CNM - Earnings call transcript Q1 2025

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Operator

Good morning, everyone, and welcome to the Core & Main Q1 2024 Earnings Call. My name is Angela, and I will be coordinating your call today. [Operator Instructions]

I will now hand you over to your host, Robyn Bradbury, Senior Vice President of Finance and Investor Relations, to begin. Please go ahead.

Robyn Bradbury

you. Thank everyone. morning, Good Bradbury, Core President & Robyn Investor Finance Relations for Main. Senior is of Vice and This

We are call. excited morning for to have you fiscal first join XXXX quarter earnings our us this

Chair a results I'm by then highlights. by Mark our outlook, of session. call Financial joined Chief Mark our and discuss XXXX today's Executive Steve followed lead an Steve our will Witkowski, will today Officer. updated with Officer; fiscal and Q&A LeClair, first and financial Chief our overview execution quarter

We Steve's will closing remarks. the call conclude with

We posted issued Investor of morning our earnings press website. release Relations a this and our the presentation to section

our reminder, a during the and include press As the statements made release, presentation statements. forward-looking call

our subject uncertainties release risks risks and Such the are factors actual and that uncertainties statements Exchange include results our forth in to Securities press and materially earnings expectations and in our Commission. the projections. cause These with from filings set and could to differ

We assessing which will reconciliation measures also discuss in are can appendix business. release in of be presentation. operating our of the of the useful investor our A these and found measures, our believe we press results earnings certain non-GAAP financial in

interest the for and in Main. you now & turn your Thank Executive Officer, will call I Chair to LeClair. over Core Chief Steve

Stephen LeClair

morning, Good joining us today. you Robyn. everyone. Thanks, for Thank

nationwide. water, contractors overview markets residential of our companies and position. distributor Core water market If nonresidential you're is across products storm following X leading serving along municipal, and with fire our protection specialty investor of private Page with & presentation, I'll drainage professional begin end an municipalities, on a and Main wastewater,

replacement infrastructure. in of used and construction protection and specialty Our water and products are the fire maintenance, services repair,

sizes. associates breadth local relevant branch national customer-specific Main and extensive to approach project sales We capabilities. with take for larger And provide and convenient with all smaller, familiarity management projects regional customers expertise. of partner solutions customers services, Customers serve locations with local a municipal and specifications, consultative for or & products Core our knowledge, of both industry our

our way We processes, design involved the planning completion. through are in all often project customers' from project

across and XX,XXX footprint more a suppliers base Our of states, of a X,XXX critical XXX which as diverse between link XX approximately over than serves customers. consists branches

estimate We industry fragmented XX% Accordingly, have leader, only an is are long-term yet significant. $XX we of growth we addressable a share opportunity our market. billion

Turning X. to Page

an the with indicative performance record We start quarter This geographies. to sales selling XXXX. XX% billion. end of are our fiscal of in Net was grew to some season to a earlier $X.XX start volumes and Northern supportive pleased market first

Residential lot a development volumes improved fourth sequentially than a basis. year residential on quarter. first This the more in year-over-year that from the was quarter improved

backlog bidding are activity We encouraged and our market. across by this

We're activity construction nonresidential across seeing solid landscape. the

space strong, like remain plants other others be to as in office and projects, continue large While highway soft, projects. market manufacturing such some verticals centers, and and industrial battery street this retail, data

projects funded of their the Act We the seeing certain Infrastructure good are and our an relatively scope, bid by coming momentum of backlog during in way the Though important in part small and activity we are Jobs in still projects being into construction and make country. municipal online bidding parts season. seeing also Investment

and These water service to projects plant new treatment are primarily facilities replacements. related line

upgrade While seeing we on activity. progress the year. incremental we're appear benefit municipal far this are it seen utilizing major pleased to limited not see we've funding, any does federal projects so And and repair

to products highlighting the geographic product, of growth customer the the execution volume to industry. products throughout and of drive growth. and quarter XX% achieved supplemented adoption in our our the in was metering We new deliver quarter, initiatives expansion above-market by growth ability Market technologies this

projects new are we in reflects some magnitude growth awarded. being bid the pleased and supply chain meters, this for with improvement of While the

the the initiatives, a it add sales greenfields of new and our and branch, we Beyond offer expand reduce giving reach takes performing product to evaluating our earn us new our add for we resources are and to locations pipeline are also time Every value mature time continues customers. enhances Each average share. market greenfields recent opportunities, well. our to we the of opportunity additional proposition, This into. our us actively to growth

of our opportunities. Acquisitions continues are long-term strategy, an active growth of on our part execute team and an important to pipeline

new added new of team, to During of the five we to and acquisitions & talent. Core access offer key date. and which These one complementary businesses lines our to product acquisition to after the Main addition geographies, was expansion quarter, largest the

Gross XX.X% the in prior margin in came year. at XX.X% versus

as were by be product you impacted and underlying various financial through margins our strong, gross and expected, to his commentary. sourcing M&A. margins label of the margins later initiatives from private continue robust in impacting While the performance Mark walk benefits will components supported

with cash allocation $XX million operating pleased We in capital priorities. achieved quarter. the flow first our flow to the and were Turning cash of

of generate pattern the the of we our our needs for seasonal Given second of working half in most cash business, capital typically the year.

quarter this our a resulting lower-than-normal reflects inventory seasonal continued build inventory optimization from generation cash efforts. Our

returning We to capital between inorganic growth capital organic opportunities to allocation shareholders. continue as and as balance well

$XXX we to During deployed X and quarter, businesses. million acquire after the first complementary over

our fleet, and tools us prioritizing benefit will investments upgrading to that and also facilities addition in in XXXX organic are technology in beyond. greenfields, We

by strong capacity to in flow, and acquisitions sheet cash underpinned our balance organic ability operating liquidity. invest Our growth and is value-creating

storm wide the of out of highlight Core to variety we and Virginia businesses & the of added X, Main recently in and is offering Pennsylvania. Supply locations Page family. products Eastern fabricator On distributor drainage exceptional a a

XX engineers years, products to drainage and related Eastern the across at has provided and to services team Northeast. contractors, close Supply For the municipalities

out core and Colorado, a with They values is storm Wyoming across of their and wastewater Texas, Kepner our Dana a operating partner own water, & England. XX multi-region credible Core distributor the locations in waterworks align Main. and industry, Arizona, highly drainage Nevada, New products, are of at

access synergies purchasing optimization fixed combined and opportunities with to providing products leverage new offers and facility revenue-generating capabilities, our we by our Kepner cost services. broader opportunities as through drive to customers Dana generate

West ACF control Oregon, erosion of locations Washington, with products, distributor Idaho is across X geosynthetics and and Utah. a

decades, ACF at trusted over control, for geosynthetics, their offerings water are our and to with team a business. and solutions West and distributor West excellent the customer customer erosion and offered terrain has storm For an a product management complement municipal contractor loyal their X ACF is service longstanding base, and stabilization.

a EGW Their value-added commitment of to with solutions infrastructure to and underground products customers provide delivering has to since products underground services municipalities team been EGW and enabled services needed complete strong contractors to maintaining relationships XXXX. has at resources providing and and support and Utilities Utilities utility The successfully. in Texas. customer is the distributor them products

this happy label the team a capacity to capabilities the and the additional are we brings have part us. Core forward of to family, private We & EGW Main look acquisition and

Geothermal serve Our most industries location and geothermal, a Company, pipe recent the They water in other high-density products. a and is distributor acquisition, sewer Supply primarily and related of fabricator polyethylene from Kentucky. single

and with we expanding an offering, for the expertise exciting this the partnership in Their Adding will new & confident are opportunities us Core for GSE product family customers. existing fits will and of in our positive area HDPE. be well and industry Main important both create fusible new a existing to

to tremendous to according for Main. & these is of plan, create progressing strategy businesses our and integration value acquisition Core The continues

We M&A & value-creating and continue and businesses have pipeline expect beyond. XXXX to a Core family very active to the throughout adding Main

quarter. the up are with first prepared in our performance pleased remarks, To we my wrap

our significant objectives have part of We business our recent generated are momentum growth continuing in to by execute to we months, the season. we strategies an as positioned for and achieve construction enter the well important

and communities which It's advancing call. we becoming apparent ready the our live, we water answer and infrastructure, and infrastructure need and our fragile I upgrade proud a nation's the that partner to our are the in more there play. work Thank reliable help am you to communities and to that more associates for and repair

Mark. first over discuss turn fiscal that, I Mark XXXX will now ahead, financial to results to With outlook. and it our Go quarter

Mark Witkowski

morning, Good Steve. everyone. Thanks,

of roughly X our sales and we continue achieved as X% XX% with added market market share end quarter on grew drive Pricing quarter, volume with have modest Organic to results. the acquisitions. first through products, to on begin experience Page sales for competitive. net our continue growth. as supplement deflation quarter gains headwind X% to certain remained the teams I'll first was mid-single end approximately digits organic a of markets our minor highlights growth growth in nearly We sales and

gross margin XX.X% record in XX.X% quarter in prior Our came compared at to in the a year. the first

sourcing our impact As efforts product label to to cost a offset XXXX. by private performance, strong by underlying margins average M&A. were inventory benefits compared and XXXX in unfavorable impacted higher partially was This expected, from optimization

first approximately administrative general quarter to $XXX the and increased million. Selling, expenses in XX%

mid-single acquisitions, attributable SG&A support current inflation and Excluding growth. volumes digits, future increased in to increase most that with investments personnel of and to

in expense the $XX and primarily in loan credit interest increase term ABL to rate due the our compared on incremental year $XX the $XXX in million rates of quarter debt. that's increase an million addition was first Interest XXXX, million senior in facility with was period. under The variable prior due higher our the borrowings

million quarter compared income first period. The prior $XX the provision million for taxes year in $XX with the in was

effective XX.X% secondary last and of was rate the The repurchase XX.X%, Our primarily interest the to exchanges tax first year. completed we in this year and effective last respectively. the quarter tax of offerings increase with rates conjunction the in in partnership transactions and were due year

in year an due period. operating for million income million in $XXX lower net in expense. the interest increase was with compared recorded income income prior in and The the to first We $XXX decrease quarter primarily net

compared due by quarter during net share earnings of XXXX. the repurchase shares share decreased income, per partially a XX in million to share lower period. counts decreased to following Diluted Diluted with fiscal offset X% the earnings our in primarily $X.XX per $X.XX prior decline year first in

decreased profit of adjusted a cost lower XX.X%. quarter sales and due EBITDA growth. EBITDA margin EBITDA was inflation percentage and the of margin impact X% first to and the The to gross due to in points SG&A decrease Adjusted basis adjusted drive net to higher XXX to $XXX approximately decreased primarily in as investments million,

$XX typical, build million during inventory of and than over less make we cash after the of supplemented with to our borrowings with operating activities $XXX growth cash this business, million. an significant was sheet Net quarter. in what balance cash generation Page I'd update been flow cash the has like to lower first cash flow and pleased on our provide historically flow operating level year, additional this the inventory on We the M&A continue Now an quarter. experienced investments with on to in optimize We provided though were of a as quarter by We spent in cash XX. levels.

allocation near We remain capital term, out. expect initiatives laid from and operations to we fund organic while reduce net generate liquidity committed to to In the leverage. flow the we priorities working M&A, enhance and our our to cash previously our debt additional

we which may on for we year, throughout future provide As expect a include additional potential program. and progress additional shareholders, returning the our for the plans to dividend repurchases details capital to share

As we $X.X repurchases a billion during share on fiscal reminder, deployed XXXX.

in quarter the We the expand loan extended in during with swap entered interest loan, also entered at XXXX and XX, The with million into points. facility a XXXX, amount new matures term billion on The of approximately ABL July capital plus maturity we swap existing starting XXX $X.X Concurrent new the SOFR, and to of into an of through February has term $XXX notional rate a all-in XXXX. rate term our a our of the an structure. X.X%. we that margin the fixed $XXX million of carries XXXX, increases interest loan term interest maturity rate issuance basis instruments to to

end primarily debt to the organic year-over-year the borrowings investments pro current the and due acquisitions X.Xx, was share increase our quarter and of in higher in acquisitions, than billion. available debt effects liquidity net $X leverage to forma Excluding of growth, repurchases. more leverage was The fund is net at

annually. of refinancing basis XXX to from no due the There reduced in margin on changes expense were senior rate XXXX term approximately of closed loan our interest savings or applicable we other maturities. basis points, our to XX, May million On and $X terms resulting XXX points

initiatives. end one wrap for for updated year to market behind over XX. I'll fiscal single-digit us, head execution expect our continue through unchanged, we With and we XXXX the our growth up expansion remains to Page Before outlook and on quarter of geographic of outlook gaining share our market customer volume product, low the Q&A,

XXXX. in to We residential expect continue grow to construction new modestly

bidding remain residential future. despite for orders the and higher to the and activity that higher Our will interest continued foreseeable rates expectation show they strength,

continue there optimism tailwinds is are products. available from for public to of a to and the our homebuilders multiyear shortage which We pleased hear supports homes, believe

and Nonresidential be and construction pace market has positive. activity been solid in our thus this far, continues order bidding to

We to see we battery products, continued manufacturing to the centers, and for infrastructure. upgrade slightly retail strength data repair replacement year. Municipal XX% resilient office street to projects, other sales, Overall, which due construction. expect represents space to and the the softness expect flat of large continued in healthy plants highway municipal up our is need critical and and activity, market in water with nonresidential aged and to net be budgets some over

Infrastructure the the long-term we market Investment investments. will from Jobs incremental low of volume single believe to XXXX. Act, evaluate on digits funded are and we our and projects Based in these grow continue by visibility continuing length see when may We end to this

We headwind offset expect than daily a single-digit a pricing in sales XXXX, more from volume acquisitions. sales to yielding average slight growth, low excluding fiscal

expect will continue maintain We XXXX. adding contribute opportunities, & a to more the of strong through M&A completed we in and year. of as today expect through total to growth We high-quality we sales X% Core businesses fiscal family to Main X% the the pipeline move we

quarters, first well bid. basis. projects market performed the us in inventory in quarter, stable on seen the the We've fairly increase of the can we on of level a margins negative effect competitiveness cost cost Gross behind mostly with normalizing sequential which recent

initiatives. through to our We work XX these of any to we than more grow margins to not the market guided pressures execution offset basis as the impact gross We'll competitive expect to year look XX our but compression to balance for maintain gross previously that could continue and of points. potential share, margin what of by the we

date Taken expect XX% raising are annual recent of to and year-over-year growth we We reflecting the all in and of to together, acquisitions. $X.X to narrowing outlook billion now based XX%. sales range our be $X.X on results net billion, to

narrowing million, are million our of X% X%. EBITDA and outlook year-over-year $XXX from to also growth reflecting for We to range raising to adjusted $XXX

performance in in confident to are We our ability strong continue XXXX. delivering

term. extremely Our commitment model, for unique changes driving the the well to in ability business position successfully and value to navigate shareholder environment long us macro

it I'd to time, up like questions. this At open for

Operator

Bouley have our We Instructions] [Operator Matthew Barclays. first question from with

Matthew Bouley

to full commentary. to I behind that It inventory pick up you're you, but competitive just potential basis sort wanted clarify I of you on gross of points, sounds number like of one. of for said XX to of margin wanted that kind normalizing speaking the effect that I the now The is that's cost some kind is XX to pressures. that. now year? guide guess, of kind all

cadence just And gross these margin the little through seeing on two, of your how kind that a with number should can you're what put kind you competitive additional and pressures of affect color year?

Mark Witkowski

Mark. the appreciate question. Matt. It's Yes. Thanks, I

I say think quarter, that XX kind off points sequential XX the that last about about I we talked of of basis coming First, margins, would to that just on gross QX. would cadence of

might a see we QX. in bit QX, maybe that So little up QX, coming in

was come Last a a gross a So think normalization, consistent it's have been, we where as was margin some record expected. really and we'd largely are, year you that quarter of about as pretty kind perspective. I'd we've in from -- say, indicating margin gross

We most we'd We had that we us. of that some got So this pressure indicated see behind quarter. did.

to the projects. they distributor It's happen market at of is something as stable is that and with a can like What to competitive. are costs piece the bit stable, us. fact of which happen new seen have for in at when get pretty level, than new what good is be I will after us. those say on industry that not that really been go does kind We've more volume feel that. little overcome thing projects, costs we're really tends the the we a that's I'd looking

to But pretty in little we has of that margins When bit quarters. for couple but stable, kind which can of are be in little stable, been When of see margin could a expand pressure moved able the good prices us, bit, tend competitiveness good. market margins been to they've gross bit. that squeeze a a very next costs have

Matthew Bouley

it. Got

Okay. And on That's helpful. following then I up secondly, commentary. guess, the deflation

price You quarter. a you from for guide, a lot sounds slight to is in change just think slight in I sort stable. last areas, year, said of like But the maybe and the of it market the pricing deflation spoke that's

the little It a hear So seeing side, there's to but quarter, pressure? headwinds? I you would a there are fire the looked in of offsets put that any well. where bit mouth. deflationary if not words protection, seeing you your deflationary And like be to into some guess, inflationary in on Where are bit as little was I curious

Mark Witkowski

Matt. Thanks, Yes.

a talked more off and say, been of really pretty we've months. it's in it's overall, fire coming. about, see high here you one those Municipal was of, but commodity-based saw the certainly I'd piping the we PVC surprise really in stable last is there, pressure, knew is As several results. can that products the and been XXXX, we as under that's record steel those Not that protection

new again, So nothing there. really

a the just the of to bit something holding price goods But language pricing, that the to got -- to to sure customers. make given sensitive, little subset But of do on you're you of stability a that more it's it's is little share. a customers that more bit we slight those of tweak projects. To that are off sell really we more win to made coming basket that

to put risk. of grow And projects any and types those of we at not definitely and are share maintain going

as that something view gross the slightly pressure but on significant impact does slight out. any to and just margins. item of put all, very the a point language. at we top It slight So I kind tweak wanted to it line the wouldn't little could

at I growth the Now have. pretty our strategic I decent good side growth. all we been side, driving impacts And do driving we margin think the offsetting label one, margin pretty gross of those think us of effective then the volume by on some with those normalization that offsetting we've initiatives really gross things, seen on that private job of expected a you've

for strong come Our really quarter. sourcing optimization has in the

to fight margins, to we're of to seeing pressure. indicate continue So hold to we are some where that just going want to but those down

Operator

The Coe next Research. question is from Wolfe Nigel with

Nigel Coe

Great.

up I pick to the numbers, So seems price if last you on it looks in is plug just maybe deflation. or so wanted off like price down maybe X% that the quarter. question this sort It of

modest just visibility would -- of we gauge meaningful what I'm into price more the quarters. deflation becoming you of And of as get pressures, a perhaps deflationary severe? have you that's wondering of kind more the what and how kind bit the kind risk broader

Mark Witkowski

that with in and market about We've costs pretty supplier feel lot with the the have Nigel. really base visibility. of the a stabilized kind our place Thanks, good market. Obviously, field got good where Yes. of teams, take discussions

So sensitive. on really are that anything beyond just small more of that, price again, some bit minor little customers competitive, remain subset to tweaks a a

particular private saw with the harder. margin initiatives anything, from don't when what to to significant even really as get So really quarter, teams the some little being label in find forces the there And squeeze some side. field view these seen it that And we've some there, benefit trend really that cost of a you pull-through good is really we in of any bit if drive perspective. on

Stephen LeClair

Yes.

expected, a competitive some chains projects these add now mostly the typically, of seen that. standardized start more seeing as pipe more stabilized have standard stabilized that prices on to involve that is nature larger may of is into lot What of the and sizes. Just as we've supply have

good about and of kind seeing offset even has with portion really of we've I drive what there pull-through we're that. a confident level of seen And more as And we're unexpected. to seeing. and, what Not that's the through we're volume ability think, to with private been mentioned, Mark our label accelerated, that

Nigel Coe

so growth mainly of to year. inflationary XQ, And XQ, pressures of margins you've strong SG&A XQ But color. up XQ? on remainder EBITDA on SG&A wondering good just think I'm sequentially get over the great sort the leverage And we see given should typically, we the how the That's do -- then spending, margins, volume about kind on on SG&A the in picking on the expect seen leverage of we investment just still SG&A.

Mark Witkowski

Yes. Thanks, Nigel.

that, I the mind some in On quarter the is seeing you're SG&A in was in remarks, of the a this portion side, to highlighted there, prepared good increase related I'd the really, of rate keep in what the M&A. and

that see from X/X could about we of the You about was really acquired dollars have SG&A say I'd -- M&A.

some to It So the get forward. as we of out there'll longer synergies a be SG&A. opportunities go takes little

the that through some we you've margin gross we gross the seen level, at get With our on and come margin M&A benefits those immediate do, benefits line.

some well some talent the M&A So rate I'd made and drive We've say making of productivity. pressure been go-forward, there. of areas XX XX and that some we We've get in growth. next the key to forward into the got going investments growth and that investing from the over quarters position synergies of business. in basis Still work technology to for points we've company some to some SG&A investments good couple a through initiative as of

any So we until year. significant I into there get kind of expect wouldn't this later leverage

Operator

question with from The RBC Dahl is Mike next Markets. Capital

Michael Dahl

of the versus down stable 'XX to see the basis first still gross Or best XX here. Sorry year not that I'm XX question, to But question. sequentially to the clear, 'XX? points. fully there? that margin then the full you'll year harp and points basis a Matt's full I XX in guess, from XX That's on Is on XQ part hold Mark, is

you've is very initiatives you've obviously, Because, through internal of your And good part number? finding is, the offset net articulated, job far. a second as so that done a

somewhat may for margins? less and of So is Or that expect is net you headwind, be the than kind do the a headwind gross net that? that

Mark Witkowski

Good -- points, to news just questions, basis to we'll XX the as sequentially Mike. starting to clarify, XX margin the that think QX. gross in but Thanks, of Yes.

initiatives, it continue good, had to a As in to we're quarter really those. going relates say, We I'd QX. initiative the to drive

Some and of can. build XX that able try offset be to of little think to can XX be choppy, to we we're as we off of as going a that but to that much

So as I if choppiness gross higher about on that effects, end drive it continued And that. sequential end those continue could get coming other that lower initiatives can if as be the think of we certain have some range things of But the and we about any of you get margin to benefit. various projects, think that and QX. at off

Michael Dahl

Okay. potentially Got there. better it. stable The... And all from else or equal,

Mark Witkowski

neutral. going it, than to worse work We're for no

Michael Dahl

kind and question, Second this last year, M&A. now lot deployment of just buyback front-loaded a you you've on Obviously, around capital leverage. M&A the spent of amount

to on on speaking be deals recent of makes like be first you've seems sense of that XX% to the so M&A, be what which might on and tuck-ins. doing that, it been it you margin. combined, higher than the of private So the know would competitive, the was just part back Kepner multiple these XX% in deal kind equity like some higher seems smaller it the like, envelope, I Dana range, But would that's more

you in of for well. So as can and maybe what just speak multiples, market to basis a drive the post-synergy kind what seeing on you're that

and on a you're your deleveraging. in pivoting of ultimately mainly how towards And then with term the this kind year. sounds near thinking more little buyback and M&A deemphasize capital maybe to now high the priorities But for your you're just leverage focus like speak it about in Xs,

Stephen LeClair

Yes. the the the that standpoint, terms that you at it paid acquisitions of was from high a have all multiple certainly, multiples, with in magnitude don't have the pre-synergy all of to the low share a have pre we range Mike, I'll what come the Dana pipeline. done we first synergy. Kepner and other we typically with being payback and its medium was end fact traditionally in disclose while talk that, about I'll And the size M&A at

viability felt markets But the So any not those was the its really there the certainly, at, Dana level. looking and of multiples. in really terms with long-term seeing had change we that that, of and given worth Kepner at lot they've a compelled that locations that position overall of

So to we'll continue do that.

M&A deals to in the in out. look of And see the strong. that range -- Our everything in midsize our pipeline you'll in pipeline that that there's to continues are and a balance small

feel that really a confident pipeline. we got So active we've good

These thing. line things tend to that. and that, have a a traditionally saw other magnitude the the done, we growth terms little of and in be in not outsized that in what bit of you and that's bad of lumpy, little terms quarter. looks M&A the that's It this timing It's just deals in the Dana size Kepner and of falling a with

about capital do Mark, And little allocation? more you want to bit talk a

Mark Witkowski

no there. to be terms M&A consider real dividends share Organic to the think look point. Yes. to in the of at priorities. And top we'll priorities, some growth, our at allocation changes are capital Mike, going continue repurchases and I continue

with expect back returned that excess We generate and shareholders. we think we to that have capital of can execute the all cash to that of level

share at it XXXX, was that I in a we highlighting level. wouldn't expect repurchase of did think I that just lot it so

expect that bit You'd to as little more allocation move be a balanced we forward.

Operator

next The Anthony with Citigroup. question Pettinari from is

Asher Sohnen

the Sohnen price-sensitive Anthony. I there correctly. like for pressure was of from if understood comments some kind maybe It mix This Asher for your down is price customers, sounded on more

as of projects that over come sort And just out? the expect so just projects driving called online to do number it time large large what's of more with you increased then maybe And talk worsen Is about you maybe trend? that you IIJA? can competitive intensity

Stephen LeClair

kind it's taken of seeing indicating normalizing had of about the and what about the chain to the last was the really really and formulate. competitive been for really pricing here I'd and terms we're the share time nature that structure. We expected as that supply year, of this in

And were that if of first significant of I'll in had where quarter everybody, pretty just remind year, comps some last we against. going we we back terms go up margins to

now seen. of right seeing the in have certainly we're we businesses what for We're standard pretty the is as now nature traditionally this seeing So the competitive industry.

IIJA. a to Our there ability a a strong, good out private bid we'll of and this lot We're projects activity. continue label there. offset of see other initiatives But our lot are to pricing that. lot some and We continues with there to of some definitely offset of mentioned really to seeing upside be some of

So Many from quarter one call we're treatment coming what we projects. last see to of longer-term plant IIJA of are the I bidding is volume over things are would encouraged funded about starting in these more that this projects. projects

many of cases, evaluating what of is be late these into we're timing. year this there terms flow will in things half in back likely material 'XX certainly So until on

And But incremental as year. forward. of starting the this we're accelerate of seeing bidding that in go quarter be how to at first least the be much activity we're encouraged evaluating by we will

Asher Sohnen

Got it. a Switching gears, of been that in sales season earlier tailwind. may geographies the start an some your you have to Northern called out

So maybe walk the the regionally? you facing I at through was any weather just maybe looking balance Can year. notable of you comps

Stephen LeClair

our as fittings. saw in conducive definitely to pipe business, weather, in a is really in. dealing some valves in we softer of we're with winter, that got we accelerate quarter as first with of the May, to We're that for And areas year, into of the putting and weather and Upper and Midwest wet this share, I'd lot season weather. Yes. some wet particularly and choppy able really early kick to digging a not

So delayed can feel can that season always in or the that -- of it's wet We depending with to very X, probably we're may rain going start be for the it And weather how season But with the out month on pans -- choppy. conditions. impact winter, over next a closely. better dicey. and we got it. watching how be spring, the figured there's In one

continue we'll that. usually, So out the And quarter. monitor to levels over that

Operator

next The from Research Group. with question Kathryn is Thompson Thompson

Kathryn Thompson

few prepared commentary a Just the based Q&A. in clarifications your on and

municipal you guidance. that to single-digit Just in for end market some steady growth side, guidance, low said in the expect implied on

digit to to mid-single-digit two markets you -- to you and But for low market. But said non-res Previously, could the flattish. on those And going resi, end you nonres just guidance? growth. single updates the again any end had said on be residential was clarify

Mark Witkowski

Thanks, Kathryn. Yes.

would terms steady, pockets of of single watching commentary. were digit. some You highway but seen the we good strength in got to really continues Nonresi, some say right on low year. early of the of very the some going we've be there, Definitely prepared kind muni in work. that I different of start kind

side. And in A good from us lot our in breakout bit gave we residential little product, we'd more were of kind see the the you non-resi perspective, That a a a of storm drainage, mid-single-digit the maybe quarter of drainage confidence we see tick-up storm a had there. then that really thinking can on as range.

primarily maybe quarter digit under The first resi, a for mid-single seeing up that really higher. strong. fact stay but was that, are rest to kind kind thinking of year, rates for we little the slightly due still the low of to these the We're of single interest that

kind overall for feel just So of about being little good single-digit markets. the the low But overall, side. still growth bit resi the a end on volume cautious more

Kathryn Thompson

then contributions from annualized bit you you a little more percentage revenue acquisitions, And And a more. But revenue the frame Okay. acquisition on could gave standpoint? contribution clarify from range. just the

You annualized tooth acquisitions. a about margins, finer us -- margins what from point better the expect help but on think --- from more on to said descriptively basis finer a it's these an

Mark Witkowski

the That's as a $XXX million growth about talked in top the about remarks, to X From say, it Thanks, standpoint, for Kathryn. the, contribution we is in of for the points X I'd line. range Yes. year.

from revenue progress this are with that seeing through. good from We're those working the a the good point. acquisition being coming of acquisitions, been we've growth very integrated how lot pleased So and

a the neutral I at SG&A We've think the of perspective. that the average, kind from acquisitions. better with level, margin little about would terms those at contribution, company of those of of seen kind higher EBITDA little a some gross but In rate contribution

about So from it's neutral standpoint. coming an EBITDA out just

Kathryn Thompson

that by And decline then to pricing? are your due seeing in in of Okay. volumes? acquisitions. clarification on Great. any Is offset changes selling in What somewhat to protection. are just you due decline segment volumes? terms prices, fire another saw just really more the We you lower seeing Or a

Mark Witkowski

Yes.

there. protection steel on been a offset talked side. we've moving fire some line On We've a deflation there. that fire good the pieces M&A with that top of about the protection Obviously, of pipe the line, driver product of couple different have big some the

organic work more say, I'd completion little of a, really facilities nonresi some been from the, it's bit. it represents on side, that volume in that that a down So And traditional of say, I'd out space. are there

like that some the storm a street around company other projects areas. work been -- stronger nonresi mega some of lot highway more has work and total said, drainage other going the you gets due and then the level, At the of to

So I'd soft a of expected, good little say in and for there. a But kind was category growth it's to that that's nothing be again, us. going coming as been

good market. there's protection to expansion opportunity of in fire for drive to still that Going continue space, try a to the we're and above going forward, lot that

Kathryn Thompson

Any label goal update go was around XX]. been Any of on a as The to XX, Okay. update [ percentage just to They've X%. private mix? previously there?

Mark Witkowski

hampering were around from Yes. hovering that X% that That XXXX. from We had was in and gotten more We've pattern say, our a private bit pull-through growth perspective. quarter. a little into good the We private an kind ticked of a kind in was label normalized, COGS, of label of something up buying quarter of perspective. I'd inventory a low

rest very we out a the this Since in private we'll were year. we've it growth expect there throughout been of our be And able that quarter label lot first of a allowed lot replenish has able product. the we of that with more continue had clear inventory, to us driving results to and some the to pleased with

Operator

Goldman Ritchie question is Sachs. with Joe next from The

Joseph Ritchie

for so a deflation I just question. margin the back And second. ask to won't Maybe going gross

there's large talk So like from been municipal pipe I'm just curious, on some expansion Westlake. companies

impact is expect you kind to going wondering, making? impact it of an just any that on do that guys have forward? are having you I'm the comments Or deflationary

Stephen LeClair

right of be while for online before this expansion about really confused capacity Yes. talk think municipal type I what's end other and sometimes into impact And can a the it that pipe Really with plastic comes happening Steve. Joe, now, markets that. will in piece. is of and any no our be there's been lot a

are of areas out in a noted of pipe polyethylene there plastic that end plumbing, in our to areas some the that these cetera, like thermal really kind pipe and expansions have markets. necessarily So number of related aren't et corrugated been in

So and on we're not medium seeing any real term. capacity that impact in near be board at to new anticipate issue don't all an from or the coming any

Joseph Ritchie

also in and $XXX circle the on million then to that or it the commentary That's to -- acquisitions were how so And just revenue. hear. I about I relates back the M&A and good Okay. new roughly increase. Great. we to thinking the guess, want guidance roughly were

million -- EBITDA even to if want the it's below close that $X contributed higher midpoint, how just than guidance like have you probably kind to correct. company-wide and contribution margins, are the then of numbers So at M&A how understand to increase my the whether the

Mark Witkowski

rationale We the and Joe, the That consistent kind was contribution, low thanks you're we really M&A I contribution, figures. we spot end. on to confident changes significant did about Yes. the look up. say, was felt that. acquisition range the pretty guidance. at for end given how that with were to And really, the the Yes, no low the there. of with very would thinking tick of

in Still building. with very backlogs watching. with and are the the were We the came in. early bidding activity the I'd still year. say, how pleased pleased, quarter It's Very that

the So quarter. lot a good of momentum in

there little and weather As in was severe Steve storms a May. mentioned,

taking wanted play in. coming very is to bidding guidance was with up see very anymore. But end before taking the pleased of in quarter we that really was kind felt low the consider we confident and we really the and out the that So rationale how

Operator

to LeClair Mr. We for currently have remarks. no further closing questions, so Steve I'll hand back over

Stephen LeClair

today. to on the joining pleasure you have a call. again right. was Thank all you us All It for

consistent quarter on work diversity and branches our a as Our after the focus markets. our support the and execution teams, end and hard products functional excellence of quarter of result of operational our

in continue capital deliver to execute drive creation confident to growth priorities. our our strategy on value are allocation our and ongoing We ability we as

profitability, and flow to the We cash levers have generation it. the driving many to growth and team it for capitalize execute

that Operator, & interest call. Core thank in So your Main. our for concludes you

Operator

today's call. concludes for This joining. you Thank

You may now lines. disconnect your

Core & Main (CNM) 4 Jun 242025 Q1 Earnings call transcript