First Quarter 2024 Highlights (Compared to First Quarter
2023):
- Net sales increased 8% to $904.8 million
- Organic Daily Sales increased 1%
- Gross profit increased 5% to $301.2 million; gross margin
contracted 100 basis points to 33.3%
- SG&A as a percentage of Net sales increased 140 basis
points to 36.2%
- Net loss of $19.3 million, compared to Net loss of $4.5 million
in the prior year period
- Adjusted EBITDA decreased 47% to $21.1 million; Adjusted EBITDA
margin was 2.3%
- Operating cash flow improved by $53.3 million
Post-Quarter Highlights
- Closed two acquisitions: Eggemeyer and a 75% interest in Devil
Mountain Wholesale Nursey
SiteOne Landscape Supply, Inc. (the “Company” or “SiteOne”)
(NYSE: SITE) announced earnings for its first quarter ended March
31, 2024 (“First Quarter 2024”).
“During the first quarter of 2024 we experienced continued
significant commodity pricing deflation which dampened our
near-term results. Against this headwind we were pleased to achieve
positive Organic Daily Sales growth, good Net sales growth, and
improved operating cash flow for the quarter,” said Doug Black,
SiteOne Chairman and CEO. “We were also pleased to add two more
companies to our family in April including Devil Mountain Nursery,
a terrific new nursery platform for growth in the West. We believe
that end-market demand is solid across most of our product lines,
and we are confident in our ability to outperform the market and
achieve positive volume growth through our commercial and
operational initiatives. Our acquisition pipeline remains very
active, and we continue to leverage our exceptional teams, market
leadership position, and strong balance sheet to further build our
company and execute our long-term strategy for performance and
growth.”
First Quarter 2024 Results
Net sales for the First Quarter 2024 increased to $904.8
million, or 8%, compared to $837.4 million for the prior-year
period. Organic Daily Sales increased 1% compared to the prior year
period due to solid demand, partially offset by price deflation for
commodity products. Acquisitions contributed $62.5 million, or 7%,
to Net sales growth for the quarter.
Gross profit increased 5% to $301.2 million for the First
Quarter 2024 compared to $287.1 million for the prior-year period.
Gross margin decreased 100 basis points to 33.3% for the First
Quarter 2024 primarily due to lower price realization, partially
offset by a positive impact from acquisitions.
Selling, general and administrative expenses (“SG&A”) for
the First Quarter 2024 increased to $327.7 million from $291.4
million for the prior-year period. SG&A as a percentage of Net
sales increased 140 basis points to 36.2% due primarily to the
impact of acquisitions.
Net loss for the First Quarter 2024 was $19.3 million, compared
to a Net loss of $4.5 million for the same period in the prior
year, as higher Net sales were offset by lower gross margin and
higher SG&A expense. Adjusted EBITDA decreased 47% to $21.1
million for the First Quarter 2024, compared to $39.8 million for
the prior-year period. Adjusted EBITDA margin decreased 250 basis
points to 2.3%.
Net debt, calculated as long-term debt (net of issuance costs
and discounts) plus finance leases, net of cash and cash
equivalents on our balance sheet as of March 31, 2024, was $508.0
million compared to $586.1 million as of April 2, 2023. Net debt to
Adjusted EBITDA for the last twelve months was 1.3 times which was
unchanged compared to the prior year period.
Outlook
“We have seen commodity price deflation continue through April
and expect it to persist into the third quarter. For the full year
2024 we expect prices to be down approximately 2%, which is at the
high end of our initial 1% to 2% range,” Doug Black continued. “In
total, end market demand has been solid, and with the benefit of
our commercial initiatives, we continue to expect sales volume to
more than offset price deflation, yielding low single digit Organic
Daily Sales growth for the full year 2024. With the benefit of our
operational initiatives, SG&A management, and contribution from
our acquisitions, we expect to increase adjusted EBITDA margin
during the year.”
For Fiscal 2024, we continue to expect our Adjusted EBITDA to be
in the range of $420 million to $455 million, which is unchanged
from our previous guidance. Our guidance does not include any
contributions from unannounced acquisitions.
Reconciliation for the forward-looking full-year 2024 Adjusted
EBITDA outlook is not being provided, as the Company does not
currently have sufficient data to accurately estimate the variables
and individual adjustments for such reconciliation.
Conference Call Information
SiteOne management will host a conference call today, May 1,
2024, at 8:00 a.m. Eastern Time, to discuss the Company’s financial
results. The conference call can be accessed by dialing
844-825-9789 (domestic) or 412-317-5180 (international), or by
clicking on this link for instant telephone access to the call. A
telephonic replay will be available approximately two hours after
the call by dialing 844-512-2921, or for international callers,
412-317-6671. The passcode for the live call is 3726760 and for the
replay it is 10187673. The replay will be available until 11:59
p.m. (ET) on May 15, 2024.
Interested investors and other parties can listen to a webcast
of the live conference call by logging onto the Investor Relations
section of the Company's website at http://investors.siteone.com.
The online replay will be available for 30 days on the same website
immediately following the call. A slide presentation highlighting
the Company’s results and key performance indicators will also be
available on the Investor Relations section of the Company’s
website.
To learn more about SiteOne, please visit the company's website
at http://investors.siteone.com.
About SiteOne Landscape Supply, Inc.
SiteOne Landscape Supply, Inc. (NYSE: SITE), is the largest and
only national full product line wholesale distributor of landscape
supplies in the United States and has a growing presence in Canada.
Its customers are primarily residential and commercial landscape
professionals who specialize in the design, installation and
maintenance of lawns, gardens, golf courses and other outdoor
spaces.
Forward-Looking Statements
This release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may include, but are not limited to,
statements relating to our 2024 Adjusted EBITDA outlook and our
share repurchase program. Some of the forward-looking statements
can be identified by the use of terms such as “may,” “intend,”
“might,” “will,” “should,” “could,” “would,” “expect,” “believe,”
“estimate,” “anticipate,” “predict,” “project,” “potential,” or the
negative of these terms, and similar expressions. You should be
aware that these forward-looking statements are subject to risks
and uncertainties that are beyond our control. Further, any
forward-looking statement speaks only as of the date on which it is
made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on
which it is made or to reflect the occurrence of anticipated or
unanticipated events or circumstances. New factors emerge from time
to time that may cause our business not to develop as we expect,
and it is not possible for us to predict all of them. Factors that
may cause actual results to differ materially from those expressed
or implied by the forward-looking statements include, but are not
limited to, the following: cyclicality in residential and
commercial construction markets; general business, financial
market, and economic conditions; seasonality of our business and
its impact on demand for our products; weather and climate
conditions; prices for the products we purchase may fluctuate;
market variables, including inflation and elevated interest rates
for prolonged periods; increases in operating costs; public
perceptions that our products and services are not environmentally
friendly or that our practices are not sustainable; climate,
environmental, health and safety laws and regulations; hazardous
materials and related materials, laws and government regulations
applicable to our business that could negatively impact demand for
our products; competitive industry pressures, including competition
for our talent base; supply chain disruptions, product or labor
shortages, and the loss of key suppliers; inventory management
risks; ability to implement our business strategies and achieve our
growth objectives; acquisition and integration risks, including
increased competition for acquisitions; risks associated with our
large labor force and our customers’ labor force and labor market
disruptions; retention of key personnel; construction defect and
product liability claims; impairment of goodwill; adverse credit
and financial markets events and conditions; inefficient or
ineffective allocation of capital; credit sale risks; performance
of individual branches; cybersecurity incidents involving our
systems or third-party systems; failure or malfunctions in our
information technology systems; security of personal information
about our customers; intellectual property and other proprietary
rights; unanticipated changes in our tax provisions; threats from
terrorism, violence, uncertain political conditions, and
geopolitical conflicts such as the ongoing conflict between Russia
and Ukraine; the conflict in the Gaza Strip, and unrest in the
Middle East; risks related to our current indebtedness and our
ability to obtain financing in the future; financial institution
disruptions; risks related to our common stock; and other risks, as
described in Item 1A, “Risk Factors”, and elsewhere in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2023, as
may be updated by subsequent filings under the Securities Exchange
Act of 1934, as amended, including Forms 10-Q and 8-K.
Non-GAAP Financial Information
This release includes certain financial information, not
prepared in accordance with U.S. GAAP. Because not all companies
calculate non-GAAP financial information identically (or at all),
the presentations herein may not be comparable to other similarly
titled measures used by other companies. Further, these measures
should not be considered substitutes for the information contained
in the historical financial information of the Company prepared in
accordance with U.S. GAAP that is set forth herein.
We present Adjusted EBITDA in order to evaluate the operating
performance and efficiency of our business. Adjusted EBITDA
represents EBITDA as further adjusted for items permitted under the
covenants of our credit facilities. EBITDA represents our Net
income (loss) plus the sum of income tax (benefit) expense,
interest expense, net of interest income, and depreciation and
amortization. Adjusted EBITDA represents EBITDA as further adjusted
for stock-based compensation expense, (gain) loss on sale of assets
and termination of finance leases not in the ordinary course of
business, financing fees as well as other fees and expenses related
to acquisitions, and other non-recurring (income) loss. Adjusted
EBITDA does not include pre-acquisition acquired Adjusted EBITDA.
Adjusted EBITDA is not a measure of our liquidity or financial
performance under U.S. GAAP and should not be considered as an
alternative to Net income, operating income or any other
performance measures derived in accordance with U.S. GAAP, or as an
alternative to cash flow from operating activities as a measure of
our liquidity. The use of Adjusted EBITDA instead of Net income has
limitations as an analytical tool. Because not all companies use
identical calculations, our presentation of Adjusted EBITDA may not
be comparable to other similarly titled measures of other
companies, limiting its usefulness as a comparative measure. Net
debt is defined as long-term debt (net of issuance costs and
discounts) plus finance leases, net of cash and cash-equivalents on
our balance sheet. Leverage Ratio is defined as Net debt to
trailing twelve months Adjusted EBITDA. Free Cash Flow is defined
as Cash Flow from Operating Activities, less capital expenditures.
We define Organic Daily Sales as Organic Sales divided by the
number of Selling Days in the relevant reporting period. We define
Organic Sales as Net sales, including Net sales from newly-opened
greenfield branches, but excluding Net sales from acquired branches
until they have been under our ownership for at least four full
fiscal quarters at the start of the fiscal year. Selling Days are
the number of business days, excluding Saturdays, Sundays, and
holidays, that SiteOne branches are open during the relevant
reporting period.
SiteOne Landscape Supply,
Inc.
Consolidated Balance Sheets
(Unaudited)
(In millions, except share and
per share data)
Assets
March 31, 2024
December 31, 2023
Current assets:
Cash and cash equivalents
$
41.5
$
82.5
Accounts receivable, net of allowance for
doubtful accounts of $26.9 and $27.3, respectively
528.5
490.6
Inventory, net
933.6
771.2
Income tax receivable
2.8
—
Prepaid expenses and other current
assets
73.6
61.0
Total current assets
1,580.0
1,405.3
Property and equipment, net
252.1
249.4
Operating lease right-of-use assets,
net
380.5
388.9
Goodwill
485.2
485.5
Intangible assets, net
266.9
280.8
Deferred tax assets
5.3
5.3
Other assets
11.4
13.7
Total assets
$
2,981.4
$
2,828.9
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
390.9
$
270.8
Current portion of finance leases
23.7
21.8
Current portion of operating leases
83.4
83.6
Accrued compensation
52.5
74.2
Long-term debt, current portion
5.3
5.3
Income tax payable
—
8.0
Accrued liabilities
114.2
114.6
Total current liabilities
670.0
578.3
Other long-term liabilities
10.3
11.5
Finance leases, less current portion
77.8
69.8
Operating leases, less current portion
304.7
313.3
Deferred tax liabilities
2.1
2.3
Long-term debt, less current portion
442.7
367.6
Total liabilities
1,507.6
1,342.8
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01;
1,000,000,000 shares authorized; 45,520,704 and 45,404,091 shares
issued, and 45,198,683 and 45,082,070 shares outstanding at March
31, 2024 and December 31, 2023, respectively
0.5
0.5
Additional paid-in capital
610.7
601.8
Retained earnings
897.0
916.3
Accumulated other comprehensive income
2.3
4.2
Treasury stock, at cost, 322,021 and
322,021 shares at March 31, 2024 and December 31, 2023,
respectively
(36.7
)
(36.7
)
Total stockholders' equity
1,473.8
1,486.1
Total liabilities and stockholders'
equity
$
2,981.4
$
2,828.9
SiteOne Landscape Supply,
Inc.
Consolidated Statements of
Operations (Unaudited)
(In millions, except share and
per share data)
Three Months Ended
March 31, 2024
April 2, 2023
Net sales
$
904.8
$
837.4
Cost of goods sold
603.6
550.3
Gross profit
301.2
287.1
Selling, general and administrative
expenses
327.7
291.4
Other income
4.2
4.0
Operating loss
(22.3
)
(0.3
)
Interest and other non-operating expenses,
net
6.7
6.9
Loss before taxes
(29.0
)
(7.2
)
Income tax benefit
(9.7
)
(2.7
)
Net loss
$
(19.3
)
$
(4.5
)
Net loss per common share:
Basic
$
(0.43
)
$
(0.10
)
Diluted
$
(0.43
)
$
(0.10
)
Weighted average number of common
shares outstanding:
Basic
45,263,984
45,045,851
Diluted
45,263,984
45,045,851
SiteOne Landscape Supply,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
Three Months Ended
March 31, 2024
April 2, 2023
Cash Flows from Operating Activities:
Net loss
$
(19.3
)
$
(4.5
)
Adjustments to reconcile Net loss to net
cash used in operating activities:
Amortization of finance lease right-of-use
assets and depreciation
16.9
15.5
Stock-based compensation
10.5
8.6
Amortization of software and intangible
assets
16.0
15.3
Amortization of debt related costs
0.3
0.3
Gain on sale of equipment
(1.0
)
(0.4
)
Other
(1.5
)
(3.2
)
Changes in operating assets and
liabilities, net of the effects of acquisitions:
Receivables
(38.1
)
(39.3
)
Inventory
(160.9
)
(168.2
)
Income tax receivable
(2.8
)
(3.1
)
Prepaid expenses and other assets
(8.9
)
(14.8
)
Accounts payable
121.0
81.8
Income tax payable
(8.0
)
—
Accrued expenses and other liabilities
(23.5
)
(40.6
)
Net Cash Used In Operating
Activities
$
(99.3
)
$
(152.6
)
Cash Flows from Investing Activities:
Purchases of property and equipment
(8.9
)
(7.1
)
Acquisitions, net of cash acquired
—
(33.2
)
Proceeds from the sale of property and
equipment
1.6
0.7
Net Cash Used In Investing
Activities
$
(7.3
)
$
(39.6
)
Cash Flows from Financing Activities:
Equity proceeds from common stock
2.6
1.1
Repurchases of common stock
—
(0.6
)
Repayments under term loan
(1.0
)
(0.6
)
Borrowings on asset-based credit
facility
158.2
298.3
Repayments on asset-based credit
facility
(82.1
)
(85.3
)
Payments on finance lease obligations
(5.8
)
(3.9
)
Payments of acquisition related contingent
obligations
(1.8
)
(1.6
)
Other financing activities
(4.4
)
(4.0
)
Net Cash Provided By Financing
Activities
$
65.7
$
203.4
Effect of exchange rate on cash
(0.1
)
—
Net change in cash
(41.0
)
11.2
Cash and cash equivalents:
Beginning
82.5
29.1
Ending
$
41.5
$
40.3
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the year for interest
$
6.0
$
6.0
Cash paid during the year for income
taxes
$
1.1
$
1.2
SiteOne Landscape Supply,
Inc.
Adjusted EBITDA to Net Income
(Loss) Reconciliation (Unaudited)
(In millions)
The following table presents a
reconciliation of Adjusted EBITDA to Net income (loss):
2024
2023
2022
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Reported Net income (loss)
$
(19.3
)
$
(3.4
)
$
57.3
$
124.0
$
(4.5
)
$
(0.9
)
$
73.3
$
140.7
Income tax expense (benefit)
(9.7
)
(5.0
)
17.5
40.0
(2.7
)
(4.6
)
22.9
44.8
Interest expense, net
6.7
6.5
6.4
7.3
6.9
5.5
5.6
4.6
Depreciation and amortization
32.9
34.6
31.3
31.0
30.8
31.6
27.4
23.1
EBITDA
10.6
32.7
112.5
202.3
30.5
31.6
129.2
213.2
Stock-based compensation(a)
10.5
5.0
5.0
7.1
8.6
4.3
4.5
5.8
(Gain) loss on sale of assets(b)
(1.0
)
(0.1
)
(0.2
)
0.2
(0.4
)
0.2
(0.7
)
(0.2
)
Financing fees(c)
—
—
0.4
0.1
—
—
0.1
0.2
Acquisitions and other adjustments(d)
1.0
2.3
2.1
1.5
1.1
2.8
2.5
3.0
Adjusted EBITDA(e)
$
21.1
$
39.9
$
119.8
$
211.2
$
39.8
$
38.9
$
135.6
$
222.0
_______________________________
(a)
Represents stock-based compensation
expense recorded during the period.
(b)
Represents any gain or loss associated
with the sale of assets and termination of finance leases not in
the ordinary course of business.
(c)
Represents fees associated with our debt
refinancing and debt amendments.
(d)
Represents professional fees, retention
and severance payments, and performance bonuses related to
historical acquisitions. Although we have incurred professional
fees, retention and severance payments, and performance bonuses
related to acquisitions in several historical periods and expect to
incur such fees and payments for any future acquisitions, we cannot
predict the timing or amount of any such fees or payments. These
amounts are recorded in Selling, general and administrative
expenses in the Consolidated Statements of Operations.
(e)
Adjusted EBITDA excludes any earnings or
loss of acquisitions prior to their respective acquisition dates
for all periods presented.
SiteOne Landscape Supply,
Inc.
Organic Daily Sales to Net
Sales Reconciliation
(In millions, except Selling
Days; unaudited)
The following table presents a
reconciliation of Organic Daily Sales to Net sales:
2024
2023
Qtr 1
Qtr 1
Reported Net sales
$
904.8
$
837.4
Organic Sales(a)
840.7
835.8
Acquisition contribution(b)
64.1
1.6
Selling Days
64
64
Organic Daily Sales
$
13.1
$
13.1
_______________________________
(a)
Organic sales equal Net sales less Net
sales from branches acquired in 2024 and 2023.
(b)
Represents Net sales from acquired
branches that have not been under our ownership for at least four
full fiscal quarters at the start of the 2024 Fiscal Year. Includes
Net sales from branches acquired in 2024 and 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501125731/en/
Investor Relations: SiteOne Landscape Supply, Inc.
Investor Relations 470-270-7011 investors@siteone.com
SiteOne Landscape Supply (NYSE:SITE)
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