SITE - Earnings call transcript Q1 2024 | SiteOne Landscape Supply, Inc.

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Operator

Good morning, and welcome to the SiteOne Landscape Supply First Quarter 2024 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Guthrie, CFO. Please go ahead.

John Guthrie

Thank you, and good morning, everyone. quarter slide press Relations presentation our at first and this portion our website a posted to investors.siteone.com. issued XXXX release earnings morning of We the Investor Executive Black, Strategy President, Development. Chairman Doug Executive and by today Scott Salmon, joined and I'm Chief Officer; and Vice our

risks and differ filings include our XXXX. earnings to release, risks and the uncertainties of subject the begin, we of actual that in call uncertainties results materially Reform statements projections. the with meaning could press the include Private are like to factors and and expectations Securities the Act in and everyone that to cause forward-looking These set Securities Before presentation remind forth statements from and the Litigation would our release today's I Commission. statements slide made during within Such Exchange

discuss our we call A our which Additionally, would in found over these will believe today's to Black. of the in to now evaluating reconciliation non-GAAP during in like be the performance. presentation. turn slide can earnings and measures I release be useful can Doug call, we measures

Doug Black

Thanks, Good morning, us you and joining John. for today. thank

overcoming quarter, weather achieve first net the sales positive execute price persistent markets well teams poor continued deflation daily and During good in commodity construction overall to and stronger growth our our to in sales. organic growth

April, pleased expand be exciting to year to half which to dampened of second the companies through We traditionally full States. first for including slower move in United selling able add believe in adjusted in Western for were we new growth nursery the EBITDA platform and Devil high-performing X an our during the product Mountain, the during also our were results will adjusted is lap SiteOne experienced we the So near-term quarter, we EBITDA price line declines XXXX. as that season the our margin

we and presence robust improved delivering we market our balance term expand commercial relationships pipeline, the have and With and while in product remain strong Through and as our acquisition for navigate and continue markets. build Both teams, capabilities strategy achieved our strong the sheet, market XXXX lines in SiteOne and ability talented operational their confident leader customer to teams our growth near initiatives, environment performance term. acquisition beyond. and exceptional world-class respective companies a and well-balanced current success to continued in the consistent and in business, our long

your quarter. by and will a unique in of taking update on position. from highlights more balance before sheet call the acquisition first start address will detail then quarter will and position walk through our you some with then overview to brief John our strategy, our market results today's Guthrie provide latest followed I an discuss and outlook I financial Salmon will liquidity our our back come and Scott strategy, questions. our

on of Canadian the we shown XX and across branches X and XXX distribution our states provinces. U.S. centers Slide footprint have to As than grown X more X earnings presentation,

larger and over landscaping wholesale We $XX size only Yet distribution estimate we of fragmented XX we are the products XX% Xx of a market. that industry billion competitor about nearest X than the the leader share clear through very our combined. have

remains growth our Accordingly, long-term opportunity significant.

across At on our in on product distributor wholesale full recreational lines mix repair balanced focused of excellent We construction balance construction. XX% geographically. as well have residential upgrade. and XX% market, the we new new a business also national commercial product only as maintenance, on XX% with and have focused the and line

our to and Overall, Our offer grow geographic this portfolio markets. acquisition multiple market for through Canada, balance suppliers us and softer customers the strategy while fill coverage in and to time. strengthens across over providing value important product mix, and resiliency our in U.S. product end avenues organically our lines broad and further create both

X. Slide to Turning

as we entrepreneurial customers is that local Our consistently company scale, deliver and superior way teams, to and the to talent industry, building support suppliers. and leverage strategy. to value functional a capabilities resources, the strategy in and We've largest our our experienced SiteOne in come our executing of our in have talented, all long

which SiteOne. We complemented our new more in new and highly further terrific company. true we create are capability to into product strategy, our talent all moves work have our geograph we and by to to our do our [ as markets stakeholders. commercial a to develop us for adds build portfolio initiatives remain fills These on initiatives value acquisition ] Accordingly, operational world-class into focused

growth Taken creates through shareholders and our EBITDA organic value strategy all acquisition growth, expansion. margin our superior together, for

to you of turn you consistent can EBITDA growth record X, the years our see strong and Slide growth and over last If organic expansion. acquisition solid performance track with and margin X

systems new the We to and to superior while done build for heavily conditions. have and our SiteOne for Shifting and teams capabilities our in customers this foundation suppliers. and create current technologies in to investing

a and commodity impact daily EBITDA which sales on adjusted organic temporary experiencing growth, margin. causes are deflation, We price negative gross margin

and negative subside in through our the operational ample improve and our initiatives. impact to second have we this half to our opportunities Longer increase term, expect commercial operating gross of We XXXX. margin leverage

acquisition, to strategy toward our margin drive Accordingly, EBITDA and organically revenue objective our longer-term both XX%. through our we adjusted expanding of remain while to confident growth, in XX%

since have We product of lines completed start all XX XXXX. now the across acquisitions

and with adding deals and this pipeline for robust, excellent ideas These remains and growth. to Our year more potential continue we integrate talent and strengthen support our companies new growth. to new expect of performance companies SiteOne

have of significant nature growing to share, acquisition a our to modest continue through come. we and many for market years industry our opportunity fragmented the Given

in primarily long through we categories. shows the landscape we have X hardscapes Slide and do which portfolio, the supplies runway especially ahead in filling that aim acquisition, to in our nursery, product

for over net our quarter markets next as I We well shown grew discuss of X. We our these acquisition. volume industry in our gain by Slide growth will in margin gross drive points decreased the our a acquisitions near-term our growth products continues profit organic result increases in with and X% This Overall, supplement PVC as first continued deflation decade. to the as gross filling X% line expectations as basis to on pricing the like systematically than to declined sales in demand. are the XX.X%. achieved quarter connected offset price driven sales continue highlights and sluggish to first added was XXX lines. product now the and expect Gross commodity sales our in market increased market companies to deflation best by more double-digit ongoing to and some the X% Organic pipe margin. X% X% cost other seed daily in headwind with quarter of share through with commodity very products our modest X% fertilizer, teams in

margin, XXXX, still aided in enjoying inflation gross tougher first were comparable. of price Additionally, the providing we significant which thereby a quarter

gross and our operate SG&A. increased margin companies gross higher first with of higher Acquisitions quarter the in margin as a mix our acquired

our SG&A costs business. a a XX.X%. This net in increased by basis by care the of our Our increase significant driven percentage sales base increase by XXX as and was health acquisitions in points to

good remainder of expect care base third as our stabilize during the in move gain quarters. second business SG&A through selling the season year, and the leverage expect health to the we We to on the main we and costs

to full expect XXXX. for we result, a year SG&A achieve operating the leverage As

a over achieve years commercial significant operational implement We our coming initiatives the further as have to our grow opportunity SG&A company. and we and leverage

gross our basis and XXX EBITDA to points affected short-term note by EBITDA for $XX the $XX.X capital quarter margin cash flow the and and margin overall of million as SG&A reduction the declined despite benefit to our initiatives with by our adjusted lower results. I EBITDA sales, supply million, seasonal versus the would Adjusted improved management. lower good the from for adjusted working financial XX% combination XXXX, higher that the in of quarter daily declined X.X%, chain of acquisitions organic operating quarter, first

In our while our system. transportation growth customers faster improving average, our also management brands inbound our label to freight grow than small terms we initiatives, through costs driving of in private continue

are future. the decline in we These should experiencing expanding contribute gross to that helping to XXXX and gross the in initiatives mitigate margin are margin

biolegal are focused this awareness marketing increase now executing customer Hispanic programs create our We of among and branches segment. to continue at important XX% to percentage

great disciplined revenue-generating making more our and sales among over also habits progress are in productivity We force outside establish CRM our sales as XXX leverage our we associates.

existing fleet. Continued leverage the both staff we delivery to to also business. point-of-sale rollout in of us offer Pioneer new develop and our of track has and in branch allows Acquisition better MobilePro functionality with dispatch plan to system, which allowed further gain while and delivery productivity service our our customer of us and increasing

and for sales customers to During good focus our the share we increase associates of us cultivating users This allowing continued our growing less digital helps siteone.com. activity. make market on more in regular progress creating transactional value on while our to and quarter,

continue functionality siteone.com, sales online our introduce of in goal We to ahead to double and new XXXX. are for

growth Taken all and achieve initiatives. drive gross continuing improve organic through capability increased together, our leverage to are our margin we operating to

front, in to added X sales I after as companies acquisition trailing excellent the the On mentioned, XX-month $XXX to we SiteOne. approximately added million with quarter our family

the a summary, With are grow years. an leveraging headwinds near-term for reputation, of for team, exceptional companies, our good balance for opportunities consistently long remain to managing broad acquisitions strong company relationships experienced through well In the best building and with improvement through positioned term. the and job our teams deep we sheet many doing many and our

Now John? the detail. will John more in through quarter walk you

John Guthrie

year deflation from Thanks, days in on daily period like quarter $XXX to net Doug. first price quarter. XX% which the increase deflation the of selling grass were reported commodity were down the I'll offset and quarter price year volume in X highlights first ], XX% million more prior [ fertilizer Slide as products. the a first of results. on increased same driven which Organic and by There begin with first PVC X% quarter, compared down products the quarters, pipe, was quarter the for fleet our XX commodity the sales and X% sales in We respectively. prior for prior than period. to was as X% was XX%, growth which Consistent

of be We the lap of third the XXXX decreases expect as price price moderate we fully deflation headwind XXXX. to but through quarter a

our sales X% Organic includes daily high of markets. Organic ice X% price fertilizer northern equipment, weather the price end products For growth the gains, now those melt due pipe the agronomic for deflation melt, growth lower markets. for more solid which many of to outdoor products, earlier to increased irrigation, products. and nursery, range. at start spring year fertilizer, products, sales includes accessories many strong daily control We events ice volume ] and quarter like resulting an the full XXXX, and [ to X% for products, many and and saw offset from in control lower than lighting first share the equipment, volume landscaping prices, same fiscal which market in market expect landscape which we prices end snow escape in due demand, key XX% for unfavorable construction for key to decreased more or quarter PVC for first products double-digit deflation

profit completed sales sales Geographically, daily markets in the $XX acquisitions way price weather. organic acquisitions to was prior growth organic in Acquisition spring benefited X% net the X to regarding from the more Gross lower margin XX.X%, by ] Midwest, impact Gross up. will approximately a period. attributable of from our for in basis organic was to to sales increase primarily Scott tough strategy saw we out [ in which lower as which in prices X% saw later quarter sales costs an from or double-digit offset We reflect $XXX positive decreased market to an first sales details Conversely, less growth. on earlier less comps acquisition the to favorable million our demand, we in due in X realization, points solid contributed the benefited our XXXX, Southeast of XXX first the rain provide rapid sales, the compared quarter. and and achieved to million, the year which relative positive rise regions call. start due inventory partially season. growth declines

the blurry in higher cost drop down. to [ market prices way headwind has a relative The on our created ] inventory

comparisons We margin are we expect headwinds into to the season. managing gross move selling as improve through the year-over-year and

both gross $XXX in points CapEx in increased of The general and percentage quarter XXXX. SG&A of fiscal a of primarily XX.X%. percentage due be first expenses, for and to the The sales XXXX our XXX administrative of year should first the or to million increased the quarter. acquisitions. basis sales margin quarter impact SG&A net XX% SG&A net comp increase a for as SG&A Selling, to as is

of in for base increased increase acquisitions, Excluding that health to our SG&A costs. with care most attributable business X%, an increase

For million The million change tax year effective to million primarily due XXXX for amount year in in an benefit tax in first tax the The recorded compared stock-based for quarter, $XX the the $X year prior of we million from recognized of XXXX benefit rate compensation. the was the approximately first the of period. were rate of to increase to to effective of tax for excess $X.X tax a was Excess of $X.X income XX.X% period. an compared the first for quarter approximately benefit XX.X% the quarter benefits period. prior compared prior

fiscal and recorded XXXX compared rate items tax as benefits. of million of loss discrete net period. net to a for year tax excluding a the such XXXX expect first for quarter We between the continue the year XX%, be effective loss $XX.X million prior We XX% of will excess to $X.X

was higher by offset partially net increase sales. loss reduced gross our attributable margin net to SG&A The and in our

diluted EBITDA effect $XX.X to $XX.X give compared Adjusted calculation XXX Our to year used for loss million margin common would $XX.X $XX.X securities quarter the million the any Adjusted not compared basis dilutive count shares per X.X%. decrease the million diluted of quarter first decreased share decreased any the The XX% points prior this year weighted do prior average as for of to million was net in period. for to share. inclusion EBITDA EPS period. XXXX the to

approximately flow the to improved was and capital net Now compared to year Slide increased to million provide cash shown sheet $XXX XX. I'd quarter working brief reduction on a million due of at as in used prior excess same year The cash first chain inventory. in build first like end on to $XXX balance end inventory investments $XX update the We capital million $XX for to seasonal The primarily compared was at in in in period. million in supply an approximately improved for the used from XXXX. cash lower Cash operations the decrease period. million replenishment a of statement the to resulting the million turns and Working approximately of the operations compared to was attributable capabilities. our decreased due $XXX approximately in of Inventory prior $X our made quarter first decrease quarter initiatives. to quarter replenishment primarily the

in with approximately of Leverage XX-month quarter $XXX the million was first the XXXX. the was our at quarter end trailing EBITDA, compared flat of quarter the end period to of the was first reflects decrease XXXX. which The of $XXX of investments in debt million decline the X.Xx same the the the year at acquisition end at compared our XXXX to period. of X first Net months prior approximately adjusted

X quarter, $XXX target debt Xx. EBITDA of of cash $XX consisted liquidity net capacity end available under ABL we hand million, $XXX to our available is on million At reminder, the leverage a our of in the range which to facility. adjusted and million approximately As had year-end approximately approximately

I over update on strategy. will for our to call now turn Scott an acquisition the

Scott Salmon

John. Thanks,

of approximately companies a trailing acquired to billion X $XXX added sales trailing net XXXX, acquired XX-month we As XX, with we Since XX-month shown companies for $X.X in XX combined on SiteOne. net have April Slide sales in million. approximately

acquisitions. Wholesale, ] we customers location to supplies supplies. and Adams single acquisitions bulk Eggemeyer our distributor provide landscape and you information Eggemeyer, acquired On XX to acquisition our landscape us the Antonio allowing to bulk most Slides on XX, recent of of of wholesale find complements April of Wilsey The San in XX, recent markets Turning will Texas. [ high-growth and Landscape our Austin, a

across California. On customers Mountain XX% XX with wholesale Devil and line of leader that our offering also in nursery in state. Wholesale our Devil California, states Mountain currently where April a call share. in completes the for a nursery full growth the a SiteOne team and in with grower spearhead The help across Mountain distributor product for interest remaining nursery but terrific will state addition Devil we products interest only transaction makes high-performing years. wholesale XX, market of locations in the a distribution and in have California of the acquired Pacific a nursery The Mountain Nursery, we company our very is Northwest not includes and put low the options future

and customers our providing and U.S. Our of toward products our full Canadian services line talent acquisitions forward terrific of all and us add continue landscape goal SiteOne major to a markets. to move in to

more Summarizing I XX, place all SiteOne for value commitment when to the strategy will business SiteOne our lines strong SiteOne. the outstanding to a across and geographies, and SiteOne of sheet confident to With team continue acquisition and to continues we we work passion on want and newly a year. entire their pipeline are great the companies robust able Slide adding for acquired significant joined to SiteOne balance create that welcoming for a family. to they making teams this thank be

call now will Doug. turn the to I back

Doug Black

continue up on our for Thanks, significantly not behind end our Scott. with markets our Slide we our commercial strong I'll and XXXX us, initiatives. executing has With months gaining and changed, outlook teams, market of expect XX. to operational share X wrap

demand. for this XXXX. rates, second for in of especially products construction, busy, which This should capitalizing year, to In continue XX% continued the on optimistic growth to we modestly end are end sales grow home in residential homes the and market, our shortage new landscaping Despite half. full interest and in builders the terms comprises markets, of expect solid produce of higher

solid we be remain of and is XXXX, continued to our our it represents teams Bidding positive, which has services be continued year. which construction, the full believe indicator demand. a from XX% good to sales, project in for steady commercial New slightly continues will activity of

backlogs market, remain continues to slightly and demand. Accordingly, and believe to up upgrade solid, down repair which XX% customer lower repair seems flat The our and this levels that be stabilized at be we have upgrade slightly but market expect commercial end be Our we to soft, of sales, year. to will the demand year. represents this of

represents growth we sales. XX% Lastly, which our volume strong category, maintenance in of have seen the

to market advantage end as prices the take levels lower continue this rates the expect XXXX. users contractors from We restore depressed of commodity XXXX and grow in single low digits and and in in to XXXX application

In pricing, than in deflation overall an terms been we had of persistent has product quarter. X% decline for bit this resulting previously money price a first expected, the more year

That said, decreases in the XXXX. be in This low in digits in margin growth the We organic commodity lap steady half deflation second offsetting acquisitions. as approximately mentioned, effect impact than deflation the now daily we the price year. year we our more our -- volume still expect to expect in gross for XXXX. we price price single to still similar by we Overall, X% expect of John XXXX backdrop the sales as with expect prices growth price for the negative now decline to and initiatives to with X% down to offset XXXX, moderate expected of the XXXX, the full be be

our as offsetting base negative than SG&A business, in SG&A higher drive the productivity acquisitions. achieve leverage of more improvements the in We to expect we impact

our to adjusted EBITDA improve year Accordingly, we in XXXX. margin full expect

million In Scott have through All SiteOne the as a terms factors add XXXX range expect to to from excellent range move million. continue pipeline EBITDA $XXX mentioned, This strong we companies the in unannounced contribution does family $XXX high-quality we any to to we continue as will and our year mind, full to fiscal of targets adjusted of factor these be not the of acquisitions. in year. we acquisitions, for

approach to contribution this and we recent an a acquisitions, navigate pressures the from we deflationary are While positive X environment. as conservative does include the take uncertain macroeconomic continuing

thank service. sincerely our commitment, In to like continue and teamwork to with selfless passion, all closing, associates me I amaze their SiteOne would who

open and joined their with all value increasing stakeholders. a so for them our allowing We us I as is to questions. an would us deliver customers and it thank to supporting team, have Operator, also for partner. be strongly we to the line tremendous honor please for our like be suppliers our for

Operator

The Blair. [Operator comes Instructions] Merkel question William first Ryan from with

Ryan Merkel

the guys quarter to first some off worse deflation because was wrong SG&A than the just wanted heavy the also little only first you then like that. as relative It deflation. the it's context like sounds to I'm start correct looks price getting and and as a expected. it's me it price But you SG&A curious, expect I'm it on in in quarter context some put Street. if I then miss did on

John Guthrie

came going thought be you to the general, factor in acquisitions. year the in for was SG&A, when where in we it

we X% there. claims, we several about say base as with line million have did a didn't, came -- was talked would in it general, perspective. little in us. -- our that that million health I largely business, couple dollars was in from that from higher only a As we in And But expectations grew mentioned, SG&A insurance we unexpected,

is I important remember, to quarter. think a it's shoulder this

-- spring carrying obviously, historically, was So it before more don't the season. have the because we sales, we're

leverage. of makes leverage the high, pretty operating So the that kind

Doug Black

will second back But the second level half. we of in the to come we the took to we leg the it but in at that. in the as in we pricing in it the thought did a And the another positive half of was thought would start of it was then we down further persistent more lap stabilizing the still think the pricing, hasn't. forecast than commodities. yes, in quarter, lower going deflation now some see PVC little our little year, stairstep that terms Pipe quarter. that second down more a Starting And -- in first

we to more, As year. that first the persistent X%. is for X% of reflects deflation course, margin. year affects full we And quarter. be we And that achieved down we from X%, that to a in range of put and against I going gross tough noted, the pricing I comp were last a mean guess, up the think I

price were Last balance the realization experiencing year, last year. the for in the material working us still we or first inflation. quarter had We

course, as went we that Of went year. through negative the

you're negative, only not of you're against comp the So up but year. the toughest

So those are factors. the

So a more -- had margin affected than little expected. gross was I would more we say it was little a

For the gross think the XXXX. full year, we being margin overall similar to

Ryan Merkel

That's it Okay. headline, the surprised that the I guide, didn't but makes When that, full you've context. helpful I sense. explained saw you was now lower year

just on gross Let me ask margins then.

I think, John, you the as said it flat would Should increase in should interpret just gross speak margins we have the maybe You and drivers. selling year-over-year, that up season. to XQ?

John Guthrie

Yes.

is high. I kind quarter, think getting we normal the also we see mentioned, I this product of then was we'll be our when year, increase improved, we getting seasonal than QX the as would margins. XXX we points our lines, in to in into started of very the much right quarter. the margins driver margins. we flat impact through closer QX, as selling gross deflation even the season gross see more into And went started to a hit think primary normal gross basis Last saw we kind selling And of we're of

be be in we rather XXX we're quarter. in be than to more that kind put the to normal basis will a this this so we'll more flat points and second expecting So of be closer year, the

Operator

comes question David next Baird. The from with Manthey

David Manthey

XX quarter, lower. margins us up be you gross told the John, last points On I it would in Street first gross had this But quarter. believe, basis issue, the margin

it? were So you a but wrong, where setting how aside, that to magnitude you like the relative margin? about far Street expectations were off were us of just issue gross your mismodeling relative to they it had how could give thinking Clearly,

John Guthrie

basis than first January we and lower We Most perspective. from in XX But our February realized pretty that of thought. the were the it significantly probably really of analysis. that about we've in in year XX months down already had points to X

David Manthey

quarter for I were digits Yes. the said up you And on the any ahead? or April we in would the imply acceleration through mid-single you be maybe finished base looking slight and then Can speaking January, about quarter. anything X% down overall, should of a which months, thinking comp you think else, trends you comment

Doug Black

Well, actually the month. looking now. the improved April, April like trend at we that's a going weaker. And little started through has It's out

So we that the going that I full when year how year to the volume -- season growth feel get think the about we're we we is that out, need full to and at look more the offset good for the offset playing inflation. volume than

still we're for the a organic year. job. forecasting Teams low good that. about pretty single-digit feel good So doing are growth We

up deflation we'll As low we'll noted, have for inflation or the X% positive and we year that end with single-digit growth. organic

good what together, see see, pretty the we we season. and -- the about March So When April spring year. those feel is we look at we

Operator

The Damian next question comes from Karas with UBS.

Damian Karas

what just for the for X in break commodities. for versus impacts the some year quarter. points Could expectation you you You shared all price entirety, in sense factoring out a of the in us? of the XX% thinking non-commodity for are product you kind down and of price the kind you just us that your first numbers give PVC fertilizer Could around the saw about

John Guthrie

that we built our don't price taken into -- we've changes most kind Yes. up coming I and I for the but that they already that specific are -- of season. be we've say noncommodity have of the into the current the known should price And model. see done I'll Well, breakout, products are changes are is have today we prices price what -- as

and take so based year that the once happen and So out extend those of them rest do on comparison. then those run they upon a we and generally the we year volumes for

than We haven't have lot into PVC year this that other and seen fertilizer line prices haven't year decreases been this standpoint. in from going another really seen relatively down a prices large stable there of pipe, we

built with price a for being are that's come then the and number into those of changes So extend -- year. our how the system with up known we that out the rest

Damian Karas

on is related getting Got largest fair you're it total Home sense. there's investor your business? just of it with going that been more ownership to thoughts questions front? how share change generally your the more obviously, M&A Depot, And impacting then lot see could you your on competitor acquired to makes us a see assume you that it. That Maybe to competition by and

Doug Black

been X SRS, is they I it Yes. start And Heritage, a division a landscape trying quickly. and is company. our trying the very there's owns X would were for they've No. a questions around I'll were to of to aggressive. of -- and market do just They in lot which -- part trying competitor has Yes, or build been which with build their that. to years,

So in for years. and they're have been force several out

the And competitive terms so just of et on the -- being cetera, more then cetera. in aggressive is terms in of front et one in competition, market also competitive of Heritage price, the competitors organic and

So dynamic we've them years, several really we that see for competing against wouldn't and been changing.

already They're if on spectrum, end you the of the will. aggressive

the owners and attractive. [ have XX% want The front, landscaping great know join we advantage building owner not because on M&A auction we still to ] that XXX% they -- are think there and a find SiteOne, On more focused they're of negotiated we're to some the company be and and deals an XX%, our we're situations. we and

run nature, that M&A to creates And the and then Home they're a them so Depot value. business, how run got we the team, to going organic as they've the they that continue continue. we And -- side. the we're again, it on of kind a most feel strong stand-alone believe going they're expect said to given side, their on would confident has to

they sponsors owned equity. strong creating business. value were before strong They much supporters funding and and the they could They -- were as those with as had by were heavily private

think Depot I exact will do Home thing. And same so the

Operator

comes Truist. The Keith next from Hughes question with

Keith Hughes

to issue. getting Just SG&A the back

little You of the we think, a year. to bit Would time half is least in quarter? Is the there enough getting talked the -- that about I the that to enough start year start second of leverage? Is more at second leverage, seeing for that see issue?

John Guthrie

the second into quarter. slightly the second selling better where we'll leverage slight half a Certainly, in weighted be flattish the to towards it get once position in much we some year, of could the be season,

Keith Hughes

increase the or specific drove Okay. deals that SG&A And in the there X on a the then significant pretty quarter, was any in X period?

Doug Black

our the of acquisition seasonal say, the a added did, some let's that we of nature to especially, The more acquisitions mix business. Pioneer

answer had the and deals north, heavily and or the summer of in kind be, in then and fall are of that summer toward a weighted take they're their up and a couple Pioneer fall. we happen the spring When season of kind the would later yes. those larger the all So you profits

that yes, impact. an So had

that business the hit health that shoulder kind claims. a a $X or million bigger The the other and that of unusual had We some that was quarter $X impact was claims million on base care effect. has in

So of there. a couple we things going on had

Keith Hughes

you're some even they Pioneer is the than Yes. your Pioneer, SiteOne? Are acquisitions heavy seasonal on more the point of rest of business? and To seasonal pretty a

Doug Black

They would be more seasonal, yes.

Operator

from Next Dahl Capital Markets. RBC question comes Mike with

Michael Dahl

you saying improvement clear First you if have one, then said side, another you saw I still that's in just on and your that the of wasn't think step expectation signs sequential bottoming the you commodities. I were ahead. seen in or maybe months down some already And pricing

pricing what on just you exiting into So maybe clarify seen a sequential basis of on you've kind and could April?

John Guthrie

Yes. QX. pricing in of then were and to If April positive on we basis far. a to X QX then in probably be improve so closer kind year-over-year a expecting in X%, to fourth X% number be quarter. We've seen And the would we it X in

Michael Dahl

if X%, down that you're flat that And is X% down year-on-year? effectively sequentially

John Guthrie

Yes.

X think general, I flattish In much would not think it year deflation. here regards to I sequentially, with be this is, seeing that we're dynamics as standpoint. bottoming from the one,

The not seeing on we're price standpoint. from going that many is increases is as dynamic that other

a of in low large single-digit we with with suppliers And very we decrease think relatively come increases significant standpoint. to a pipe where flat -- from that see -- the this which saw I lot PVC saw sequentially, quarter of down. really price in kind another relatively did thing in So only was we leg

Michael Dahl

Got it.

going in part but leverage overall sales layering relatively is side, SG&A your SG&A, sounds but this I'm like It just seem the now to to side. growth it on starting expectations gears, then it expectations, be organic versus was by shifting on you maybe and the large especially deal. to And are Street Okay. seems sorry to easiest your the like if what pricing limited a way be get than doesn't less ours or different out harp

just Maybe costs try other and business XQ, control there be M&A from on as So the generate or through business, us base taking XQ. on that think is in added leverage help you actions the of to base could talk year more you SG&A might little understand a kind that to the better. the -- you incremental through about the of that just it's elaborate whether kind coming

Doug Black

strong in on can we in business, get as in cover that a and they getting to the the the productive. than that we're of health in base SG&A. cost Well, good we're care, business. business, see make to we we in quarter because make and our steps more But leverage of in difference feel acquisitions, bigger we've layer right, base quarters going to that in leverage our we then extra significant And costs first the our there year. leverage leverage for much the Yes. sight that, achieve going And we're know We mentioned there. and shoulder but taken getting base like you're kind anticipate have do control there, we the SG&A we full labor confident

seasonal that base. of -- the initiatives year the of better into We're Some with acquisitions coming aspect last We around. we year. moves the our just did a

cost you're looks I so a think shoulder first. in like it overemphasizes Obviously, when worse. first were quarter And the quarter the in the we

that the every acquisition effect, achieve ability and about So by year have our the which overcome we good we year-end. leverage to feel

Operator

Matthew comes question next Barclays. The with from Bouley

Matthew Bouley

number then on Devil on Mountain parts. outright there would color I you that get health the Mike's you put it the from well. OpEx. forward, as SG&A question and past Following going but is how base assuming guess had of more up here Mike that assumption could a an decline if will into sort one, modeling hit issues little you play I I X on on care guide business think the this, mean, be these mentioned QX the margin profile and to

John Guthrie

of the from our -- be on year-over-year on probably rest likely that prior to the perspective. it a base year relative that that would expect year business, would We

year So business. be to yes, Devil is we not implementation should with Devil slightly necessarily to the factored. do expect up Mountain, of full throughout base regards I say, Mountain fully the rest our on P&L

the both business referenced just factored is is Mountain gross in or not from discussion factored margin [indiscernible] have that how in our guidance but Doug SG&A we detail close into the the and We why our our base got completely perspective. EBITDA the Devil since yesterday

Doug Black

Devil terrific Mountain for And say the we profitable business in again, business. acquisition at and a share higher Pacific It's excited of expand and nursery into gross also margin, which high But with one. a margin, a platform. certainly, expect as growth coverage is territories. done, of nursery excited we acquisitions as the said, not kind run to businesses business. higher that we right? and SG&A, also -- it's higher deal, but because in performing a we're nursery can it us strongly. a market We're our growth, low deal, we performer, gives run have gross contribute It into many us it's And help those get California team to It it. one Northwest, the very high a organic Mountain about bring Mountain the of hardscapes nice kind nursery Devil significant a a of with SG&A, that states higher can exciting we've us So they're the and but full leader will a -- that only they

like in So XXXX. we do us help feel it will

John we as mentioned, guide, deal. Our just did the

expect year our we impact to be guidance, full our EBIT would move outcome. a didn't certainly our full on -- profit positive we Mountain year Devil but So

Matthew Bouley

it. Got

just That's up markets. to helpful. end secondly, Okay. back And the then

I heard you past over side repair maybe correctly. existing of weeks mentioned a I and rates progression the less you slightly think be recovery and to course. potential upgrade interest home the if turnover, and Obviously, of here been down, little a there's few

you're point more what finer of landscaping the and So discretionary the business? repair just with seeing any on upgrade portion of sort

Doug Black

Yes.

last upgrade. it and repair is We kind year. call stable? levels? that it I'd we've seen sluggish this year, think it, market coming down stable. I of it's been think Is the of but kind lower What was Obviously, into

we to be it of so kind will levels. continue consistent feel like And at low

the further. up. lower ends it do how the see We it down. levels, guess, If math, slightly I up it sum you don't I dropping stable is at It's would

Operator

Carter comes with Andrew question next from The Stifel.

W. Andrew Carter

if the hurt the of gross tailwind? it top South maintenance precipitation, line, basis weather It kind about also did if XXX mix, Wanted precipitation. so, think, hurt Was of you ask maintenance. margin you well as how for the the And weather that net to estimate? I it much products the heavy but an in the into the more the of mentioned then absent you was have a quarter. And this in overall helped Because the had quarter? points terms

John Guthrie

by weather. I We a estimate. don't bifurcated haven't specific have

on the the year had because negatively pretty they in strong of hit up specifically impacted, very coming here weather, also in strong [ Southeast in weather. You were they important products, ] in the things. Midwest, warmer somewhat were I would last and Florida say landscape marches Northeast,

was by but There selling it. a season bit very to honestly have weather way. a like mix, it's of bifurcate that don't the this quarter we So a difficult little before

W. Andrew Carter

And second then question on a the M&A.

a Devil platform. done That's Mountain million You've now. plus $XXX

did just You Pioneer.

bolt-ons? just $XXX large if deals? you this kind independently longer? term? I million, to Or was digesting there, with kind another capacity you're do wrong Mountain think do size near Does have it of of platforms they And me kind a only the of correct Can kind X it the platform, of year. Does swallow do in I'm could pretty run be your more what's this? in you -- to capacity Devil

Doug Black

deals companies the last integrated all XX deals We the Yes. smaller and No, interesting It's year. larger same to integrate. how great question. take things

us at focus we've business space, there. are gotten terrific helping that Pioneer They their team. We've got that. some that. We part a had on the quite great good is really very leaders well. going brought in specifically that in southern of a solid So

well. going that's so And

or that's stand-alone, right, learn we and as it so for a do of they Devil them as call run kind Mountain them will did how You typically run we learn and let us. we year deals

we're to there that away. good lighter And a capture so although touch, we'll on going there's be really right synergies

very taken manageable to system like large in, we're we're and -- executing or so of come equivalent companies, it's that And in manageable. might of all whatever, the it's and the still ones XX integrating them XX but together, very X our be

the feel on Pioneer line years about are this the we've while ]. as not capability year. system-wise, working may further and integrate is together for system-wise we by we -- that So good that. way, all the them several Mountain down Devil got is We'll [ But line. Pioneer, partners. running planned And the integrate down we're

so And manageable. again, all very

Scott Salmon

different different One other also with of they're business. thing add I'd and lines leadership in geographies is different

well versed integrating So in is very our leadership these.

there's no as it overlap ease helps there, which well. So

Operator

closing This back remarks. the conference over concludes our Black question-and-answer session. I would to like Doug any turn for to

Doug Black

associates your our in be quarter. and all doing, suppliers for you Thank customers again, us. thank our to, helping We to and they're for look appreciate Okay. to the next want you, thank interest again I SiteOne, us you. joining successful. Thank and our much you all for to again after very speaking terrific forward

Operator

conference now presentation. The for you concluded. attending has Thank today's

You may now disconnect.

SiteOne Landscape Supply (SITE) 1 May 242024 Q1 Earnings call transcript