Credit Risk 37 Changes in Internal Control over Financial Reporting 38 Item 1A. Risk Factors Anti-takeover provisions in our Certificate of Incorporation and our amended and restated by-laws (the "By-laws") could discourage, delay or prevent a change of control of our company and may af ect the trading price of our Class A common stock. Our Certificate of Incorporation and By-laws include a number of provisions that may discourage, delay or prevent a change in our management or control over us even if our s ...

Core & Main, Inc. (NYSE:CNM) Q2 2023 Earnings Call Transcript September 6, 2023 8:30 AM ET Company Participants Robyn Bradbury - Vice President of Finance and Investor Relations Steve LeClair - Chief Executive Officer Mark Witkowski - Chief Financial Officer Conference Call Participants Matthew Bouley - Barclays David Manthey - Baird Brian Biros - Thompson Research Mike Dahl - RBC Capital Vivek Srivastava - Goldman Sachs Patrick Baumann - JPMorgan Anthony Pettinari - Citi David Ridley-Lane - Bank of America ...

Fiscal 2023 Second Quarter Results SEPTEMBER 6, 2023 Cautionary Note Regarding Forward-Looking Statements In addition to providing results that are determined in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), we present EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Operating Cash Flow Conversion and Net Debt Leverage, all of which are non-GAAP financial measures. These measures are not considered measures of financial performance or liquidity under GAAP and the items excluded the ...

Part II - Other Information • exposure to product liability, construction defect and warranty claims and other litigation and legal proceedings; The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | --- | --- | --- | --- | --- | |--------|--------|--------|--------|----------------------| | | | | | | | | | | | Additional Paid In | | Shares | Amount | Shares | Amount | Capital | Shareholder Ownership 3) REVENUE | --- | --- | --- | |--------------------- ...

Fiscal 2023 First Quarter Results JUNE 6, 2023 This presentation and accompanying discussion may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, all statements other than statements of historical or current facts relating to our intentions, beliefs, assumptions or current expectations concerning, among other things, our future results of operations and financial position, business strateg ...

Core & Main, Inc. (NYSE:CNM) Q1 2023 Earnings Conference Call June 6, 2023 8:30 AM ET Company Participants Robyn Bradbury - Vice President, Finance, and Investor Relations Steve LeClair - Chief Executive Officer Mark Witkowski - Chief Financial Officer Conference Call Participants Kathryn Thompson - Thompson Research Group Michael Dahl - RBC Capital Market Joe Ritchie - Goldman Sachs Asher Sohnen - Citigroup David Ridley-Lane - Bank of America Operator Good morning everyone and welcome to the Core & Main Fi ...

Part I [Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for the three-month period ended April 30, 2023, covering key financial positions, performance, and cash flows, with accompanying notes Condensed Consolidated Balance Sheet Highlights (in millions) | Account | April 30, 2023 | January 29, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$4,929** | **$4,909** | | Total current assets | $2,166 | $2,211 | | Goodwill | $1,536 | $1,535 | | **Total Liabilities** | **$2,737** | **$2,499** | | Long-term debt | $1,571 | $1,444 | | **Total Stockholders' Equity** | **$2,192** | **$2,410** | Condensed Consolidated Statements of Operations (in millions, except per share data) | Metric | Three Months Ended April 30, 2023 | Three Months Ended May 1, 2022 | | :--- | :--- | :--- | | Net sales | $1,574 | $1,598 | | Gross profit | $439 | $421 | | Operating income | $181 | $180 | | Net income | $133 | $137 | | Net income attributable to Core & Main, Inc. | $86 | $86 | | Diluted EPS | $0.50 | $0.50 | Condensed Consolidated Statements of Cash Flows (in millions) | Activity | Three Months Ended April 30, 2023 | Three Months Ended May 1, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $120 | $(37) | | Net cash used in investing activities | $(74) | $(11) | | Net cash (used in) provided by financing activities | $(222) | $48 | - In April 2023, the company completed the acquisition of UPSCO, Inc. for **$40 million**, with other acquisitions totaling **$32 million** during the quarter, all funded with cash[64](index=64&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - Concurrently with a secondary offering in April 2023, the company repurchased **9.4 million shares** of Class A common stock and **5.6 million shares** of Class B common stock for a total consideration of **$332 million**[34](index=34&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's first-quarter fiscal 2023 financial performance, highlighting a slight decrease in net sales offset by improved gross profit margins and a strong liquidity position Q1 2023 vs Q1 2022 Performance Summary (in millions) | Metric | Q1 2023 | Q1 2022 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1,574 | $1,598 | $(24) | (1.5)% | | Gross Profit | $439 | $421 | $18 | 4.3% | | Operating Income | $181 | $180 | $1 | 0.6% | | Net Income | $133 | $137 | $(4) | (2.9)% | | Adjusted EBITDA | $220 | $219 | $1 | 0.5% | - Net sales experienced a **1.5% decrease** primarily due to reduced residential lot development and seasonality, partially offset by higher selling prices and acquisitions, while meter product sales grew **8.4%** due to smart meter adoption[106](index=106&type=chunk)[107](index=107&type=chunk) - Gross profit margin improved to **27.9%** from **26.3%** in the prior-year period, driven by strategic inventory investments, gross margin initiatives, and accretive acquisitions[109](index=109&type=chunk) - Operating cash flow significantly improved to **$120 million** provided by operations, compared to **$37 million** used in the prior year, primarily due to a smaller inventory investment as product lead times became more predictable[122](index=122&type=chunk) - As of April 30, 2023, the company held **$1 million** in cash and approximately **$1,108 million** available under its Senior ABL Credit Facility, ensuring sufficient liquidity for at least the next 12 months[118](index=118&type=chunk)[120](index=120&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines the company's exposure to market risks, primarily interest rate, credit, and price risks, and the strategies employed to mitigate them - The company is exposed to interest rate risk with **$1,604 million** in variable-rate debt as of April 30, 2023, where a one percentage point change in interest rates would alter annual interest expense by approximately **$15 million**, excluding swap impacts[141](index=141&type=chunk) - Credit risk is mitigated by a diverse customer base, with the 50 largest customers contributing only about **12%** of net sales in fiscal 2022[142](index=142&type=chunk) - The company manages price risk from product cost fluctuations through purchasing economies, inventory management, and passing cost increases to customers[143](index=143&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of April 30, 2023, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[144](index=144&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the fiscal quarter[146](index=146&type=chunk) Part II [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, though it is involved in ordinary course litigation, including product liability claims - The company is **not currently party to any material legal proceedings** but is subject to ordinary course litigation, including personal injury, workers' compensation, and product liability claims[150](index=150&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended January 29, 2023 - There have been **no material changes** from the risk factors disclosed in the company's Fiscal 2022 Annual Report on Form 10-K[151](index=151&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities and details repurchases of Class A common stock during the quarter, including a significant repurchase transaction in April 2023 Issuer Purchases of Equity Securities (Q1 2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 30 - Feb 28 | 19,110 | $23.02 | | Mar 1 - Mar 31 | 18,784 | $21.49 | | Apr 1 - Apr 30 | 9,384,946 | $22.15 | | **Total** | **9,422,840** | **$22.15** | - Repurchases included **9,377,183 shares** of Class A common stock at **$22.151 per share** on April 14, 2023, as part of the Repurchase Transaction, which also involved repurchasing **5,622,817 shares** of Class B common stock for no additional consideration[154](index=154&type=chunk) [Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there were no defaults upon its senior securities during the period - There were no defaults upon senior securities during the period[155](index=155&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable to the company's operations[156](index=156&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) The company reports no other information required to be disclosed under this item for the period - No other information is required to be disclosed under this item for the period[157](index=157&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Purchase and Redemption Agreement, CEO/CFO certifications, and Inline XBRL documents - A list of exhibits filed with the report is provided, including the Purchase and Redemption Agreement, CEO/CFO certifications, and XBRL data files[158](index=158&type=chunk)

Core & Main, Inc. (NYSE:CNM) Q4 2022 Earnings Conference Call March 28, 2023 8:30 AM ET Company Participants Robyn Bradbury - Vice President, Finance, and Investor Relations Steve LeClair - Chief Executive Officer Mark Witkowski - Chief Financial Officer Conference Call Participants Jamie Cook - Credit Suisse Kathryn Thompson - Thompson Research Mike Dahl - RBC Capital Markets Dave Manthey - Baird Nigel Coe - Wolfe Research Vivek Srivastava - Goldman Sachs Asher Sohnen - Citi Elizabeth Langan - Barclays Pat ...

8 Attractive financial profile with efficient operating model © Core & Main All Rights Reserved. Confidential and Proprietary Information. 18 OUR APPROACH TO M&A | --- | --- | --- | --- | --- | --- | --- | --- | |-------------|-------------|--------------|---------------|-----------------------------------------|------------|------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Market Overview - Core & Main estimates its addressable market for water, wastewater, storm drainage, and fire protection products in the U.S. to be approximately $40 billion in annual sales for fiscal 2022[55]. - The company estimates that its net sales represented approximately 17% of the $40 billion addressable market in fiscal 2022[83]. - Approximately 39% of the company's net sales in fiscal 2022 were related to the municipal market, highlighting its dependence on municipal infrastructure spending[131]. Sales Breakdown - For fiscal 2022, approximately 39% of net sales were derived from the municipal construction sector, 39% from non-residential construction, and 22% from residential construction[1]. - Approximately 22% and 39% of the company's net sales in fiscal 2022 were directly related to the U.S. residential and non-residential construction markets, respectively[97]. - The company estimates that around 39% of its net sales in fiscal 2022 were linked to clean water and wastewater infrastructure, storm drainage, and fire protection systems supporting U.S. non-residential construction activity[102]. Product Categories - Pipes, valves, and fittings accounted for approximately 68% of net sales in fiscal 2022[79]. - Storm drainage products accounted for approximately 14% of net sales, while fire protection products accounted for about 11% of net sales in fiscal 2022[110][111]. - The company’s products include smart meter systems and fusible HDPE piping solutions, enhancing its offerings in the infrastructure sector[246]. Growth Strategy - The company plans to replicate successful expansion in underpenetrated geographies to drive future growth[58]. - Core & Main's strategic accounts program, which focuses on large-scale projects, represented less than 5% of fiscal 2022 net sales, indicating potential for growth in this area[76]. - The company utilizes its geographic footprint and customer relationships to introduce new products and technology, targeting underpenetrated product categories for growth[107]. Operational Efficiency - The company aims to enhance margins through pricing analytics and optimization of system-wide pricing, which could lead to long-term margin expansion[60]. - Gross margin improved by approximately 290 basis points from fiscal 2020 to fiscal 2022, driven by private label product expansion and category management optimization[105]. - The company is expanding its direct sourcing and distribution capabilities to drive further margin expansion in the future[105]. Customer Base - The company has a fragmented customer base of approximately 60,000 customers, with the top 50 customers representing about 12% of net sales in fiscal 2022[113]. - The company has a branch network that connects large suppliers with smaller volume customers, with each branch carrying approximately 4,500 SKUs on average[118]. Workforce - As of January 29, 2023, the company employed approximately 4,500 associates, including 1,700 in sales positions and 250 in branch management[121]. - The sales force includes approximately 550 field sales representatives with an average of over 13 years of experience in relevant industries[120]. - The company focuses on attracting and retaining talent through competitive compensation and training programs, contributing to low turnover rates[122]. Financial Risks - The company is subject to inventory management risks, which can impact sales opportunities and gross margins[133]. - The company faces competitive pressures in a fragmented market, with only one major national competitor and various regional and local competitors[134]. - Approximately 98% of the company's net sales volume in fiscal 2022 was facilitated through credit sales to customers whose ability to pay is dependent on economic strength[138]. Supply Chain and Regulatory Challenges - Supply chain constraints have led to increased pressure on the company's operations, resulting in significant inflation throughout fiscal 2022[141]. - Regulatory changes could increase the company's costs and impact its operations, particularly in relation to environmental and safety regulations[143]. - The company is dependent on third-party freight carriers, and a shortage of qualified drivers could impact product delivery and operational efficiency[170]. Debt and Financing - As of January 29, 2023, total consolidated indebtedness was $1,478 million, with $198 million in outstanding lease commitments[188]. - The company had the ability to borrow $1,238 million under the Senior ABL Credit Facility, subject to borrowing base availability[188]. - A one percentage point increase in interest rates would result in an approximately $27 million increase in annual interest expense on the Senior ABL Credit Facility and the Senior Term Loan Facility[190]. Corporate Governance and Ownership - CD&R Investors beneficially own approximately 65.4% of the combined voting power of the company's common stock, allowing them to control significant corporate actions[203]. - The company is classified as a "controlled company," with CD&R Investors holding a majority of the voting power, which allows it to rely on exemptions from certain corporate governance requirements[237]. - The company’s Certificate of Incorporation includes anti-takeover provisions that may discourage changes in management or control, potentially affecting the market price of its Class A common stock[235]. Stock and Market Performance - The market price of Class A common stock may be volatile and could decline, affecting liquidity and trading[228]. - Future sales of shares by the company or existing stockholders could lead to a decline in stock price[230]. - The company currently does not have an approved plan to pay dividends on its Class A common stock, intending to use future earnings for debt repayment and business development[206].