Shares in water infrastructure distribution company Core & Main (CNM 4.27%) rose 13.7% in the week to Friday morning, according to data provided by S&P Global Market Intelligence. The move comes after the release of its fourth-quarter earnings. Investors liked what they saw, and the stock is now up 43% in 2024 and 168% over the last year.Core & Main's challenging 2023It might seem churlish to describe last year as "challenging," but the company's full-year sales only rose 0.8% to $6.7 billion in 2023. Moreo ...

For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Core & Main (CNM) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Business Services sector should help us answer this question.Core & Main is one of 315 individual stocks in the Business Services sector. Collectively, these companies sit at #6 in the Zacks Sector Rank. The Zacks Sector Ran ...

llucky78Thesis Over the past year, shares of Core & Main, Inc. (NYSE:CNM) shot up by 157.88%: Data by YChartsInvestors, especially institutional investors, like its previous revenue and earnings growth, its margin improvement initiatives, and the Infrastructure Investment and Jobs Act tailwind. I expect strong growth again this year, and although management’s outlook is modest, I have rated it a Strong Buy based on my long-term outlook. About Core & Main In its fourth-quarter and fiscal 2023 earnings re ...

Financial Performance - Net sales reached a record of over $6.7 billion[8] - Fiscal Year 2023 net sales increased by 1% to $6.702 billion from $6.651 billion in Fiscal Year 2022[13] - Adjusted EBITDA for Fiscal Year 2023 was $910 million[14] - Diluted earnings per share for Fiscal Year 2023 was $2.15, a 1% increase[38] - The company generated ~$1.1 billion in operating cash flow[79] Q4 2023 Results - Q4 2023 net sales increased by 5% to $1.440 billion from $1.374 billion in Q4 2022[66] - Q4 2023 Adjusted EBITDA was $160 million[35] Strategic Initiatives - The company closed 10 acquisitions during and after the year[8] - ~$1.3 billion of capital was deployed for share repurchases in Fiscal Year 2023[44, 63] Fiscal Year 2024 Outlook - The company anticipates net sales growth of +2% to +7%[87] - Adjusted EBITDA is projected to be between $925 million and $975 million[42] - Operating Cash Flow Conversion is expected to be 60% - 70%[43]

Core & Main, Inc. (NYSE:CNM) Q4 2023 Earnings Conference Call March 19, 2024 8:30 AM ET Corporate Participants Robyn Bradbury - Vice President, Finance and Investor Relations Steve LeClair - Chairman and Chief Executive Officer Mark Witkowski - Chief Financial Officer Conference Call Participants Matthew Bowley - Barclays Nigel Coe - Wolfe Research David Manthey - Baird Mike Dahl - RBC Capital Markets Kathryn Thompson - Thompson Research Group Anthony Pettinari - Citigroup Joe Ritchie - Goldman Sachs Patric ...

Core & Main (CNM) came out with quarterly earnings of $0.34 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this distributor of water and fire protection products would post earnings of $0.68 per share when it actually produced earnings of $0.65, delivering a surprise of -4.41%.Over the last four quarters, the company has surpassed consensus EPS estimates two ...

Financial Performance - Core & Main's net sales for fiscal 2023 reached approximately $1.5 billion, with 42% derived from municipal construction, 38% from non-residential construction, and 20% from residential construction [22]. - Approximately 67% of net sales in fiscal 2023 were attributed to pipes, valves, and fittings, while storm drainage products accounted for 15% and fire protection products for 10% [50][52][54]. - The company's net sales accounted for approximately 17% of its $39 billion addressable market in fiscal 2023 [63]. - Smart meter products accounted for approximately 8% of the company's net sales in fiscal 2023 [56]. - Sales through the strategic accounts program represented approximately 5% of fiscal 2023 net sales, targeting large-scale projects requiring technical expertise [36]. - Approximately 20% and 38% of Core & Main's net sales in fiscal 2023 were directly related to the U.S. residential and non-residential end markets, respectively [102]. - Approximately 42% of Core & Main's net sales in fiscal 2023 were related to the municipal market [105]. Market and Growth Opportunities - The company estimates its addressable market in the U.S. for water, wastewater, storm drainage, and fire protection products to be approximately $39 billion in fiscal 2023 [28]. - The Infrastructure Investment and Jobs Act allocated $55 billion for water infrastructure, expected to enhance investment in municipal water systems and benefit Core & Main's business [30]. - The company has identified approximately 165 metropolitan statistical areas (MSAs) for potential greenfield expansion, having opened nearly 20 new locations since 2017 [35]. - The company aims to pursue strategic acquisitions to expand into new geographies and enhance its product offerings, supported by a strong acquisition platform [39]. Operational Structure - Core & Main operates a network of approximately 335 branch locations across 48 states, serving over 60,000 customers and connecting with around 5,000 suppliers [20]. - The company employs approximately 5,000 associates, with around 1,800 customer support representatives and 575 field sales representatives [78][74]. - Each branch sells an average of 4,500 SKUs, with many items in stock and others available for delivery [70]. - Field sales representatives have an average of over 13 years of experience in the industry, contributing to strong customer relationships [75]. - The company has a pay-for-performance philosophy, linking compensation to branch or region-specific profitability and working capital efficiency goals [79]. Financial Risks and Challenges - The company faced price fluctuations in product costs due to supply and demand changes, economic conditions, and supply chain constraints [110]. - Interest rate increases throughout calendar year 2023 contributed to slowing new lot development and contraction in the residential end market [102]. - The company may lose business to competitors through competitive bidding processes, impacting its ability to secure contracts [109]. - The operational strategies implemented by the company to address market conditions may not be successful, leading to potential fluctuations in operating results [104]. - Fluctuations in federal funding can negatively impact municipal spending, affecting demand for Core & Main's products [108]. - The company experienced supply chain disruptions due to natural disasters, impacting product availability and costs [111]. - The company faces risks related to inventory management, where insufficient inventory may lead to lost sales opportunities, while excess inventory could negatively impact gross margin [114]. - The company may experience pricing pressure from customers during periods of declining product costs, which could adversely affect revenue and profitability [112]. - Changes in supplier terms could adversely affect income and margins, as rebate programs are subject to renegotiation and may lower gross margins [131]. Compliance and Regulatory Risks - Compliance with environmental, health, and safety laws may incur substantial costs, potentially exceeding current estimates and reserves [136]. - The company is subject to various federal, state, and local regulations, which could increase operational costs and affect profitability [138]. - The company is exposed to risks related to environmental compliance, which may lead to increased costs and operational challenges [140]. - Changes in ESG and sustainability expectations could impose additional costs and risks, potentially affecting the company's stock price [142]. - The introduction of new SEC climate-related disclosure rules could lead to increased compliance costs, impacting financial condition [143]. Debt and Financial Obligations - Total consolidated indebtedness as of January 28, 2024, was $1,893 million, with $218 million in outstanding lease commitments [174]. - The company entered into a $750 million incremental seven-year term loan maturing on February 9, 2031 [174]. - Core & Main LP's cash flow from operating activities may not be sufficient to meet its debt service obligations, potentially leading to asset sales or restructuring [185]. - The company is exposed to the risk of increased interest rates due to a significant portion of borrowings being at variable rates [175]. - 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 2028 Senior Term Loan [182]. Stock and Shareholder Considerations - The market price of the company's Class A common stock may be volatile, influenced by various factors including market conditions and regulatory changes [204]. - Future sales of shares by the company or existing stockholders could lead to a decline in the stock price, impacting market perception [206]. - Future issuances of debt or equity securities may dilute the economic and voting rights of Class A common stockholders, potentially reducing the market price of the stock [211]. - Anti-takeover provisions in the Certificate of Incorporation and By-laws may discourage or prevent changes in management or control, affecting the trading price of Class A common stock [213]. - The existence of "blank check" preferred stock could be used to thwart takeover attempts, impacting stockholder benefits from potential premium offers [214]. - The company may face securities class action litigation due to stock price volatility, which could divert management's attention and adversely affect business [217].

ST. LOUIS--(BUSINESS WIRE)--Core & Main Inc. (NYSE: CNM), a leader in advancing reliable infrastructure with local service, nationwide, today announced financial results for the fourth quarter and fiscal year ended Jan. 28, 2024. Fiscal 2023 Fourth Quarter Results (Compared with Fiscal 2022 Fourth Quarter) Net sales increased 4.8% to $1,440 million Gross profit margin decreased 40 basis points to 26.7% Net income of $76 million Diluted earnings per share increased 9.7% to $0.34 Adjusted EBITD ...

[Executive Summary & Highlights](index=1&type=section&id=Executive_Summary_Highlights) Core & Main's executive summary highlights Q4 and full fiscal year 2023 financial performance, strategic achievements, and management's forward-looking commentary [Fourth Quarter Fiscal 2023 Highlights](index=1&type=section&id=Fourth_Quarter_Fiscal_2023_Highlights) Core & Main reported increased net sales and gross profit margin for Q4 FY2023, alongside a decrease in Adjusted EBITDA and significant share repurchases | Metric | Q4 FY2023 | Change YoY | | :-------------------------- | :-------- | :--------- | | Net sales | $1,440M | +4.8% | | Adjusted EBITDA (Non-GAAP) | $160M | -2.4% | | Gross profit margin | 27.1% | +10 bps | | Adjusted EBITDA margin (Non-GAAP) | 13.6% | -50 bps | - Deployed **$1.3 billion** of capital to repurchase and retire **45 million shares** at an average price of approximately **$30 per share**[1](index=1&type=chunk) [Full Year Fiscal 2023 Highlights](index=1&type=section&id=Full_Year_Fiscal_2023_Highlights) Core & Main achieved record net sales and operating cash flow for FY2023, alongside strategic acquisitions, new locations, and substantial share repurchases | Metric | FY2023 | Change YoY | | :-------------------------------- | :------- | :--------- | | Net sales | $6,702M | +0.8% | | Diluted earnings per share | $2.15 | +0.9% | | Adjusted EBITDA (Non-GAAP) | $910M | -2.7% | | Net cash provided by operating activities | $1,069M | +$668M | | Net Debt Leverage (Non-GAAP) | 2.1x | +0.7x | - Opened **4 new locations** in underserved markets and closed **10 acquisitions** during and after the year, investing **$780 million**[15](index=15&type=chunk)[51](index=51&type=chunk) - Deployed approximately **$1.3 billion** of capital to repurchase and retire **45 million shares**[1](index=1&type=chunk)[51](index=51&type=chunk) [Management Commentary](index=1&type=section&id=Management_Commentary) Management highlighted strong fiscal 2023 performance, strategic growth initiatives, and a positive outlook for fiscal 2024, anticipating improved market volumes and M&A-driven sales growth - The company has generated **significant momentum** through acquisitions, internal investments, and value returned to shareholders, positioning it well to compete and execute its strategy for **market share** and **long-term profitable growth**[2](index=2&type=chunk) - Fiscal 2023 was an exceptional year, delivering strong financial performance including over **$6.7 billion in net sales**, **$910 million in Adjusted EBITDA**, and **record operating cash flow of approximately $1.1 billion**, enabling significant investments in organic and inorganic growth and capital returns[15](index=15&type=chunk)[51](index=51&type=chunk) - For fiscal 2024, management expects **end market volumes to improve**, driving market share gains through product, customer, and geographic expansion, with M&A projected to contribute **6% to 7% of sales growth**, net sales ranging from **$7.4 to $7.6 billion** and Adjusted EBITDA from **$925 to $975 million**[42](index=42&type=chunk) [Financial Results - Fourth Quarter Fiscal 2023](index=2&type=section&id=Financial_Results_Fourth_Quarter_Fiscal_2023) This section provides a detailed analysis of Core & Main's financial performance for the fourth quarter of fiscal year 2023 across key metrics [Net Sales](index=2&type=section&id=Net_Sales_Q4) Net sales for the fourth quarter of fiscal 2023 increased by $66 million, or 4.8%, to $1,440 million, primarily driven by volume growth and acquisitions across various product categories | Metric | Q4 FY2024 | Q4 FY2023 | Change ($M) | Change (%) | | :------- | :-------- | :-------- | :---------- | :--------- | | Net sales | $1,440 | $1,374 | $66 | 4.8% | - Net sales growth was primarily due to **volume growth** and **acquisitions**, benefiting pipes, valves & fittings, storm drainage, fire protection, and meter products[16](index=16&type=chunk) [Gross Profit](index=2&type=section&id=Gross_Profit_Q4) Gross profit for the fourth quarter increased by $11 million, or 2.9%, to $384 million, though the gross profit margin decreased by 40 basis points to 26.7% due to inventory normalization | Metric | Q4 FY2024 | Q4 FY2023 | Change ($M) | Change (%) | | :-------------------- | :-------- | :-------- | :---------- | :--------- | | Gross profit | $384 | $373 | $11 | 2.9% | | Gross profit margin | 26.7% | 27.1% | -0.4% | -40 bps | - The **decline in gross profit margin** was primarily attributable to **normalization of larger prior year benefits** from **strategic inventory investments** during an inflationary environment, partially offset by the execution of gross margin initiatives[52](index=52&type=chunk) [Selling, General and Administrative (SG&A) Expenses](index=2&type=section&id=Selling_General_and_Administrative_SG_A_Expenses_Q4) SG&A expenses for the fourth quarter rose by $17 million, or 8.0%, to $230 million, primarily due to higher personnel, facility, and distribution costs, increasing to 16.0% of net sales | Metric | Q4 FY2024 | Q4 FY2023 | Change ($M) | Change (%) | | :-------------------- | :-------- | :-------- | :---------- | :--------- | | SG&A expenses | $230 | $213 | $17 | 8.0% | | SG&A as % of net sales | 16.0% | 15.5% | +0.5% | +50 bps | - The increase in SG&A was primarily attributable to a **$10 million increase in personnel expenses**, along with **higher facility and distribution costs** related to **inflation and acquisitions**, and investments to support growth[3](index=3&type=chunk) [Net Income](index=2&type=section&id=Net_Income_Q4) Net income for the fourth quarter decreased by $8 million, or 9.5%, to $76 million, mainly due to higher SG&A and increased interest expense on variable-rate debt | Metric | Q4 FY2024 | Q4 FY2023 | Change ($M) | Change (%) | | :--------- | :-------- | :-------- | :---------- | :--------- | | Net income | $76 | $84 | -$8 | -9.5% | - The decrease in net income was primarily attributable to **higher SG&A expenses** and **higher interest expense** due to an **increase in interest rates** on variable-rate debt[38](index=38&type=chunk) [Earnings Per Share (EPS)](index=2&type=section&id=Earnings_Per_Share_EPS_Q4) Basic EPS for the fourth quarter increased by $0.04 to $0.35, and diluted EPS rose by $0.03 to $0.34, primarily driven by lower share counts from repurchases despite a net income decline | Metric | Q4 FY2024 | Q4 FY2023 | Change ($) | Change (%) | | :----------- | :-------- | :-------- | :--------- | :--------- | | Basic EPS | $0.35 | $0.31 | +$0.04 | 12.9% | | Diluted EPS | $0.34 | $0.31 | +$0.03 | 9.7% | - Diluted EPS increased due to **lower share counts** following **share repurchase transactions** executed throughout fiscal 2023, partially offset by a decline in net income[17](index=17&type=chunk) [Adjusted EBITDA](index=2&type=section&id=Adjusted_EBITDA_Q4) Adjusted EBITDA for the fourth quarter decreased by $4 million, or 2.4%, to $160 million, primarily due to higher SG&A expenses, resulting in an 80 basis point margin decline | Metric | Q4 FY2024 | Q4 FY2023 | Change ($M) | Change (%) | | :-------------------- | :-------- | :-------- | :---------- | :--------- | | Adjusted EBITDA | $160 | $164 | -$4 | -2.4% | | Adjusted EBITDA margin | 11.1% | 11.9% | -0.8% | -80 bps | - The decrease in Adjusted EBITDA was primarily attributable to **higher SG&A expenses**[53](index=53&type=chunk) [Financial Results - Full Year Fiscal 2023](index=3&type=section&id=Financial_Results_Full_Year_Fiscal_2023) This section provides a comprehensive overview of Core & Main's financial performance for the full fiscal year 2023 across key operational and liquidity metrics [Net Sales](index=3&type=section&id=Net_Sales_FY23) Net sales for fiscal year 2023 increased by $51 million, or 0.8%, to $6,702 million. This growth was primarily driven by higher selling prices and acquisitions, partially offset by a reduction in volume from comparably lower end-market volumes | Metric | FY2023 | FY2022 | Change ($M) | Change (%) | | :------- | :------- | :------- | :---------- | :--------- | | Net sales | $6,702 | $6,651 | $51 | 0.8% | - The increase in net sales was primarily attributable to **higher selling prices** and **acquisitions**, partially offset by a **reduction in volume** from comparably lower end-market volumes[39](index=39&type=chunk) [Gross Profit](index=3&type=section&id=Gross_Profit_FY23) Gross profit for fiscal year 2023 increased by $23 million, or 1.3%, to $1,818 million. The gross profit as a percentage of net sales slightly increased by 10 basis points to 27.1%, driven by net sales growth and gross margin initiatives, partially offset by the normalization of prior year inventory benefits | Metric | FY2023 | FY2022 | Change ($M) | Change (%) | | :-------------------- | :------- | :------- | :---------- | :--------- | | Gross profit | $1,818 | $1,795 | $23 | 1.3% | | Gross profit margin | 27.1% | 27.0% | +0.1% | +10 bps | - The overall **increase in gross profit as a percentage of net sales** was primarily attributable to execution of **gross margin initiatives**, partially offset by **normalization of larger prior year benefits** from strategic inventory investments during an inflationary environment[18](index=18&type=chunk) [Selling, General and Administrative (SG&A) Expenses](index=3&type=section&id=Selling_General_and_Administrative_SG_A_Expenses_FY23) SG&A expenses for fiscal year 2023 increased by $51 million, or 5.8%, to $931 million. This rise was mainly due to a $23 million increase in personnel expenses, along with higher facility and distribution costs related to inflation and acquisitions. SG&A as a percentage of net sales increased to 13.9% from 13.2% | Metric | FY2023 | FY2022 | Change ($M) | Change (%) | | :-------------------- | :------- | :------- | :---------- | :--------- | | SG&A expenses | $931 | $880 | $51 | 5.8% | | SG&A as % of net sales | 13.9% | 13.2% | +0.7% | +70 bps | - The increase was primarily attributable to an **increase of $23 million in personnel expenses** along with **higher facility and distribution costs** related to **inflation and acquisitions**, and investments to support growth[54](index=54&type=chunk) [Net Income](index=3&type=section&id=Net_Income_FY23) Net income for fiscal year 2023 decreased by $50 million, or 8.6%, to $531 million. This decline was primarily attributed to higher SG&A expenses and increased interest expense resulting from higher interest rates on variable-rate debt | Metric | FY2023 | FY2022 | Change ($M) | Change (%) | | :--------- | :------- | :------- | :---------- | :--------- | | Net income | $531 | $581 | -$50 | -8.6% | - The decrease in net income was primarily attributable to **higher SG&A expense** and **higher interest expense** due to an **increase in interest rates** on variable-rate debt[5](index=5&type=chunk) [Earnings Per Share (EPS)](index=3&type=section&id=Earnings_Per_Share_EPS_FY23) Basic EPS for fiscal year 2023 slightly decreased to $2.15, while diluted EPS increased to $2.15, primarily due to lower share counts from repurchases despite a net income decline | Metric | FY2023 | FY2022 | Change ($) | Change (%) | | :----------- | :------- | :------- | :--------- | :--------- | | Basic EPS | $2.15 | $2.16 | -$0.01 | -0.5% | | Diluted EPS | $2.15 | $2.13 | +$0.02 | 0.9% | - Diluted earnings per share increased due to **lower share counts** following **share repurchase transactions** executed throughout fiscal 2023, partially offset by a decline in net income[40](index=40&type=chunk) [Adjusted EBITDA](index=3&type=section&id=Adjusted_EBITDA_FY23) Adjusted EBITDA for fiscal year 2023 decreased by $25 million, or 2.7%, to $910 million, primarily due to higher SG&A expenses, partially offset by higher gross profit. The Adjusted EBITDA margin decreased by 50 basis points to 13.6% | Metric | FY2023 | FY2022 | Change ($M) | Change (%) | | :-------------------- | :------- | :------- | :---------- | :--------- | | Adjusted EBITDA | $910 | $935 | -$25 | -2.7% | | Adjusted EBITDA margin | 13.6% | 14.1% | -0.5% | -50 bps | - The decrease in Adjusted EBITDA was primarily attributable to **higher SG&A expenses** partially offset by **higher gross profit**[19](index=19&type=chunk) [Net Cash Provided by Operating Activities](index=3&type=section&id=Net_Cash_Provided_by_Operating_Activities_FY23) Net cash provided by operating activities for fiscal year 2023 significantly improved by $668 million, reaching $1,069 million. This improvement was primarily driven by inventory optimization efforts, partially offset by lower operating income and an increase in interest payments | Metric | FY2023 | FY2022 | Change ($M) | | :-------------------------------- | :------- | :------- | :---------- | | Net cash provided by operating activities | $1,069 | $401 | +$668 | - The **$668 million improvement** in operating cash flow was primarily driven by **inventory optimization efforts** in fiscal 2023, partially offset by lower operating income and an increase in interest payments[6](index=6&type=chunk) [Net Debt and Leverage](index=3&type=section&id=Net_Debt_and_Leverage_FY23) As of January 28, 2024, net debt stood at $1,892 million, resulting in a Net Debt Leverage ratio of 2.1x, an increase of 0.7x from the prior year. This increase was primarily due to higher borrowings under the Senior ABL Credit Facility to fund investments in organic growth, acquisitions, and share repurchases | Metric | As of Jan 28, 2024 | | :-------------------- | :----------------- | | Net debt | $1,892M | | Net Debt Leverage | 2.1x | - The increase in Net Debt Leverage was primarily attributable to **higher borrowings** under the **Senior ABL Credit Facility** to fund investments in **organic growth, acquisitions, and share repurchases** throughout fiscal 2023[41](index=41&type=chunk) [Liquidity and Capital Resources](index=3&type=section&id=Liquidity_and_Capital_Resources) This section details Core & Main's debt facilities, available liquidity, and strategies for managing interest rate exposure to support capital resources [Debt Facilities](index=4&type=section&id=Debt_Facilities) As of January 28, 2024, Core & Main had $430 million outstanding borrowings on its Senior ABL Credit Facility, with approximately $804 million available for borrowing. Additionally, on February 9, 2024, the company entered into a new $750 million incremental seven-year term loan, the 2031 Senior Term Loan, maturing on February 9, 2031, with quarterly principal payments | Facility | Outstanding (Jan 28, 2024) | Available (Jan 28, 2024) | Total Capacity | | :-------------------------- | :------------------------- | :----------------------- | :------------- | | Senior ABL Credit Facility | $430M | $804M | $1,250M | - Entered into a **$750 million incremental seven-year term loan** (2031 Senior Term Loan) on February 9, 2024, maturing on February 9, 2031, with quarterly principal payments[56](index=56&type=chunk) [Interest Rate Management](index=4&type=section&id=Interest_Rate_Management) To mitigate exposure to variable interest rates, Core & Main entered into an interest rate swap on February 12, 2024. This swap involves making fixed payments at 3.913% and receiving payments based on the one-month Term SOFR rate, with a notional amount starting at $750 million and increasing to $1,500 million by July 2026, maturing in July 2028 - Entered into an **interest rate swap** on February 12, 2024, to reduce exposure to variable interest rates under the 2031 Senior Term Loan[7](index=7&type=chunk) - The swap involves making payments at a **fixed interest rate of 3.913%** and receiving payments based on the one-month Term SOFR rate[7](index=7&type=chunk) - The interest rate swap has a starting notional amount of **$750 million**, increasing to **$1,500 million** on July 27, 2026, through its maturity on July 27, 2028[7](index=7&type=chunk) [Fiscal Year 2024 Outlook](index=4&type=section&id=Fiscal_Year_2024_Outlook) Core & Main projects improved end market volumes and M&A-driven sales growth for fiscal 2024, with net sales between $7.4 billion and $7.6 billion and Adjusted EBITDA between $925 million and $975 million | Metric | FY2024 Outlook Range | | :-------------------------- | :------------------- | | Net sales | $7,400M - $7,600M | | Adjusted EBITDA (Non-GAAP) | $925M - $975M | | Adjusted EBITDA margin (Non-GAAP) | 12.5% - 12.8% | | Operating Cash Flow Conversion (Non-GAAP) | 60% - 70% of Adjusted EBITDA | - Expect **end market volumes to improve**, providing a foundation to gain market share through product, customer, and geographic expansion initiatives[42](index=42&type=chunk) - M&A completed during and after the year is expected to contribute **6% to 7% of sales growth**, with price contribution roughly flat for the year[42](index=42&type=chunk) [Non-GAAP Financial Measures](index=10&type=section&id=Non_GAAP_Financial_Measures) This section defines Core & Main's non-GAAP financial measures, explains their purpose and limitations, and provides reconciliation to comparable GAAP measures [Definitions and Purpose](index=10&type=section&id=Definitions_and_Purpose) Core & Main uses non-GAAP measures like EBITDA and Adjusted EBITDA to assess operational performance, acknowledging their limitations as they do not fully reflect GAAP financial performance or liquidity - EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Operating Cash Flow Conversion, and Net Debt Leverage are **non-GAAP financial measures** used to assess operating results and business effectiveness[11](index=11&type=chunk)[46](index=46&type=chunk) - These measures are **not considered measures of financial performance or liquidity under GAAP** and should not be considered in isolation or as alternatives to GAAP measures[11](index=11&type=chunk)[47](index=47&type=chunk) - Limitations include **not reflecting cash requirements for depreciation, amortization, interest expense, or income taxes**[12](index=12&type=chunk)[25](index=25&type=chunk)[61](index=61&type=chunk) [Reconciliation to GAAP](index=11&type=section&id=Reconciliation_to_GAAP) The report provides a reconciliation of net income to EBITDA and Adjusted EBITDA, along with a calculation of Adjusted EBITDA margin for the presented periods. A separate table also details the calculation of Net Debt Leverage. However, no reconciliation for the estimated range of fiscal 2024 Adjusted EBITDA, Adjusted EBITDA margin, or Operating Cash Flow Conversion is included due to the high variability and difficulty in predicting certain excluded items Reconciliation of Net Income to EBITDA and Adjusted EBITDA (Amounts in millions) | Metric | Q4 FY2024 | Q4 FY2023 | FY2024 | FY2023 | | :----------------------------------------- | :-------- | :-------- | :------- | :------- | | Net income attributable to Core & Main, Inc. | $63 | $54 | $371 | $366 | | Plus: net income attributable to non-controlling interests | $13 | $30 | $160 | $215 | | Net income | $76 | $84 | $531 | $581 | | Depreciation and amortization | $38 | $36 | $149 | $143 | | Provision for income taxes | $18 | $20 | $128 | $128 | | Interest expense | $22 | $20 | $81 | $66 | | **EBITDA** | **$154** | **$160** | **$889** | **$918** | | Equity-based compensation | $2 | $2 | $10 | $11 | | Acquisition expenses | $2 | $2 | $6 | $5 | | Offering expenses | $2 | — | $5 | $1 | | **Adjusted EBITDA** | **$160** | **$164** | **$910** | **$935** | | Net Sales | $1,440 | $1,374 | $6,702 | $6,651 | | Adjusted EBITDA Margin | 11.1% | 11.9% | 13.6% | 14.1% | Net Debt Leverage Calculation (Amounts in millions) | Metric | As of Jan 28, 2024 | As of Jan 29, 2023 | | :-------------------------- | :----------------- | :----------------- | | Senior ABL Credit Facility due July 2026 | $430 | $0 | | Senior Term Loan due July 2028 | $1,478 | $1,478 | | Total Debt | $1,908 | $1,478 | | Less: Cash & Cash Equivalents | ($1) | ($177) | | Net Debt | $1,907 | $1,301 | | Twelve Months Ended Adjusted EBITDA | $910 | $935 | | Net Debt Leverage | 2.1x | 1.4x | - No reconciliation of the estimated range for Adjusted EBITDA, Adjusted EBITDA margin or Operating Cash Flow Conversion for fiscal 2024 is included due to the **high variability and difficulty to predict certain excluded items**[26](index=26&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated_Financial_Statements) This section presents Core & Main's Consolidated Statements of Operations, Balance Sheets, and Cash Flows for the reported fiscal periods [Consolidated Statements of Operations](index=7&type=section&id=Consolidated_Statements_of_Operations) The Consolidated Statements of Operations detail Core & Main's financial performance, including net sales, gross profit, operating expenses, and net income for the reported periods Consolidated Statements of Operations (Amounts in millions, except per share data) | Metric | Three Months Ended Jan 28, 2024 | Three Months Ended Jan 29, 2023 | Fiscal Years Ended Jan 28, 2024 | Fiscal Years Ended Jan 29, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Net sales | $1,440 | $1,374 | $6,702 | $6,651 | | Cost of sales | 1,056 | 1,001 | 4,884 | 4,856 | | Gross profit | 384 | 373 | 1,818 | 1,795 | | Operating expenses: | | | | | | Selling, general and administrative | 230 | 213 | 931 | 880 | | Depreciation and amortization | 38 | 36 | 147 | 140 | | Total operating expenses | 268 | 249 | 1,078 | 1,020 | | Operating income | 116 | 124 | 740 | 775 | | Interest expense | 22 | 20 | 81 | 66 | | Income before provision for income taxes | 94 | 104 | 659 | 709 | | Provision for income taxes | 18 | 20 | 128 | 128 | | Net income | 76 | 84 | 531 | 581 | | Net income attributable to Core & Main, Inc. | $63 | $54 | $371 | $366 | | Earnings per share - Basic | $0.35 | $0.31 | $2.15 | $2.16 | | Earnings per share - Diluted | $0.34 | $0.31 | $2.15 | $2.13 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated_Balance_Sheets) The Consolidated Balance Sheets present the company's financial position as of January 28, 2024, and January 29, 2023, detailing assets (current and non-current), liabilities (current and long-term), and stockholders' equity Consolidated Balance Sheets (Amounts in millions) | Asset/Liability/Equity | January 28, 2024 | January 29, 2023 | | :----------------------------------------- | :--------------- | :--------------- | | **ASSETS** | | | | Cash and cash equivalents | $1 | $177 | | Receivables, net | 973 | 955 | | Inventories | 766 | 1,047 | | Total current assets | 1,773 | 2,211 | | Property, plant and equipment, net | 151 | 105 | | Goodwill | 1,561 | 1,535 | | Total assets | $5,069 | $4,909 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Current maturities of long-term debt | $15 | $15 | | Accounts payable | 504 | 479 | | Total current liabilities | 774 | 726 | | Long-term debt | 1,863 | 1,444 | | Tax receivable agreement liabilities | 706 | 180 | | Total liabilities | 3,545 | 2,499 | | Total stockholders' equity attributable to Core & Main, Inc. | 1,451 | 1,747 | | Non-controlling interests | 73 | 663 | | Total stockholders' equity | 1,524 | 2,410 | | Total liabilities and stockholders' equity | $5,069 | $4,909 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated_Statements_of_Cash_Flows) The Consolidated Statements of Cash Flows detail the cash inflows and outflows from operating, investing, and financing activities for the fiscal years ended January 28, 2024, and January 29, 2023, highlighting the significant increase in net cash provided by operating activities Consolidated Statements of Cash Flows (Amounts in millions) | Cash Flow Activity | FY2023 | FY2022 | | :----------------------------------------- | :------- | :------- | | Net cash provided by operating activities | $1,069 | $401 | | Net cash used in investing activities | ($270) | ($152) | | Net cash used in financing activities | ($975) | ($73) | | (Decrease) increase in cash and cash equivalents | ($176) | $176 | | Cash and cash equivalents at the end of the period | $1 | $177 | - Net cash provided by operating activities for fiscal 2023 was **$1,069 million**, a **$668 million improvement** from fiscal 2022, primarily driven by **inventory optimization efforts**[6](index=6&type=chunk)[24](index=24&type=chunk) - Significant cash usage in financing activities for FY2023 was primarily due to **repurchase and retirement of partnership interests ($1,344 million)**[24](index=24&type=chunk) [Company Information & Forward-Looking Statements](index=5&type=section&id=Company_Information_Forward_Looking_Statements) This section provides an overview of Core & Main, outlines cautionary notes regarding forward-looking statements, and lists investor relations contact information [About Core & Main](index=5&type=section&id=About_Core_Main) Core & Main is a leading specialized distributor of water, wastewater, storm drainage, and fire protection products and services across approximately 335 U.S. locations - Core & Main is a leader in advancing reliable infrastructure, specializing in **water, wastewater, storm drainage, and fire protection products and services**[43](index=43&type=chunk) - Serves **municipalities, private water companies, and professional contractors** across municipal, non-residential, and residential end markets[43](index=43&type=chunk) - Operates approximately **335 locations** across the U.S. with **5,000 associates**, providing local expertise backed by a national supply chain[43](index=43&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary_Note_Regarding_Forward_Looking_Statements) This section warns that forward-looking statements are subject to various known and unknown risks and uncertainties that could materially alter actual results, with no obligation to update them - Forward-looking statements are subject to **known and unknown risks, uncertainties, and other factors** that may cause actual results to differ materially from those projected[9](index=9&type=chunk)[58](index=58&type=chunk) - Key risk factors include **declines in U.S. construction markets**, **slowdowns in municipal spending**, **price fluctuations**, **acquisition risks**, competitive markets, personnel retention, **supply chain disruptions**, and **increases in interest rates**[9](index=9&type=chunk) - The company undertakes **no obligation to update or revise publicly any forward-looking statements**, except as required by law[44](index=44&type=chunk) [Investor Relations Contact](index=6&type=section&id=Investor_Relations_Contact) For investor relations inquiries, individuals can contact Robyn Bradbury via phone or email - Investor Relations Contact: **Robyn Bradbury**, **314-995-9116**, **InvestorRelations@CoreandMain.com**[23](index=23&type=chunk)

ST. LOUIS--(BUSINESS WIRE)--Core & Main Inc. (NYSE: CNM), a leader in advancing reliable infrastructure with local service, nationwide, has entered into a definitive agreement to acquire NW Geosynthetics Inc., doing business as ACF West Inc. ACF West is a leading distributor of geosynthetic materials and provider of soil stabilization solutions with six locations in the western United States. “We are excited to grow our geosynthetics footprint across the western United States through the addition of ACF ...