trying to advise consultants on what we're doing that's new, and this is just a plethora of skilled trades knowledge. Nobody's perfect and everybody learns from everybody else here, and that's what I really love about it. It's really open form.

Heidi J. Ellsworth: It is so good. My first FRSA show was 1994, believe it or not. When was yours, John?

John Kenney: '99.

Heidi J. Ellsworth: '99? Okay. I thought it was pretty close. What do you think? Doesn't this look like the biggest ever?

John Kenney: Yeah, it is. It continues to grow each and every year, which is amazing when you think about it. I am seeing a lot of new faces here this year, which I really enjoy seeing that because that means we're getting more and more of the industry involved. Yesterday, I did an education class, education seminar, and estimating, it was full with standing room only. All the education classes I've seen have been that way. Just to give a plug, if you're still here tomorrow, I'm doing a repeat at 7:00 AM. Come up and say hello. I'd love to meet you.

Heidi J. Ellsworth: Yeah, please. The classes are so good. If you're not here at FRSA, but you still want to get some education from John, check out RoofersCoffeeShop because John is on there. Okay, let's talk Florida. There has been a lot going on in Florida. Florida's kind of been the talk of the country. Usually, I always say between Florida and California, everything starts and hits in the middle at some point, but Florida really has seen the weather, the legislation, just everything going on. I want to start, and maybe, Mike, start with you on what... We did this last year, and a lot has happened in the last year. What are some of the things that you're seeing over the last year that's really been changing in Florida?

Mike Sheehan: Obviously, the hurricane is going to change the market for us, especially down in South Florida. It's created a whirlwind of business for everybody. Obviously, pointing back to the immigration, that's become an issue. I believe it went into effect July 1st, so there's some headwinds on the horizon there, so to speak. In terms of labor, maintaining labor crews are getting harder and harder to come by, but for the most part, hopefully, we can come out of it on top. I don't see it slowing down business per se yet, but again, it just went into effect. I just don't see how that plays out.

Heidi J. Ellsworth: Yeah, business has been pretty fast and furious, right?

Mike Sheehan: Yeah, no, for the past couple of years, it seems like it's just been a roller coaster, but between price increases, everything, labor in itself for a long time was an issue just trying to find drivers, loaders, CDL drivers. We're on a shortage there for a while. From the distribution standpoint, it definitely got a little bit crazy, but it all moves so quick and you get through it. Ultimately, we've seen some relief on that side in terms of our labor. It's more the contractor's labor that, I think, is going to take a little bit of a hit here, so to speak, next couple months.

Heidi J. Ellsworth: Yeah. Wow. Well, Sara, with ICP and APOC, we had the honor of being at your plant and trading center on Monday. You are very meshed in the Florida market, or the company is overall, and APOC. What are some of the things that you all are seeing? I mean you do both residential and commercial.

Sara Jonas: We do. All the same things that you just said, we're seeing an impact. Obviously, there's been a labor shortage. At 10% to 15% more onto that, we're seeing an impact of mad hurricanes are always impactful either because we had a big hurricane and then the next year we have you know so it flows, but I think overall, what we're seeing is everyone is treading very cautiously. There are a lot of unknowns, and while we're all very optimistic, things have been going well, everyone's being very cautious, so that's kind of what we're seeing.

Heidi J. Ellsworth: Yeah. I think we hear some of that same thing. Just a cautious optimism.

Sara Jonas: Yes, exactly.

Heidi J. Ellsworth: Very much. Kyle, we kind of got to know each other and started doing things together last year. What's happened? What have you been seeing this past year?

Kyle Nurminen: Well, I'm a salesman, so cautiousness scares me. Where people see caution, I see an opportunity. The only thing, if you've ever read the book From Good to Great, you understand that the best thing that contractors and everybody can be doing right now is focused on what they're best at. Yes, you can be cautious as far as dabbling in something you may not have done any before because there's plenty of knowledge and expertise across the industry. I've been focusing more on networking with those suppliers that have certain supplies, the coatings for certain applications, and I just say that's what I use. In that case, I use this contractor for this application that I don't do, so I'm diversifying what I'm capable of doing because I'm relying on those relationships, and then those relationships come back to me and what I'm good at. I've been really aggressive with that.

Being conservative and cautious is one thing, but you still have to be really aggressive in what you're good at so you can get ahead of the slow times that are coming, so that's where we're really focused. We took on the name the metal of experts in 2018, and now we have a real strong focus on the commercial side and corrosive environments, so that's where we got involved with the Tedlar. We're now approved by FiberTite, so this is our area of expertise and this is what we focus on. Everything else, it's a rat race, yes, and they should be cautious trying to be everything for everybody. I don't think that's what people need to be doing right now. You rely on this guy to direct those people into what area of expertise and who's best in what they do.

Heidi J. Ellsworth: Yeah, exactly. John, what have you been seeing? You talked to contractors all over the state, all over the country.

John Kenney: Well, definitely in Florida, two biggest issues now are immigration change. No one's really sure of the total impact, but it just doesn't affect roofing and construction. It affects the farm, the agriculture, the tourist industry. The pool of labor is short to begin with, and now it's even tighter than it was, and we're all competing for the same general area of it. We'll see where that works at.

Heidi J. Ellsworth: Maybe just since we're going across the country or actually across the globe right now, you never know who's watching this, just explain just really quick, what did change July 1st with immigration?

John Kenney: What took effect on July 1st is a couple of things. If you're a roofing contractor and have 25 or more employees, which is not Houston field, this is total in your company, you are required to e-verify through the federal system to prove that you are of legal status. That is brand new. Even the federal government doesn't require that to that extent. The other part of that is if you have to prove that your sub crew, if you're using it, the fault also goes back onto the contractor that they are legal, so you've got that tying in. Then you have your sub crews that if someone is illegal on there and they're driven to a job site and they're found to be illegal, it affects the driver even if the driver is perfectly 100% legal citizen.

The fines are different depending on what you do, but in a nutshell, it really affects the business owner at the end because you can lose your license first time for 30-day penalty where you can't operate, then it goes to 60, and then after your third time, you can lose your license on a permanent basis. The fines are nowhere near as great of the fact that you're restricted at the end of business because honestly, I know people are listening out there and saying, "Well, just don't hire illegals," it's a lot harder than just don't hire illegals. These are people who have been embedded in our society for decades. Maybe they were when it came over, work visas might run out. Whatever the problem or reason is, you've now taken the burden and really shifted it 100% to the legal license contractor in the state. That's bottom line.

Heidi J. Ellsworth: Or the agricultural owner or the [inaudible 00:15:01] owner.

John Kenney: All of them. It goes on your business license. If you're listed from another state, not everyone requires licenses as tight as Florida, but Florida, it's a test. You have a license, it's like gold. If you lose that, you may never get it back.

Heidi J. Ellsworth: Yeah, I know how important the Florida license is, and the FRSA does a great job at helping contractors get licensed, so you don't have to-

John Kenney: Absolutely. I think if I jump on the other one a little bit here, the insurance, right? It's really affecting the coatings industry big time. I get calls on this all the time. I'm also on the board of FRSA and I sit on the coats committee, and I hear about the change that are going. What's actually happening around the state started out with mainly combos and stuff where they would not ensure the owner if they put a coating system over top of an existing roof. Well, now it's expanding out into commercial facilities because, like it or not, insurance companies do not want to pay for roofs. They want to limit their risk. With the recent, I'm going to say debacle in the state of their registration for insurance reform, it got worse instead of better.

What's happening is when I was doing some research and tracking it back, how they're managing to get around this and not have it is when you go to usually most Florida product approvals or NOAs for coating, it says maintenance system on it, not roof system, and you look at them and that's how they're holding their hat. Now, if they get beyond that, what they're holding it on is, "Well, we don't know how well the roof you're covering. Is it here? What kind of deck? Did you do the test?" Not the adhesion from the coating to the system. The actual adhesion of the underside. It's so difficult that the building owners put their hands up at that point and say, "I don't want to be involved in this" so this is not going to get better, it's going to get worse because it's just beginning. A lot of things are affecting homeowners with the insurance. I by myself live in Florida. My homeowner's insurance has doubled in the last year.

Heidi J. Ellsworth: Everybody did. Yeah.

John Kenney: If I was to make a wild projection for our folks out there, I would say, what's going to happen to reform this? Roofs are going to be excluded and they're going to have to have a separate policy to get roofs covered upon storm damage replacement.

Kyle Nurminen: I've seen that on the community side, on my side of things because I deal with community associations a lot, and that's what they're doing. There's separately financing their roof insurance. We're taking that out of their policy. The number of companies that are allowing that, that's the next question, your next phase, but that's what a lot of communities were being forced to do because I've been on 10 year roofs, historic buildings that whereas it was a 10-year modified bitumen roof, they have an excellent silicone restoration on it. It's like you'll never have to re-roof that again. You just maintain the coating. They won't even sell the building. The buyer cannot get insured unless he replaces it.

Heidi J. Ellsworth: Really?

Kyle Nurminen: Now, you're going to have to get into all these historical details of the parapet walls that are all finally concealed, and it was done proactively and it was done correctly, and they make them re-roof it, and that's going to cause more problems than anything, so yeah, that's an ongoing battle.

Heidi J. Ellsworth: Really when you look at things, Florida is leading the insurance. It's kind of like the epicenter of insurance, figuring out what's going on with roofs, and it's not always doing good. You're nodding a lot, Sara. What are you seeing on the commercial side and with coatings like John was talking about?

Sara Jonas: Yeah, it's having an impact for sure where insurance companies are involved. Not all coating projects or restoration projects are [inaudible 00:18:32] so we're seeing it pockets today. Unfortunately, I can say today we'll see what happens.

Heidi J. Ellsworth: Yeah, as it comes through. I want to go back for just a minute to immigration because you talked to a lot of contractors, you guys are right in there. What are you seeing with this new immigration law started early in July and how it's going to affect our market?

Mike Sheehan: Again, I can really only speak to South Florida. That's my primary market. It does seem to be the trend across Florida is it appears that the commercial guys are taking a little bit more of a hit on this one. I again talked to some residential guys. A lot of those crews that they do have are permanent crews and have been there a long time and usually are fully legal at that point anyway, but the commercial crews, and especially for South Route, I'm in Palm Beach County, so it's a little bit better, but definitely as you go further south into Broward and [inaudible 00:19:25], which are again large commercial silicon income coating markets, it's becoming an issue on the labor side within [inaudible 00:19:34].

Heidi J. Ellsworth: Any experience of what you're hearing from contractors on them dealing with insurance?

Mike Sheehan: I don't deal as much on the insurance side with the contractors. I know it's an uphill battle to your point. I mean it's constantly ever-changing and it seems like every year, a new idea, a new policy or something comes out. It's a struggle for everybody. Pretty much I don't know anybody who's really navigating it well or saying, "Oh, I'm super stoked about the insurance situation in Florida." It's a headache for homeowners, it's for contractors, ultimately for distributors because if it's tendering work and not allowing jobs to start, then it's a problem for all of us.

Heidi J. Ellsworth: Yeah. Well, one of the things I've been just hearing a little bit about, and I don't know if I'm going to bring this question out of the... It wasn't on our sheet, let me just say that, but I am hearing that there are times that we're hearing insurance companies are basically saying, "These are the contractors you should use." Are you seeing too much of that where they're kind of mandating who, what contractors you use or not?

Kyle Nurminen: Wow, I better think about that one.

Heidi J. Ellsworth: I know.

Kyle Nurminen: I can't say I agree with that. I'm a little bit frustrated even in the building industry alone, let alone the insurance industry, that some specifications now are being written and based on the lower level systems, the more affordable roof systems, and so they're not taking into account the advantages of spending a little bit more to do things right. That seems to be, sorry, but it's a lot on the manufacturer side of leading those specifications, but it's teaching me to learn how to work with manufacturers and with consultants, and fully educating the customer first. Believe it or not, when it does come to insurance, the property owner does start to have some rights. I think our governor's starting to back that up after this last hurricane coming through. That's why I say business is good for us because the only roofs left standing were the metal.

It's really good for us. We understand that there are some talk in the industry of phasing into mostly predominantly getting rid of shingle and going in the metal. Now, it's a lot of rumor mill right now, so I don't want to comment on that too much beyond that, but those are the types of diversity and things we're always talking about. I think it's important that we all work together to find a solution, and that involves insurance companies. There are some people out there that are trying to drive a specification for their own greed, and that's kind of why we're in a situation we're in, so conferences like this are huge and this type of conversation is what we need to continue having.

Heidi J. Ellsworth: We want everybody to win. At the end of the day, everybody along the challenge, most likely, and mostly the consumer, should win, but also the insurance companies. I mean there's no reason not to work together.

Kyle Nurminen: Well, that's what frustrates me. I talk in front of boards all the time and talk about their level of liability for making these discussions and saying, yeah, this manufacturer is covered under their warranty, but who ends up being left holding the bill? It's the homeowner, the property owner. I've been seeing it for 20 years and I'm tired of it. This is why I'm so proactive in keeping this communication going. Bridging the gaps between the silos is what we need to keep doing.

Heidi J. Ellsworth: Yeah, it's so true. What are your folks in the field seeing, Sara, when it comes to the contractors and just... I've seen what you're doing and I've seen the trainings that Johnny Walker's doing, and that seems to be a big part of what you're offering to make sure things are done right.

Sara Jonas: Yeah, that's our focus is all in training. We do have the certified applicator program. We focus a lot and we do a lot of education including on RoofersCoffeeShop on when a restoration is a possibility and when it should not be because there are a lot of roofs where you should not be trying to restore that, you should not be putting a coating on that. At the end of the day, we want a quality system, we want a quality roof, we want the property owner to be happy with what we've done there, and we want it to succeed, so it's just as important to educate on when not to do something as it is when and how to do it properly so we focus a lot on training.

Heidi J. Ellsworth: Yeah. I think that's so important. Well, I want to kind of move on a little bit to where we're at with the economy and what we've been seeing with inflation, interest rates, all those kinds of things, but before I do, I just want to make sure we cover everything on the immigration part of it.

John Kenney: Yeah, I can tag one thing on the insurance. When they just did the recent insurance reform bill took effect six, eight months ago now, one of the good things that did come out of it is they separated completely contractors from adjusters where licenses were, so if there is an adjuster insurance company using favoritism towards roofers, it is illegal now in the state of Florida to do that.

Heidi J. Ellsworth: Wow. Okay.

John Kenney: That's just only I want to tag in. A lot of people don't know that's out there, but it is the same way as a roofing contractor can no longer legally represent a homeowner with the insurance, bypass the homeowner to go directly to the insurance company, so it goes both ways now. That was one of the good things that came out of the reform.

Heidi J. Ellsworth: The protection on both things. On a national level, what are you seeing right now across the country with interest rates, inflation? How are contractors dealing with that and what are you seeing?

Keenan Perry: Sure. From a national standpoint, I think we just saw that inflation rates are starting to come back down a bit, which I think is going to help everyone, but I think Florida's sort of in its own little silo where it's still pretty high. That could be market driven, so again, I can't speak to Florida, but from the supply side, we've been busier than ever. We really can't say anything more about what's going on right now on a national scale.

Heidi J. Ellsworth: Okay. What about in Florida? What do you see?

Mike Sheehan: Anywhere on a coastal city like West Palm Beach, Fort Lauderdale, Miami, all the way up to Jacksonville, Tampa, Clearwater area, the inflation aspect definitely still feels real there. The cost of living in Florida is high, but overall, the inflation rates, they just come out... I think the new report came out three or four days ago. There's kind of that bells curve where it's probably going to take a while to get to Florida in terms of the insurance or the inflation affecting us in coming down, but definitely at this point, it helps contractors, cost, and material. Obviously, lower inflation is the direction we want to have with this. Overall, the Florida, it's like I said, economy's just been booming what feels like the past four or five years I've been in this industry and selling in Florida, so I'd say we're pretty fortunate to be here in this state.

Heidi J. Ellsworth: One of the things that I've been hearing a lot in this last year was as the interest rates were rising that that was really affecting new construction, but some of the conversations we've had here on the sound stage so far today even, people are like, "No, new construction is booming." Is that what you're seeing in Florida also?

Mike Sheehan: Yeah, I think there's a major backlog for new construction coming out of these XOVID years so the projects were in the pipeline. It's just nobody had the material at the time to start them and get them out. In terms of new ground and new contracts being broke, I think there was a little bit of a lag or a mold there just, again, playing catch up, but going into, again, now especially with that hurricane, I know Fort Myers, South Florida, Fort St. Luton, yes, Stewart, new construction all over the place. I definitely think there might've been a lag, but again, there's multiple variables to what might've caused that. My best guess would probably be backlogged from building.

Heidi J. Ellsworth: Well, I have to tell you, Orlando, like every other city, has construction on the highways everywhere.

Mike Sheehan: Absolutely.

Heidi J. Ellsworth: It's just everywhere. From the manufacturing side, what are you seeing in Florida, and just overall with interest rates and inflation, and kind of where the market seems to be leveling out?

Sara Jonas: Well, inflation certainly is impacting our customers, our contractors. That said, in coating and restorations, when there's inflation, oftentimes it actually opens up more opportunities for us because the cost to do a re-roof is increasing, and so people start looking at restorations a little bit more. There's an impact. Some of it's good and some of it's bad.

Heidi J. Ellsworth: I mean service and maintenance too. It seems like a lot...

Sara Jonas: They're putting a new roof on and try to add more service. Yeah, absolutely.

Heidi J. Ellsworth: And just trying to do repairs and keep it going for a while.

Sara Jonas: Yeah.

Heidi J. Ellsworth: Are you seeing that, Kyle?

Kyle Nurminen: Yeah. Like I said, I think it takes a more conservative approach from the contractor's point of view and more of fine-tuning what we're best at. Like I said, I spent three years in coatings, I know all the coatings as a roofing contractor doesn't fill a lot of coatings. If I have one small coating crew that's going to do something, I'm going to pick probably a quality coating that has a plethora of different flashing options that cover every single different substrate, like any pot line, it's fantastic, and certify my guys in that. If I'm going to do a coating at all, I'm going to go that route, and that's it. Otherwise, I'm going to refer out some coating companies for relationships that I've made like here and say these guys are good at that, these guys are good at that. I'll set it up for them.

I'll find out what are your hurts? What are your pains? What's your budget? Where are you at in this situation with this property? Then I'll refer out those contractors based on what they're best at. Really that's what it takes because there is another fallout's going to be coming. How much it impacts Florida is going to be yet to seen because we're probably going to be the strongest through just like we were through the last recession. I think we'll probably be pulling pretty strong through it, but from a contractor's point of view, we still have that forethought to say, "Hey, let's not try to do everything for everybody. Let's be best at what we're at so we have that strong reputation." I think on the contractor's level, it's the guys that are just trying to sell everything just to sell a job that aren't going to last. They're not going to make it. Just like a real estate agent through the last, the real ones make it all the way through because they know how to adjust through those times, and that's what contractors need to do as well.

Heidi J. Ellsworth: We have been talking about that so much on the coffee shop, on all of our things, just knowing your numbers, being prepared, really understanding when it does hit. Have you differentiated your company? Are you using technology? Are you doing all these different things? John, I know you work with contractors everywhere and have been helping a lot of them prep in case of downturn a little bit. What are you hearing?

John Kenney: Anybody that's listened to me before, you know I live by numbers. Numbers never lies unless it's bad information. We've been listening about the great pandemic recession that was supposed to come at the end of that last year, but it'll be mid this year, but right now when you look at all the experts, it's probably not coming. There is not a recession out there, but that being said, when we make it into '24, historically, that's big election year. Usually, the country never goes into a recession during an election year because it's not good for anyone. I would say we may be out of that partial recession. Will there be recession? Absolutely. Ebb and flows. It's going to happen. I don't think we're ever going to see that deep one that they said was coming. I don't think you're going to see that.

Now, popping back, backlog nationally seems pretty good, and I think a lot of that is the catastrophic weather events that is happening all over the country. There is constantly work demand out there. Florida, I think, has got hit pretty hard on a recessionary basis, and I don't mean comparing that to the national recession. Our rents have doubled in the state. What I'm hearing from contractors around the state is they can't get labor to live locally to where they're operating at because it's too expensive for their workers to live there, which in turn to keep people not going up 5%, 10%, 15% in labor, there's companies paying 30%, 40% raises and labor just to keep their existing force.

Heidi J. Ellsworth: For housing, basically.

John Kenney: To help pay for housing. I think that is a localized because we are the highest rent increase in the US for Florida as a whole, so I think that's part of the reason we're feeling it. Then the other business crunches, insurance, and then you talked the immigration, we talked about, you put all that together, we're pretty tight in this state as far as what's squeezing the contractor to be profitable.

Heidi J. Ellsworth: Yeah, and I see...

Mike Sheehan: Yeah, I agree on it. It's spot on. It's definitely a challenge there. The broader economic with Florida being the insurance companies, it's creating a perfect storm, so to speak, where there could be some heavy headwinds there, so to speak again, so yeah, I agree.

Heidi J. Ellsworth: It's important that contractors really know their numbers, know what they're doing, looking at diversifying, like you talked about, Kyle. I think that's so important. Going back to what you were just talking about, John, let's talk about training. There is so much going on right now that, for skilled labor, whether it's CTE, career and technical education, or just industry education and training is so important right now. How are some of the contractors? What are you seeing? How are they getting their crews trained and what are they doing?

John Kenney: It's interesting. Really, this labor shortage got worse in the last 15, 20 years, but I could tell you from starting out roofing in the late '70s, labor started to become an issue in the trades as early as mid '80s to '90s. It's really always been there, so we've been focused on that, we're still focused on that, but a recent study that I just read through FMI, which I found extremely interesting, is of all the companies in construction, including roofers, they included them in across the United States, field labor was a 25% to 30% issue for them that they're worried about. It's the managerial positions, crew leaders, superintendents, project managers, C level, estimators because they're retiring and there's no one to replace them, and there's no backup system for it. Now, it's not just let's worry about field because you have to have that. Now, all of a sudden in the next five years, they're expecting catastrophic problems across the entire construction structure of a construction company.

Heidi J. Ellsworth: Yeah, I mean some of us are...

John Kenney: The only way that you can do that is you've got to train your people how to lead and do their jobs. You really do. You can only do that in-house. You've got to work with people that have trainings, you got to develop it in-house, whatever has to be done, but you've got to do it because it's going to be probably a bigger killer than the field issues because if you can't get your bids out right, you can't manage your work correctly, and you don't have anybody to run your company, nothing else matters.

Heidi J. Ellsworth: What's going to happen? Yeah. Kyle, you gave a big nod to that.

Kyle Nurminen: Yeah, I really love the slot you did with the organization up in Detroit. I really love that talk. On the philanthropic side of things, I've been very active in organizing community efforts to improve education skilled trades on the lowest level, tapping into the intellectual property in our own neighborhoods. We're going to set this conversation up for another time because, as an industry, we need to start pulling together as an industry to make it affordable in these neighborhoods, to support the futures of our own companies. Business is business and people are people.

The one thing about the roofing industry, it doesn't matter if you're a customer service, accounting, estimating, operations, sales, what have you. It's the same that anybody their company needs, but you know what? Everybody always going to need a roof over their head. The industry's not going anywhere. I have people job hunting on LinkedIn. They own kids out of college looking for a specific job in a specific field. I'm like, "Get the experience here. Find out where you fit into a business vest, and then now you can start focusing on what you're passionate about now that you have that background," but like a lot of us, we end up once you're in it, it's like, "Why go anywhere now?" It's the industry.

Heidi J. Ellsworth: It's our secret job.

Kyle Nurminen: And always get a job.

John Kenney: Like they say in The Godfather, once you're in, you'll never get out.

Heidi J. Ellsworth: That's it. We want to bring all those young people, and we've been seeing that through these skills you say that we just, and our CA is involved in with your program you're doing. It's so true because we've talked to a number of people who have said the labor shortage is we're not looking in the right places, that we aren't going to areas or demographics or communities that have never been asked to join or never given the option and so...

Kyle Nurminen: We're spending so much time trying to steal everybody else, those entrepreneurs from other areas, and bring them here. That's our current model for economic development is to bring everything here and let that building rot on the corner until some major corporation comes in and creates more minimum wage jobs that suck up all the energy tax breaks and all those benefits. Once they're gone, those people go right back out of where they were. It didn't improve the economy at all.

Heidi J. Ellsworth: Without training.

Kyle Nurminen: Without training. It's up to us as our communities to reach out to tap into the intellectual property that's in our own deprived neighborhoods. There's bad guy. Back in the day, a guy was 18 years old and had a 16-year-old girlfriend and went to jail for it, and long ago, and he's bad rep for his whole life, the rest of his life. That doesn't make him a bad person or is not capable of doing everything else. You can't tell me that those kids in that neighborhood at Sarasota area, for instance, that the kids over in Palmetto are any less capable than the ones out in Lakewood Ranch. They just have different opportunities. That's what we, as an industry, should be very well-realized and tap into.

Heidi J. Ellsworth: And we're going to do that.

Kyle Nurminen: We're going to have conversations. I'm sorry. I pick over a conversation if asked about it.

John Kenney: No, I got to tap off of what you said. You have hit the nail, as they say in the industry, right on the head. We all look in the industry to either organizations, to government, to state programs to solve this trades issue. It can't happen on that level. Nothing works well on a large level, but if you, as a contractor, reach out to your local levels as you're saying, that is where it starts. You will be successful and all you have to do is have the right training and company culture in place, and they're not going to go anywhere. They want to stay and work and be part of society.

Heidi J. Ellsworth: Yeah, and that company culture is really important, and we're going to come back to that. In fact, that's the next question, and I want to talk about that a little bit. Sara, I know we already tapped on training, but this really is one of the key things that we need to be doing.

Sara Jonas: It is. We are there to help our contractors, to offer that training, but at the same time, I love everything that you just said. Everything. I think aside from the fact that once somebody is in building materials, you never leave, you cannot get out, and you love it, but it's real, right?

Mike Sheehan: No, it's [inaudible 00:39:15].

Sara Jonas: Right, but I think it's also really important where you're at, where I'm at, where you guys are at, no matter what area of the business you're in to invest in your employees, to train your employees, to help them to grow, so that they see the path, and they see their future, and know that you're investing in them. I think that can also help prevent Joe skipping from this company to this company. I think training on all levels is really important.

Heidi J. Ellsworth: Yeah. It's just not enough. I know you all do tons on-

Mike Sheehan: We have the MIT program is typically how we'll do the management. That's what I came up through. It's great. To your point, getting people in the door is that first step, having the culture there. My regional manager started as a roof floater with Willoughby. He's the regional manager in South Florida at this point. The opportunity to grow is definitely an incentive to get people on board. They just have to know that opportunity is there.

Kyle Nurminen: Yeah, I think the youth today coming out of college think, "I'm not going to be putting a nail. I'm not getting on a roof in Florida. I'm going to be doing that for the rest of my career." No, I got thrown out in the fleet all summer, putting down, tearing off pole tar pitch until Simon did it to me. That's how they broke me into the industry. Tearing off pole tar pitch and laying down hot asphalt all summer [inaudible 00:40:34].

Keenan Perry: Get out there.

Kyle Nurminen: It was rough. I went and drank beers with the guys too, and I got know what drives them and what motivates them, and I'm like, "I really appreciate that." I really appreciate what that company did. They had their own products and their own product line. Like I said, even as an employer now, I think about my crews and I think about the quality of the training and the support that I get from my manufacturers, and I want them to feel like, "Hey, you know what? This is what we do. We're going to do a coating. This is what we do. Our guys are well versed in it," and that motivates people to want to be a foreman. "Oh, I know this so well. I can run a crew doing this." Well, all right, I'm going to give you that opportunity. Let's get you some advanced training.

Heidi J. Ellsworth: Open up the opportunities, inclusiveness, which is really one as... We're getting closer to the top hour, but DEI, and I want to start with SRS because SRS has been a diamond sponsor with National Motor Roofing, they've been so involved with the Roofing Alliance. Raise the Roof Foundation is just incredible. What are some of the things as an industry that you all are seeing has started changing and really been helping this topic we're talking about, inclusiveness and bringing more people and think from a DEI stance? Let's start with you, Keenan.

Keenan Perry: Yeah. This is a great segue going training into DEI because one of the groups that we've been talking about for the last, I don't know, 20 or 30 minutes here, is a group that's been so unrepresented in the industry that they've been working in for probably their entire existence within, so that would be the Latino population. Let's just go out there and say it. They have not had the resources to become knowledgeable. They have each other, but nobody's putting out the right kind of educational tools on how to grow your business for Spanish-speaking contractors. They have to figure it out themselves. It's not like we're talking about uneducated people. They just speak a different language. That's really the only barrier. Over the last couple of years, one of the things that we've done is launched our Latinos program.

We've got Julissa and Edgar who run that program, and they travel the country weekly, doing trainings at ranges out in the field with Spanish-speaking contractors. It's product training, but it's also just business training. If you happen to be in an area where they're doing that, it's all on our website. You can find that. I highly recommend going to that. It's something that's been needed and something that really hasn't ever been done by a supplier like us. I think Home Depot and Lowe's have tried it in the past, but that's talking more general contractors specific to roofers in the roofing industry. That's one thing that we've been trying to do. You've also mentioned the Raise the Roof Foundation and some of the other things that we've done, and that's one of the biggest initiatives that we've got going right now. I'm not going to make up the statistic, but it's something like 70% of Latino males are in some sort of contracting in America without any proper training, so there needs to be resources for them, and we're happy to be one of the first within our industry.

Heidi J. Ellsworth: One of the things I'm really excited about is we are working with SRS to do our lunch and learns in Spanish, and Julissa is actually hosting that. She's amazing. We are getting lunch and learns out in Spanish. We also, of course, our whole site is translated in Spanish, English, or French, and I think those are... I'm so glad you brought that up because it's so important. Such a rich part of our roofing culture is the Latino culture, and we're finally kind of going, "Okay, yeah, this is awesome. Let's make all this happen."

Keenan Perry: At the branch level, I'm not going to steal this way from you, what we are trying to do is make sure that we do have someone Spanish-speaking at the counter in the branch to be able to talk through any sort of product issues or just general questions because a lot of the times, the sub crews when they pick stuff up, in case something has forgotten on the initial order at the job site, they got to go run and pick something up, they might not know what the English word for it is. They can describe it, but definitely [inaudible 00:45:20], right? So, having someone Spanish there that's a product knowledgeable, that can be consultative in that sort of way, [inaudible 00:45:29].

Heidi J. Ellsworth: Yeah, that is great.

Mike Sheehan: To his whole point, the initiative there has definitely helped us. I can tell you from a distribution standpoint, and even these crews, when they do come in [inaudible 00:45:39] and pick up material at the branch, they will go to the distributor that they can speak to and they feel comfortable with. We have a branch in South Florida that doesn't have anyone speaking Spanish there. There's a problem. There's a problem there because you obviously don't know where your market and your target audience is here. The bigger problem is you're going to lose business over it, and it's very real. We see it all the time. Fortunately, SRS really has done a great job spearheading it. I'm actually in Spanish classes. The company sponsors Spanish classes for all employees. They pay for it. It's actually really in-depth and not a Rosetta Stone.

Keenan Perry: It's like full-time.

Mike Sheehan: Yeah, I got homework at the end of the week and everything else. Again, the class isn't cheap either, but it's part of their initiative and they're trying to stress the importance, and they're willing to pay for any employee that's willing to put in the time and effort. They've been gone as far as, we have a hotline number that if somebody does come into your branch and they don't speak English, or if it's only Spanish and nobody in the branch can communicate, then call this hotline number. I have them call them, reach out or whatever, and they'll just communicate it back to you or say, "Hey, this is what they're looking for." We've really tried to go above and beyond to really just hit that audience. Again, it is a majority of our audience, 75%.

Heidi J. Ellsworth: Well, and I know SRS is one of the leaders working with Labor Central, which is a new technology app that is really working on bilingual communications with a number of the Latino crews and connecting.

Keenan Perry: If you happen to be here at the FRSA, we do have information on Labor Central at our booth, booth 100. Please stop by.

Heidi J. Ellsworth: Yes, please stop by. Labor Central will be on here tomorrow, too.

Keenan Perry: Great.

Heidi J. Ellsworth: Yes, so we'll be talking about them. It's just showing all the different things that are starting to happen that we're really seeing on that. I do want to say, a lot of times, people throw out this term, DEI, and I just want to say diversity, equitable, and inclusive, and you kind of know where we're going with that, but Sara, what are you seeing just overall with ICP, such huge company, and your initiatives?

Sara Jonas: Yeah, so internal communications falls under my umbrella as well, and so I can say that from a corporate perspective, we have a lot of diversity within our company. We have a lot of different languages within the company at all levels. We have plants all over the country, so all levels. We make sure that we offer the communications in multiple languages. The employee app is bilingual, so all of that material is translated. We also have been doing a lot, in particular recently, I would say last nine to 12 months, celebrating diversity. We've been making sure that we're highlighting, and not only celebrating, educating on some of these different cultural holidays, different traditions. I can plug to Nava, my teammate who... It's her. She's been doing a really great job with it. I mean just really great job.

When we look outward, I mean we have sales teams who are bilingual all over the country, and particularly in Tampa, so we do offer the training certifications in multiple languages, but we even just recently went through kind of an update or facelift of the APOC brand and we updated bazillion product label. It feels like it. We found labels where we didn't have simple operating instructions that were trilingual, so we've made sure to make that. That's so basic, right? But it's just a consistency thing and it's just a crossing the T and dotting the I to make sure that all of that information is available, so we've just gone through that as well. I think ICP has done a good job. We can always do better. All of us. We can always do better.

Heidi J. Ellsworth: That's nice to hear what everybody else is doing too. It's like, "Oh, we should do that. We should make that happen." You come from a very rich cultural company.

Kyle Nurminen: Yeah. I'm actually feeling I'm glad I attended and been a part of this conversation. It's considered a blessing. I just came to realize that, yes, our CEO, Jesus Lara, first worked for Richard McCuen, the original owner of Total Roofing back then, and he ended up being one of his installers. Because he was Hispanic, he had access to crews in his family and his community, that community, so we always had crews, which was very valuable even back in the '70s and '80s. Jesus is now the CEO of Dynamic Metals and Total Roofing Systems, and Richard McCuen has come out of retirement to get us back into what used to be our bread and butter, which was the commercial work and the government work and stuff, so now we're diversifying in that way, but wow, what a cool dynamic and what a great story.

We're talking about a motivation, somebody... I don't know. Jesus is kind of quiet. He's all about streamlining processes. He's an efficiency production guy, that's his passion, but he hires the right people in certain areas to be the face of that, and the business development side is... I need to bring him to the table. I think he needs to speak to some of these organizations, or we might have to put him up on a platform a little bit. I might have to call him out.

Heidi J. Ellsworth: I've already got it on my... Now, it's here. I'm like, "We need to get Jesus to come and be in it." Yes.

Kyle Nurminen: What a success story in the human community. It can totally show how that can be done from a crew leader, to an installer, to owning, and then specialize. Oh, that's amazing. Yeah. It's a goosebumps.

Heidi J. Ellsworth: Yeah, goosebumps. That's the inspiration I love.

Kyle Nurminen: It's good stuff. Yeah.

Heidi J. Ellsworth: I know. John, you're actually on a committee with National Roofing. I know that you are involved with UK, Canada. You talk about diversity. You're everywhere. What do you see?

John Kenney: Well, yeah. Like I always like to tell my contractors that talk about DEI is to what my recommendation is, and I mean this in a very general, is leave your politics at the door, or politics in general at the door. The most successful companies have the most diverse teams. It's always been that way. Whenever you have a team, you never want people like you. I don't mean like you as what your nationality is. Like thinking. Best teams in the world are challenged by thoughts, and that's the best success. Now, you're correct. I'll tell you this, I am the only American that sits on the IFD Committee, voting American, and you want to talk about diversity and mix.

I mean there's 18, 20 European countries, and then there's me. We prove, by doing this all coming together, that roofing is the connector of the world. It works. It doesn't matter what your politics are or what your country. Everyone's different. Everyone has different beliefs, but we all come together for what? The common goal of improving the roofing industry. That's why I say leave politics at the door, make your team as diverse, however that may be, get unlike thinkers unlike yourself, so that you can build a better team, and you will be successful.

Heidi J. Ellsworth: Really looking at the next generation, the next generation is coming up across the board. That's what we need. We need to be bringing all different types of people. We need to be bringing them into this roofing industry.

John Kenney: You are correct. One of the things I found, the younger generation will not go into a company culture that is not diverse. They really won't. It's a deal closed right from the beginning.

Heidi J. Ellsworth: Yeah, and they won't stay if they do happen to get in there. Okay, last question. We're going to do this kind of quick as we go around, but I'm just bringing out your crystal ball and we want to look at what do you see are some of the things that people should just have top of mind thinking about in this coming year? For the contractors, everybody who's watching out there, what are some topic trends, threats, whatever you might see? Let's start with you, Keenan, and we'll just go around.

Keenan Perry: Rest of the year?

Heidi J. Ellsworth: Even into next year.

Keenan Perry: Yeah. On the events side, because that's mostly what I handle for any contractors, come to trade shows, please. We love seeing your faces here because this is an opportunity where we can all get together and learn, talk about things. It doesn't happen that often. I think it needs to happen more. Trade shows that we've got coming up are Western states, the IRE next year. I'm trying to think of any others that we'll be at. Maybe a couple of regional ones. Then of course, everyone should tune into the Las Vegas pool on December 22nd at 12:30 Western time.

Heidi J. Ellsworth: I like it.

Keenan Perry: Yeah. In terms of regional stuff...

Mike Sheehan: [Inaudible 00:54:49].

Keenan Perry: Yeah, exactly. In terms of regional stuff, what do we got going?

Mike Sheehan: From Florida, everybody's always got their hurricane on a back burner. We'll literally change the market for all of us tomorrow. I think that's always... It's probably a 50/50 too. Some people are probably saying, "I don't want that storm," and then 50% saying, "Yeah, give me a storm. We can do it." For the rest of the year, that's it. Going into next year, again, it's an election year. I don't see anything getting too volatile. If anything, it's probably going to stay pretty flat or maintain where it's been at at least until there's better foresight into how that thing's going to shake out. Yeah, overall, as long as everything stays steady, I don't see anything changing in the next year in terms of business, economy. Obviously, immigration and insurance, we've touched on, but fingers crossed, those continue to get better rather than get worse there.

Heidi J. Ellsworth: I hope so too. Yeah, I'm with you. I am really not fond of election years. Just putting it out there. It just gets in the way of work.

Mike Sheehan: Yep.

Sara Jonas: That's funny.

Heidi J. Ellsworth: James would be dying right now if he heard me say that. Sara, what do you see?

Sara Jonas: Yeah, we see growth, and we are setting ourselves up for growth to make sure that we can handle the growth. We're excited for next year in particular. If I'm going to just go ahead and say things to look for, shameless plug, look for some new products, some new technologies coming out from APOC. Look for some rebranding of let's say some roof adhesives and some in intentious waterproof coatings going under the APOC brand, so that brand's going to be bigger. We are really, really excited about what the future holds and we're very excited about 2024.

Heidi J. Ellsworth: Yeah, that's good. You'll be able to find all those new products and everything on CoatingsCoffeeShop, just say yes. Kyle, looking into the next year, what are you seeing?

Kyle Nurminen: I like what I'm seeing in the coatings industry as far as the recent purchases of coating companies by larger representing companies with reputable warranty standing behind the coatings. The big three, the APOC, the [inaudible 00:57:06] of the world are all kind of doing this and solidifying those options. I think that's going to reduce a lot of the risk and the mystery of coatings coming from everywhere else trying to compete here in Florida while these companies are leading that. Also, my global...

Heidi J. Ellsworth: Crystal ball.

Kyle Nurminen: Crystal ball. I see a lot of metal.

Heidi J. Ellsworth: Yeah, a lot of metal. Yeah.

Kyle Nurminen: Lot of metal. That last storm coming up the middle of the state, it's a no-brainer. You walk through this show and look at how many booths have something to do with metal roof installation. We're now getting more advanced into our engineering and our testing on thermal barriers, on installation, on other options that diversify the metal work itself. Every system has its pros and cons, but we're trying to reduce those cons as much as we can as a metal industry.

Heidi J. Ellsworth: I love it. You can see all that on MetalCoffeeShop.

Kyle Nurminen: That's right. I'll be there, too.

Heidi J. Ellsworth: I know. I like it. Coatings, metal. Okay, John, bring us home. What do you see?

John Kenney: Yeah. Honestly, I agree. The economy's going to keep plugging along for a couple of reasons. One is there is so much backlog of available work in the pipelines due to major climate events around the nation due to the fact that the labor shortage is not going to go anywhere. It's not a fact of whether the work is there. It's there. It's getting it done. Okay? I think that's the biggest thing. I think the smart contractor that's going to be the most profitable is those who invest in-house training, those who invest in reaching out locally to their schools and systems area to try to get people in and work on efficiency and processes within their company, not only know their numbers, but understand what those numbers mean. You can actually make more money by doing a lot less or the same volume and not worry about growth every single year to get you where you want to be because the labor force is going to control what your actual growth is going to be.

Heidi J. Ellsworth: The amount of growth. Yeah, I think so. You all are amazing and our time is actually amazing. We did just absolutely perfect so I just want to say thank you, thank you, thank you, thank you, thank you, thank you for being on here on this Live Coffee Conversations, and I want to say thank you for watching. This has been, I don't know about you, but I've learned a lot and this is the kind of stuff we're constantly wanting to bring you live from the Coffee Conversation, soundstage sponsored by SRS. Thank you so much. Be sure to check out our new CoatingsCoffeeShop sponsored by APOC, MetalCoffeeShop because Kyle's on there and so is John, and check out all of our coffee conversations in RLWs because we're going to keep them coming and we are going to be interviewing a lot more people today. We look forward to seeing you all here back real soon. Have a great day and thanks.

Kyle Nurminen: Stay safe.

John Kenney: Thank you