ROB: All right. Danny, Navneet, you guys can both hear me okay?

NAVNEET: Yes.

DANNY: Yes.

NAVNEET: Yes.

ROB: Awesome. All right. We'll just wait for some people to you trickle in here and then we'll jump into it. We'll give everybody a few more minutes to grab some lunch here and then we'll get going. Danny, I guess for you it's almost like afternoon snack or nap time. You're muted Danny.

DANNY: Sorry. Yeah, both of those things in that order.

ROB: Yeah, thanks for making the time.

DANNY: No worries.

ROB: Awesome. All right. Well, we've got a few more people trickling in. I'll give everybody just maybe one more minute and we'll get started. The nice thing about doing these webinars around lunchtime is I can make the same jokes over and over on the webinars and hopefully, each one maybe I can improve upon it.

DANNY: Just tighten it up a little bit.

ROB: Tighten up a little bit, exactly. All right. Well, let's kick it off. For those of you who are attending for the first time on this webinar series, first of all, thanks for making the time and joining us. You know, whether you're joining us live or you'll be watching us later, I appreciate you taking the time to learn about why you should build your home using LGS, light gauge steel instead of wood. And we're lucky to have with us Navneet and Daniel Odom to help explain the topic that's relatively new to the residential industry. So, it's exciting to talk about it. Without further ado, kind of how the format of the webinar today is going to work is we're going to start by giving a quick intro about Livio, what we're all about. Danny, we'll give you a quick time to chat about yourself. That means I'll probably give you some time just during the Livio intro to talk a little bit about what we're doing and your background and all that stuff. We'll get into a brief overview of light gauge steel and what framing is all about. What are the components of what makes up framing? We'll talk about performance, function, and cost. That's kind of the three main categories. Daniel, I'm hopefully positioning you with some tough questions as our LGS expert as to some of the hesitations and reservation some people might have when making the consideration of choosing LGS over wood in each of those three particular areas. So, you're in the hot seat today for us so thanks for thanks for being there. And then we'll save 10 minutes here at the end for Q&A.

So, about us for those of you who don't know, Livio is a custom family home builder in the San Francisco Bay Area. We've grown over the past few years into really developing what we think is best in class technology team by vertically integrating really our entire workflow all the way from engineering, to procurement, to execution even, we've really been able to bring a lot of optimizations to the home construction market and we're excited to share with potential clients. We have a unique model. Like I mentioned, we're vertically integrated. We have a distributed team, global, that helps us execute on our projects in order for us to be as competitive in the market as possible. Navneet, who's joining us today, Navneet, do you want to give a quick spiel about your story and where you came from and how you got here?

NAVNEET: Yeah. Hey, I'm so excited to be on the webinar series. And Rob, you're doing a fantastic job at these. Love it. Danny, thank you for being here. We love Danny here and we'll get to it in a little bit. I, of course, originally from India. I have lived in Bay Area 20 years. Electrical engineering degree from Stanford, worked in Silicon Valley in software, product management, wealth building products. And for the first, I guess, 13 years or 10 years of that time period and since 2013, building real estate development and construction companies, two companies primarily based on the notion that technology can bring efficiency in every aspect of that. We currently have many projects in Bay area where 90% of our execution is executed as a general contractor, as a builder by our team directly in India. We fly drones on our job sites, we have our own construction management software platform that is the backbone of everything that we do. We use sophisticated cameras which ultimately are eyes and ears for our team in India. And of course, we have on site supervision, etc. all the goodness out there. But bottom line is, technology has changed how work can be done efficiently and we are at the forefront of that to make that happen. So happy to be here today.

ROB: Awesome. Thanks for the brief introduction. Like Navneet mentioned, we have two separate teams actually, that we're going to be getting into in detail today for the first time. We have a large back office team that helps with pretty much everything there is to do about your project. And like Navneet mentioned, about 90% of it all happens right then and there. But the other piece, which we haven't really discussed on previous webinars is our factory team, which we'll get into today. And yeah, we're excited to share. Navneet already gave his spiel. Danny, why don't you go ahead and if you wouldn't mind letting everybody know a little bit about yourself.

DANNY: Sure, thanks Rob and thanks for the invite for this. It's always exciting to try to build up the white niche market. It's a market that I've been in for basically all my adult life starting as a metal framing and drywall contractor in Knoxville, Tennessee. That was a family business and we started analyzing light gauge steel, load bearing light gauge steel around 2004. And from there, we grew quite a bit. In 2012, we branched it out into its own business doing panelization, bought a factory close by here in Tennessee and started another factory in Reno, Nevada. We've worked in 28 states. We've built in many different industries, a lot of multi-family hotel, some residential, really pretty much all aspects of commercial construction and all in light gauge. And it's exciting to talk about the residential world and the opportunities there in light gauge. Unlike other industries, light gauge has been in big commercial for a long time and so a lot of the technologies that Navneet referred to, some additional ones, have had the benefit of being tested in some really large scale construction environments by big builders doing billions of dollars a year. So, being able to capture that technology and take advantage of it and bring it back to the light gauge industry into the residential industry is a real opportunity.

It seems like it's sort of a pivotal moment in the construction industry for various reasons, cost, and product availability and technologies Navneet says. So, this is an exciting opportunity, I think. My experience with Navneet, working with him for several months now is that they really understand the benefit of technology and new technology not just for technology's sake, but because the use of it brings real difference to the bottom line with the project and the efficiency, the execution of the project. I've seen a lot of different things in a lot of different states and really this is one of the best opportunities I've seen on the residential site for people that I think really have a chance to make it work. So, I'm excited to be a part of it.

ROB: Awesome. Thank you. Well, yeah, we were introduced to Danny even before we got some of the cool machinery that we'll be showing you in a second, that set up in our factory. Danny has kind of been with us through the full lifecycle and has been really pivotal in steering the direction so enough can't be said, Danny. But I appreciate you being here and like I said being on the hot seat for us today.

DANNY: Sure.

ROB: Awesome. Overview, I figured we'll just start at a really high level make this slide really quick. But I know Danny, since you've been in the industry for as long as you have, can you tell me a little bit about what we're looking at here and generally speaking what makes up framing and when somebody says, "Hey, make a decision between framing a house with wood versus framing a house in LGS," can you give a brief overview of what that means?

DANNY: Well, in its most simple form, and this is a great slide for that, it's the bones or the skeleton of the project. It's the structural skeleton around which you're going to install your drywall and platings and hanging your cabinets on it. And whether that's in a wood building or a steel building, those techniques, the technology of studs and joists and trusses, you know, the major components that make up these structures are the same. They're just one is wood and one is steel. This slide really shows that pretty well. The overall skeleton of both of these projects is very similar. It's just the building component. And you know, as we'll get into some of the connection details of things are different where you're screw-attaching in LGS primarily and you're air nailing and using nails otherwise, some screws in the wood industry and you know, some claddings work better with one versus another and all the things we can get into. But very basic, your light gauge steel is the skeleton of your structure.

ROB: Got it. I guess selfishly speaking, it's probably one of the more important pieces, I guess it's fair to say as it kind of contributes to each of the elements, whether it's on the exterior or the interior. It contributes to each and pretty much every element that there is in the building process. Is that fair to say?

DANNY: Yeah, absolutely. I mean, the skeleton is a good analogy. You can wear whatever shoes you want. But if you're if your leg is broken, it doesn't really matter. Skeleton has got to be right and healthy and so the light gauge steel being a skeleton, I feel like the superior product, we'll get into why. Yeah, it's a very key part of the building process.

ROB: Awesome. All right. I have this slide that I put together kind of just to explain how does a material get from like a raw product in wood versus, I guess, what ultimately will be a steel stud or steel joist like you've mentioned. We don't have to spend much time here but I just thought this was kind of a cool picture and one brief picture kind of showing, hey, how does the framing lumber get onto with the job site and ultimately it gets milled into different dimensional lumber shapes, profiles and it gets used on the jobsite and framed onto your house. It's a natural product, right? It's not necessarily a renewable product but it's a natural product in the sense that it comes from obviously our forest and ultimately gets milled down into the shapes and profiles that you see framing on each and every one of your houses for the most part in the residential United States. Danny, I know that cold-formed steel is a bit different but ultimately it comes in... when we talk about what is CFS, I guess, and what is light gauge steel? Maybe we can start there. Cold-formed steel and my gauge steel, is there any difference between the two? I know they're used interchangeably but Danny, can you speak to that?

DANNY: They're of course referring to the same thing. Cold forming is a nod to the process by which this steel was made at the middle and the light gauge reference is the fact that you might have a family of steel products that can be all the way down to aluminum boil thinness up to the heaviest structural steel. Light gauge is a family of products that lives between the 10 and 25-gauge thickness. So, it's just sort of an industry name that describes that group of products.

ROB: Cool, cool. So, ultimately what I'm looking at here Navneet, there's going to be a cool slide here next that you'll be able to walk through which actually shows what we're doing in our factory. But just to give everybody kind of a brief rundown, it starts with a coil which comes from a steel mill, goes through this intricate device with the coil on one side. Ultimately it goes through this sort of machine. This machine has a set of rollers that I'm looking at here. So, as the coil on this side gets fed through, ultimately this gets shaped into the sort of profile that you see here at a really high level. Danny, I don't know if there's anything that I missed on that. But at a high level that's kind of hopefully gives everybody a good overview of what it takes to... and the differences between a raw material wood versus how the shapes and sizes get built in panel for cold form.

DANNY: That is good. Good description.

ROB: This is a cool slide. It's our first video ever on a webinar series I've realized that. So, hopefully the picture comes through cool. But I'm going to pause really quick and I'm actually going to go back so that Navneet can talk through it a little bit. Navneet, what are we looking at here, I guess?

NAVNEET: Right. Can you go back a little bit to the beginning?

ROB: Yeah, let me go back one more time.

NAVNEET: So that's where on the left-hand side you're seeing a coil straightener. Did you have the beginning where there was... anyway, so this is the machine This is the cold form rolling machine in our factory that we got from Danny, from Jobsite Steel. Essentially, it's a set of rollers that you can't see from this view but that's where the steel coil is going through and is being formed into a part, in this case, a stud or a track as we turn around. And these are the guys who just take those parts that come around. It's an assembly line operation. They take those individual starts and tracks and they assemble them into wall panels, floor panels, ceiling panels, roof panels, awning panels, staircase panels and so on. You can see these guys are working on framing. They made wall sections which will then be QA, QCed, certified and ultimately loaded into the containers to be shipped via ocean freight to the job site here in the Bay Area.

ROB: I don't know if anybody can see this, but I didn't see the logo on their shirts. But what factory are we? Just to backup, what factory are we looking at?

NAVNEET: Oh, yeah, I missed that part. This is our factory in Pune, India. Livio Building Systems. India is a wholly owned subsidiary of Livio Building System USA, right here in the Bay Area. We manufacture 100% of our light gauge steel panels for all our LGS framed projects in this factory.

ROB: Awesome. Yeah, this is the real deal of those still images. Hopefully this gives everybody a good understanding of some of the differences and kind of the machine precision that goes into creating these LGS panels. Ultimately, Danny, I put this slide together, I don't necessarily think we need to talk about it in detail, but Navneet we're just mentioning how each one of those individual parts gets formed through the roll former and kind of how it makes up a wall panel. But you mentioned the similarity between wood construction. Ultimately, any differences that you think is worthwhile discussing here, pretty much everything that we're looking at here, similar components to what folks would see in wood construction.

DANNY: The configuration of the framing, the way the parts are laid out, very similar to wood. The key difference on this slide would be bottom left-hand corner where you have a C stud and the bottom track. There are two distinctive shapes and on the right age where one is the track, one is the stud and the stud fits inside the track and is fastened from the side, whereas a woodgrain a 2x6 would be your stud, a 2x6 would be your plate instead of a bottom track and it's nailed in from the end. That's one difference. The other big difference though is that stud there, let's say it's a six-inch stud, I mentioned the light gauge product can be anywhere from 10 to 25 gauge. The advantage there is you can make a six-inch stud out of the heavier end of that spectrum or the lighter end of that spectrum and they have vastly different structural capacities. You know, a 2x6 will always be a 2x6. If it's Southern yellow pine or Douglas fir, it has a certain amount of engineering properties, certain limits to what you can engineer with it. But one advantage to steel in this scenario is the 2x6 equivalent C stud being heavy or light, you can take much greater loads or much lighter loads depending on what the need is and you can really tailor a lot of customization into your design that's not available to you in wood.

ROB: Cool. Cool. Cool. As far as what makes up the, I guess, interior and exterior of these wall panels, you could put siding on the exterior of the house, you could put in the interior of the house. Now what would you expect to see on a residential project?

DANNY: Right. Any cladding, commonly, you can get by with the wood substrate like an OSB or plywood in the residential world but by code in the commercial stuff that I have a lot of experience in, you can't put those flammable products on walls often without a lot of--

ROB: But ultimately if you're a homeowner what you see is your end product. Are you seeing drywall? What do you see that's kind of the finished product?

DANNY: Drywall on the inside and whatever cladding on the outside, masonry, stucco, vinyl siding, there's no difference in the selections available to you in steel as opposed to wood. It's the same.

ROB: Cool. Cool. Cool. All right. Now that we've kind of gone through, hopefully everybody has a good understanding or at least an overview of how a frame gets to come together and ultimately how a light gauge steel or component gets formed and put into a panel. Danny, these are some of the tough questions. I told you it wasn't going to be softballs on this one. Performance, let's start there. A lot of folks out there and one concern that's often presented in light gauge steel construction is the noise element as opposed to maybe wood, which traditionally speaking, and you know, anytime there's something new, I think there's always that concern. Danny, can you speak to what are some of the methods and how can light gauge steel product I guess compete with wood when it comes to noise concerns?

DANNY: The studies that I've read that have been done on this by American Walls and Ceilings Institute, AWCI and Build Steel is another one, have found that it's comparable to wood when the proper construction techniques are followed and followed correctly. Often when you have a noise complaint or you hear about squeaking or some type of ammunition, if you will, against the light gauge industry, it's almost always traceable back to improper installation. Be it a fastener type or... you know, it could be a number of things, but in a laboratory environment where the processes are checked and double checked prior to testing, the results of those tests are very equitable steel or wood.

ROB: Got it. And Navneet, prior to this, as a developer, general contractor, built a lot of homes out of wood as well. Is noise ever a concern in wood construction?

NAVNEET: I mean, we still have many active job sites where we're building with wood. Clients come to us with already engineered homes with wood, so we build with wood as well. Over the years, yes, you can still have a lot of squeaking or sound barrier issues between say a laundry room next to the master bedroom. So those concerns are always there and there are a lot of different products out there whether it is quiet rock we use from time to time or specialized insulation products that we use to address it. So, noise is a very valid issue irrespective of whether you're dealing with wood or steel systems and it can be addressed with appropriate insulation methods like Danny just said as well as appropriate insulation techniques.

ROB: Danny, I guess this one's a little bit easier but the next question is in regards to fire resistance This one's obviously become more and more of a sensitive topic especially here in California as of recently. But can you speak to LGS's performance and the differences between that of wood construction?

DANNY: Steel doesn't burn, wood burns just from a basic level. But now, certainly you can build out a fire-retardant lumber but even with that and the really increased cost that comes with it, it's still not comparable to steel which it's made by fire. When we first had our factory in Tennessee, we were looking at dealing with the insurance on the building. The insurance company wanted us to put sprinklers and we would prefer and ended up winning this argument that if the building burns down, the steel will be okay. If you spray it with water continuously with a sprinkler, you'll actually damage the steel over time. So, it's better just to let the whole building burned down and we'll go get our steel out and put it in another building. It's nonflammable.

ROB: Got it. All right. That was a little bit easier of a question, I guess. This third question which folks may be concerned about is energy performance. Wood being a kind of naturally insulating product, how does one deal with ensuring that the energy loss maybe through the exterior of the home, that concern can be addressed?

DANNY: Steel does have a weakness with heat transfer and certainly with the energy code in California it's a concern in construction. It's normally addressed at the cladding level when you can put a rigid insulation board as part of the cladding.

ROB: When you say cladding, you mean interior or exterior?

DANNY: Exterior cladding, so behind your siding, behind your brick or an integral part of a stucco system anyway, sort of create a thermal barrier with that insulation on the outside of the wall to interrupt that thermal transfer and that's typically how that problem is addressed.

ROB: Got it. Okay. And performance, you mentioned this a little bit and I think a few of the points here on the right-hand side also discussed this point. But longevity, how does it compare over the test of time to that of wood?

DANNY: The world where I'm primarily from, fabrication, we build multi-storey multi-family usually in the five to nine storey range. And for a variety of developers and some of those developers are people that hold their own properties. They've told us anecdotally as well as we've seen data on it that over time wood does shrink. And it's going to be more pronounced as the building gets taller. But these multi storey buildings I'm talking about in that instance, were shrinking over 10 years like an inch and a half. Well, if you're holding your own building, then the maintenance costs for doors, windows, cracks, all the kinds of things that follow settling as an expense is a real concern. Steel is not going to do that. Steel is not going to settle. So, when we talk about longevity, both buildings are going to be there in 30 years but the maintenance costs upkeep over time steel versus wood, steel is quite a bit less on the maintenance side.

ROB: When building out of wood construction, you mentioned window and door operation, how would a window or door be affected one way or the other over a lifecycle? Can you explain that one a little bit more?

DANNY: Well, wood being a natural product is going to absorb and give off moisture from humidity and moisture in the air. And windows and doors are installed with very tight tolerances so there's not a lot of room around them. And as the framing elements, the 2x4, 2x6 in wood swell from weather, they press inward on those openings where the windows and the doors are and that's how you get a window and the doors to stick on you. And the same thing can happen with your drywall, is that as the walls are swelling and drying out over a cycle over time dry wet, dry wet, you'll start to get screw pops in your drywall and cracks in your drywall finishing, that kind of stuff. So, steel is a lot more stable in that by comparison.

ROB: Got it. Got it. Okay. Before we maybe move on from this particular slide, Navneet, when it comes to actually, let's say comparing the wood product versus an LGS panel, when it comes to tolerances Danny brought up, what are some of like maybe, you mentioned a QA QC process in the factory setting, what sort of tolerances are we talking about in a factory like setting versus a wood frame construction?

NAVNEET: Yeah, in a typical wood frame construction framed on site, I mean you are counting on the structure to be built and then explicitly go through straightening of the walls, shimming, whatever needed to be done in order to straighten. There's explicitly labor hours spent for days or several man days just to straighten and also a lot of things aligning on the roof level or at every level essentially, has been a constant issue. It's more of an art than a science, I would say when I compare it to doing things with precision equipment to cut in a factory industrial setting where things are extremely, extremely precise. I would like Danny answer a very specific question on exactly the kind of tolerances that we shoot for in our factory. But essentially, the idea is that we are within fraction of millimeter most of the time. That's what we shoot for in our factory. Industry standard might be more than that, might give us more allowance, but what we are shooting for is absolutely straight edges, absolutely perfect finishes, corners, and precision and everything that we do in our factory.

DANNY: I'll just add to that, talk about tolerances. Let's talk about one of the tolerances. I think the factory measures around 20 different elements of quality control on the product itself. One of them is bow, so just the curvature of the 2x4, which we keep within 1/8 of an inch at bow and 10 feet. And really, I realize I'm a cheerleader for steel here because that's my world. But if you want to compare that to wood just go down to Home Depot to the 2x4 rack and pick through that lumber a little bit and compare that quality to even five years ago in terms of what you were able to purchase on the market and those issues that you see with that lumber where you have to pick through 10 boards to find one board that's good or not going to improve. Lumber is getting harvested at younger, younger age, the quality of lumber it's not the fast growth timber anymore. It's all farmed timber pines and fir and the quality is going to get worse. So, those issues that Navneet described about shimming and trying to bring the walls back straight in an alignment on a wood building, that situation is not going to improve and that's in residential and commercial, anywhere that that wood is used, that's going to be the case.

ROB: Got it.

NAVNEET: Can I ask Danny a question? I don't think if you're going to ask Robin about mold and the length, performance of wood was the steel.

DANNY: Mold will grow anywhere that there's a food source for it and wood by its nature is a good source for mold whereas steel isn't. A lot of mold has to do with a lot of other elements of the building systems being properly done and not getting wet and all that. But just comparing them side by side, one is a food source for mold and one is not.

ROB: I guess termites are on a similar breath to that, I guess.

DANNY: Yeah, same. Exactly. Sure.

ROB: All right. Well, going to function. So, I'm a homeowner, I've decided I'm building my house out of light gauge steel, I drank the Danny Kool Aid and I'm going that route. Danny, if I'm remodeling my house down the road and I framed my house out of LGS, are there any complications or concerns from the homeowner side about my ability to do that?

DANNY: The techniques and processes are going to be the same as though it would have built up out of a wood structure. I think the risk area there would just be finding a contractor that's knowledgeable in the process, that has worked in light gauge steel, you know, the connection, fasteners, they're all very important to the performance of it. So, it's not necessarily a handyman built out, you need to find someone that knows what they're doing. But any amount of addition as far as can I add on to this? Will it be this? It's going to be the same kind of scenario as a wood situation as well.

ROB: What about from a structural engineering standpoint? Any difference as far as issues that might present themselves and being able to figure out, I guess, some of the strength or components or is it similar to wood in that respect?

DANNY: No, it needs some different calculations with different parts and pieces. But ultimately, it's the same process and they're going to go through the same type of analysis and the same detailing as for a wood structure. It's just going to be a different set of details and different set of parts and pieces.

ROB: Got it. All right. Well, I move into my house, I'm going to be mounting a TV or some photos. You mentioned that the interior finish can be drywall. So, I imagine for anything that I'm just going into drywall for I guess it'd be the same. Same anchors I'd pick up at Home Depot and an install. But in the instances of where maybe I need to mount, I guess even the TVs nowadays you don't even need probably studs because of how slick they are. But let's say, for example, I got this big old TV, I need to find a stud to install it. Is that possible to do and install it with light gauge steel?

DANNY: It is. I mean, the capacity of a stud to handle a TV mount or some wall hung whatever, is going to be similar to wood if not superior. The main difference is going to be, and there's a difference, if you're fastening into a stud you have to do that with a screw, with a self-drilling metal screw. But those are readily available at the big box stores, Home Depot, Lowe's. You can't just hammer into the wall into the stud like you can with wood, but the fasteners are there and the capacity is there to hang pretty much anything you want just like in wood.

ROB: Awesome. Okay. Okay. One other common concern that's out there which I'm sure you've faced probably even more so in the commercial space in maybe hospitality and some of the bigger projects you've done. But cell phone service and interruptions with signals for Wi-Fi or otherwise, how can how can that issue be addressed?

DANNY: Well, I think in the residential world, it's not as pronounced a concern as it is in the hospitality industry. Mainly it's not the studs themselves, the individual components. But without going too far down in the structural world, you know, out in the high seismic areas in California, the shear walls, which is a certain type of wall in the building that gets a layer of sheet steel over it prior to the drywall being applied in order to withstand the seismic loads, that is a sheet that fits the whole thing. Sometimes it can be on two, three or four walls in a room and so you're in a metal box, so to speak. And so yeah, it has an effect on Wi-Fi.

But when you're dealing with seismic design, those loads accumulate very significantly as you go up in height, five storeys 10 storeys, it starts getting some... so you need a lot of sheet steel in order to handle the load. But in a residential environment where you're building a house, you know, one, two, three storeys, the amount of shear load that's being collected over that smaller comparative height is going to be a lot less sheet steel and you can strategically place it to not interrupt your line of sight or be in such a way to block a signal for Wi-Fi. It's good for the designer to acknowledge that. It is a legit concern. But in the residential world, unless you're going to build a 10-storey tall house or a five-storey tall house, you know, most single unit homes, purpose of this webinar or townhomes or what have you that are just two, three storeys, the amount of sheet steel, that blocking sheet steel is minimal enough that it's not going to be a significant concern.

ROB: You're a tech guy. You use a lot of [crosstalk 00:38:15]

NAVNEET: ... both as a tech guy as well as a general contractor either, as we're building homes. By the way, I live in a teardown house in Los Altos right now. It's a wood construction built 50, 70 years ago. I mean, everything wood, that you can imagine. I tried installing Google mesh network here and even with three or four of those pods, I was not able to map it. So ultimately, what I was seeking was Ethernet wiring running so that I could have high quality repeater, Wi-Fi routers, and those individual spaces. And I've done it many times on many of my homes as well as our homes that we have built for clients. I think Ethernet routing, providing network is a great way to solve for any Wi-Fi or networking concerns besides the mesh network Wi-Fi, which are very common. I would say a very, very simple solution is running Ethernet. We've got 6k wiring, which we do anyways already for pretty much all our clients in all spaces, every bedroom and living room and spaces. It kind of minimizes or does away with the concern completely.

The other part I would say is we are designing many homes right now, single family homes, one storey, two storey in California here in Bay Area and not all walls are shear walls. I mean, it's not a box 90% of the time like Danny said. It is a concern if you're building tall buildings and extreme hillside situations and so on. But for the most part, you may have a shear wall here and a shear wall there or on the outside perimeter. So, by combining like, essentially, it's the context of the problem and then how you can address both of them I believe it's the way to go ultimately for superior performance in many categories and reasonable ways to address it.

ROB: Awesome. The next piece, which is a big one I think especially for homeowners, maybe more so even than in other spaces, but cost, that's probably the biggest. It's a pretty well-known fact, right? If you're building a house, it's probably the biggest expenditure you'll ever make in your entire life and you want to make sure that each and every element that you're putting into your home is taken care of with a lot of diligence and of course care and also has to be cost effective as well. So, let's talk about maybe first, the raw materials side of things. We saw the coil of steel that it came from. Navneet, maybe you can take this one. What's Livio's strategy when it comes to the raw material side of things and how you can stay competitive with the wood market?

NAVNEET: Yeah. Actually, I'm happy to talk about our cost structure. I was hoping Danny could talk about how is it in the US wood compared to steel? Typically, historically as he has seen it and then I'm happy to talk about our cost structure.

DANNY: In my experience, it really depends on where you are. And we'll focus on California where most of your work is. Up to this point, steel has been more expensive than wood and certainly in the commercial world. Some of that is the raw material cost and a lot of it is labor related. Sometimes union labor related depending on the situation, commercial framers are quite expensive on the metal framing side and less so on the cost difference certainly in residential. I can't speak to it specifically; you know what that delta is in California. But in the south, we build a lot in the south. The difference is less because the difference during the labor is not as pronounced from a residential carpenter versus a commercial carpenter. So, it's still a function more so of labor than anything else, particularly now with lumber prices increasing dramatically as they are. But I don't have any data on the tip of my tongue for delta cost in California.

NAVNEET: Great. So, historically speaking, when it comes to residential construction, predominantly, most of it is all wood framed and the primary reason for that is building with steel has been prohibitively expensive. And we have tried it many ways, looked at multiple ways to figure out why that is and ultimately, the labor is one of the big reasons and of course, the way it is also constructed. The methodology requiring several welding inspections on site and specialized inspections along with the specialized skill sets. It all adds up to the cost that is there. Our strategy at Livio is to meet or beat the prices of wood framed construction on every project that we take on. So, we actually give our clients transparent option, wood or steel and we will match the price of wood framing on our projects with our steel framing.

And the primary reason for that is we take advantage of several factors here. Our factory is located in India by design, by choice, which is India is one of the largest exporters of steel. And we buy straight from one of the largest companies there and as we grow, we will expand that network of other providers in India. We have access to, India is one of the lower cost labor markets and as a result of that, our labor costs are significantly lower than if we were to fabricate here in the US. I guess, which would still be cheaper than fabricating on the jobsite or wood framing carpentry labor on a job site. So, if you look at that, we are way down at the labor cost market. Of course, we go through all international inspections and certifications. So, we have overheads there because we want to make sure that all our products that we're shipping meet or beat all California building codes and other international building codes. So, we have expenses there and we also have shipping costs.

And the way we design our systems, the way we structurally engineer them, design them to fit in containers, we have specialized software that we actually inherited from Daniel's team, job site manufacturing, which is an extensive set of tools which allows us to optimize, make lots of optimizations in the entire manufacturing process including shipping optimizations and container optimizations to ultimately reduce and manage those costs. If you put all of this together, we meet or beat the cost of wood framing here in California today. And in future our panels as you're seeing a picture here, they will not just be empty steel panels that you're seeing here. We will pre-run electrical, pre-run plumbing, pre-run HVAC, possibly even install windows, in certain circumstances do exterior cladding, waterproofing, etc. and our panels will get richer and richer and richer and richer. And therefore, the amount of labor on the job site would reduce and hence improving cost performance even more as we go forward.

ROB: I mean, you brought it up just now, but in the interim, well, panels are being delivered to a job site in the residential space, thinking about steel as a skeleton, how do all the tissues and fibers and everything else get run in a steel structure where you're not fabricating all of that into the panel before you ship it?

NAVNEET: Yeah, great question. We are a company which is built upon technology. I think that's what I said at the beginning, right? We use advanced modelling tools. Revit is one of them. And using that, practically the entire building, every single component, system, subsystem, gets modelled 100%. Architectural, civils, structural, mechanical, electrical, plumbing, flooring, tiling, countertops, cabinets, painting, every single thing gets modelled 100%. So, we're practically building the building in a software model before we build it on site. And as a result, we identify how are all the plumbing pipes going to run? How are all the electrical wires going to run? And where exactly on top of the island in the kitchen dependent lights are going to hung and so on. So, all of that gets figured out well, well in advance in partnership with the client and the subcontractor. Those models are then translated into penetrations or punches in the framing well ahead of time. That's what we ship all ready. Completely all these panels that come... these pictures don't do justice to it, probably. You can see actually, you can see the holes in the panel.

ROB: A little bit. You can see a little bit, yeah.

NAVNEET: Yeah. So that's how it gets done. All the penetration, all the punches are figured out and they're pre drilled into the stud. So, it actually already reduces the job of the electrician or the plumber or the HVAC guy because all of that drilling that there guys typically would have to do on the job site, they are already done. So, it simplifies and expedites the process.

ROB: And Danny, I actually stole these photos from I think you guys. This is probably a project you did. What we're looking at is, I guess a flatbed that arrives at the job site. Can you walk us through how this actually gets installed and walk us through kind of how everything actually gets set in place?

DANNY: Sure. Actually, this slide is a really good way to demonstrate from a high-level perspective. The panels show up on the job site on flatbed trailer like you see. They're usually around 600 or 700 linear feet a panel on one load. They're hoisted in place typically by a crane. It could be a smaller piece of equipment on a smaller job site. This happened to be a multi-storey, multi-family that was sitting on top of like five levels of parking garage. So it was already 50 feet off the ground to start with so we used a crane. You pick the panels up--

ROB: It will be a hell of a house.

NAVNEET: You pick the panels up right off the trailer like you see. The top picture and the middle picture is the panel swinging into position. These are different panels, obviously. Then you can see a finished product landed right onto the floor. In this case, it's a concrete slab and a fix it down to the slab. Then go get the next panel and keep going. Typically, installing one or more than one of those trailers a day was a reasonable goal. You can get a project erected very quickly with panelization.

ROB: When people say panelization, I'm obviously looking at a finished panel here, there's panelization in wood construction also, right? I mean, that's been around for quite some time. I mean, I see the guys on the job sites frame out of wood panels section, then tilt them up into place, is there any difference between what I'm looking at here and kind of what I'd see on a job site that's already taking place in the United States?

DANNY: Not really. When you're doing it off site, and so your quality control is going to be much higher. So, the assurance that it's going to be correct is definitely different. But essentially, you're building walls and sections just like you are in residential and you're swinging them into place with hoisting rather than tilting them up into place. But there's a whole lot that goes into knowing which stud goes in which location in a particular wall panel and getting it right. And when you're doing this off site with a lot of the QC mechanisms and technology that Navneet has described, you can be assured that when the track or the panel shows up, everything goes where it is supposed to be. It's done right, it's straight, and it's true. But ultimately, both industries are just building sections of walls and swinging them in the place at a very basic level.

ROB: Got it. Got it. Okay. Yeah, I mean, ultimately Navneet, cost being kind of I guess, one of the primary drivers when people are making this sort of decisions, if somebody has a project right now that's, designed in wood, can you kind of walk through the process of if I already have something engineered, how can I actually make the change to LGS? And how do you work with clients in that regard?

NAVNEET: Yeah, great question. If it's already been engineered with wood, we can engineer it. We have in-house engineering on the structural side of things including MEP. We have mechanical, electrical, plumbing engineers on our team. We do complete design and make sure that it is highly coordinated with structural. So, it does need to go through a quick round of reengineering structurally because it will be a submission to the city. But we take care of it all and as part of our bundle pricing if we're going to be taking on the construction. We guarantee essentially that everything will work together and we will make it work together on the site as well.

One thing that I wanted to add as Danny was talking through it was, the panels that we make and ship, they come with instructions. They come with IKEA, like assembling instructions where the guys on the job site can very, very quickly identify the panel and put it in the right place as quickly as possible. As Danny hinted on it, it's extremely efficient. There's almost I would say, Danny if I'm not going overboard, but it's 75% time saving on a job site in assembling or building with steel, with LGS panels like in this fashion as opposed to traditionally stick framing it on the job site. A project that would have taken probably six weeks or eight weeks, probably can be done in two weeks. Danny, what do you think?

DANNY: Yeah, that's pretty accurate. Anywhere from two thirds to 75% and with fewer people. And that's a big factor now. Labor is hard to find in the States. And when you kind of mitigate that risk by doing a lot of the work off site so you can swing in with a four to eight-man panel through the entire project, a pretty sizable project with that, so you don't have to find... I'm sure you've all seen like a three-storey apartment wood frame buildings and then about 100 framers out there building it one piece at a time. That's a very difficult to manage jobs that way now just because of the way the labor market is. So, you're not only faster but with fewer people.

ROB: Awesome. There's part of this slide I've answered a couple questions that we've since gotten in from the audience. But I do want to remind everybody, you have got two options when asking questions. You can either type using the Q&A which we have a number of backlog questions now. Thank you for asking. Or you have the ability to also virtually raise your hand and I can call on you in that fashion as well and you can speak directly to us. One other question that did come in is, is Livio currently doing this as like building for mass production or is this being used primarily in cases of like custom single-family homes? And are there any limitations there?

NAVNEET: We are taking any building here in the Bay area that is either a client project or our own development project and we are doing light gauge steel framing for that, for any of those. We have several custom houses that we have. We also have an 18-unit townhome project in Sunnyvale for which we are producing at our factory. We also have a podium plus three storey four to six apartment building for which we will be manufacturing pretty soon here as well. So, I find it to be very versatile technology just like wood framing like Danny mentioned at the beginning of the session are very versatile. You have a structural engineering design and you build with wood. Similarly, you create a structural engineering design and you fabricate the right studs and tracks and other components and you frame with steel. There's nothing cookie cutter about it. Every building is completely custom. We prefabricate the parts and we make the panels for that building, any building.

ROB: That brings in another question that came in. Are you stocking any finished panels here locally or is everything custom fabricated to the specifications of an individual?

NAVNEET: Everything is custom fabricated to the specifications of individual home and we ship it basically just in time. So, we actually save a lot of time in the project because everything is pre-thought through during the design process. So, we have the ability to manufacture ahead of time and ship it such that the day the foundation is ready, the panels could be delivered on site and we can cut down the framing time from probably two months down to two weeks, so save significant time for any project that we're working on. But we ship 100% currently from India. We have the ability to do it with partners like Danny and others to have some specific components or something if we need it urgently. If there's modifications needed to be done, we can address them. So, we definitely have the backup options in place if when and in where we need it, but we ship 100% from India right now.

ROB: Got it. And Danny, I might actually probably come to you on this one. When it comes to your previous experience, are there any applications or any times where you've looked at a project and essentially said, "Hey, unfortunately, the constraints aren't here to use LGS". And if there are those instances, can you kind of walk folks through how those issues are mitigated?

DANNY: It does happen, has happened. Typically, what you're going to see is a really complex roof and people wanting to build that roof out of steel. If there was one building system that wood is probably still better from a connectivity perspective and ability to customize, it's really complex rooflines. Lots of dormers and over builds and multiple high-pitched environments. That's one reason we walked away from some complexity and that's the... we look at that as an advantage in working with you guys, Robin, Navneet and being able to have the knowledge to talk to each other and find trouble areas in design and help people, you know, steer them towards things that are maybe more cost effective and more friendly to the system. But it seems not the solution for every building on the planet. It could be, I wish it was.

ROB: Fair enough. I appreciate the candid response. Navneet, this one probably coming to you, Livio general contractor or if there's somebody who's using a general contractor, will Livio supply the panels for that construction?

NAVNEET: At the moment, we are basically installing all our panels ourselves. But in future we will sell the Livio building system as a building system, you know, the panel plus instructions to anybody who would like to install and make buildings with our product.

ROB: Got it. All right, well, we have one more minute here. I'm going to scroll through and see if I can pick a tough one for you guys. All right, so this one coming to Danny. Danny, when it comes to materials, finished materials that you'll actually see on the exterior of the house. I know we talked about this briefly. But I guess the biggest elements that I can think of that I'll elaborate on top of this question for is, roofing material, obviously is a big element of the house, windows and doors, and let's say the exterior facade material. Are there any differences or constraints that might be there when constructing out of LGS versus wood?

DANNY: Differences, yes. Constraints, no. It's basically method of attachment. You mentioned roof, if you put plywood on your roof trusses, on a wood frame building with wood trusses, you're going to hear guys up there with their [inaudible 01:00:52] pow, pow, pow, shooting the plywood onto the roof truss. In a steel scenario, they're going to be screwed down. So, you're using a method of screw attachment versus nail. So those types of small connectivity those are the differences but it's not a constraint. It's just a means and methods, I think.

ROB: Got it. Fair enough. We're just finishing up now. Navneet, Danny, was there anything else that came to mind that you'd like to share with whether they are current Livio customers or maybe future Livio customers? Anything that I missed that you guys like to share?

DANNY: I would just like to encourage everyone to give Livio a shot. There are a lot of people who have tried to do what they're doing unsuccessfully over time to break into that wood market using steel. It's a superior product but no one has ever put all the pieces together and I believe they've put the pieces together. So, if you don't want your house to burn down, then use Livio. That's my parting thought.

NAVNEET: Danny, thanks for that amazing, amazing shout out. I really appreciate it. We've been very thankful in our journey to have met Danny. I just want to take one minute to say how incredibly grateful we are to Danny and has his expertise, his advice, his support, and everything that he has done and his team have done to boost Livio, to get us to where we are. I'm just so thankful for that. Thank you, Danny.

ROB: Great. All right. Well, we finished just here at the hour, just about. Thank you guys for joining us and we'll be sending out... I don't know, I apologize that I don't know exactly who's going to be joining us next week. But as soon as I do, I'm sure everybody who's on this list shouldn't be able to get an invitation to next week's webinar series. Ultimately, the goal of this webinar series is to keep everybody as informed and ultimately to make as best educated decisions when it comes to constructing your new single-family home as possible. Hopefully, this particular series helps you in that process. Thank you everyone and thank you Navneet and thank you, Danny.

DANNY: Thanks guys.

ROB: All right. Take care.