SiteOne(SITE) - 2026 Q1 - Quarterly Report

Financial Performance - For the three months ended March 30, 2025, Organic Daily Sales declined by 1% compared to the prior year period, primarily due to a later start to the spring selling season and lower prices for commodity products [118]. - Net sales growth for the same period was 4%, primarily driven by acquisitions, despite a negative pricing trend that began in the second half of the 2023 Fiscal Year [118]. - Gross margin decreased by 30 basis points for the three months ended March 30, 2025, primarily due to lower price realization and higher freight expenses [118]. - Net loss attributable to SiteOne was $27.3 million for the three months ended March 30, 2025, compared to a net loss of$19.3 million for the same period in 2024 [118]. - Net cash used in operating activities was $129.6 million for the three months ended March 30, 2025, compared to$99.3 million for the same period in 2024 [118]. - Selling, general and administrative expenses increased by 5% for the three months ended March 30, 2025, primarily reflecting the impact of acquisitions [118]. - Net sales for the three months ended March 30, 2025, increased 4% to $939.4 million compared to$904.8 million for the same period in 2024, primarily driven by acquisitions [141]. - Organic Daily Sales decreased 1% year-over-year due to a later start to the spring selling season and lower prices for commodity products, with acquisitions contributing $45.1 million, or 5$309.8 million, while gross margin decreased by 30 basis points to 33.0% due to lower price realization and higher freight expenses [145]. - Net income attributable to SiteOne for Q1 2025 was a loss of $27.3 million, compared to a loss of$19.3 million in Q1 2024 [157]. - Adjusted EBITDA for Q1 2025 was $22.4 million, down from$21.1 million in Q1 2024 [157]. - The company reported a net loss per share of $0.61 for Q1 2025, compared to a loss of$0.43 per share in Q1 2024 [157]. - The contribution from acquisitions in Q1 2025 was $45.1 million, with no contribution from acquisitions in Q1 2024 [161]. - The company reported an operating loss of$29.5 million in Q1 2025, compared to a loss of $22.3 million in Q1 2024 [157]. Economic Outlook - The company anticipates sustained pressure on net sales growth and net income for the foreseeable future due to economic challenges [118]. - The long-term outlook for the landscape supply industry remains strong, driven by favorable population trends and continued interest in outdoor living [119]. - The impact of pricing is projected to be flat to up 1$21.0 million for the three months ended March 30, 2025, from $7.3 million in the prior year, reflecting higher capital expenditures [170]. - Net cash provided by financing activities was$100.0 million for the three months ended March 30, 2025, compared to $65.7 million for the same period in 2024, driven by higher borrowings under the ABL Facility [171]. - The company incurred$325.0 million of new term loans as part of the Fifth Amendment to the Amended and Restated Credit Agreement [172]. - The company expects sufficient liquidity from cash on hand and operations to meet its requirements for the next 12 months [164]. - Working capital increased by $97.4 million to$1,006.2 million as of March 30, 2025, primarily due to seasonal business factors and early inventory purchases [167]. Interest Rates and Debt - The effective tax rate for the first quarter of 2025 was 25.5%, down from 33.4% in the prior year, primarily due to a decrease in excess tax benefits from stock-based compensation [149]. - Interest and other non-operating expenses increased to $7.4 million for the three months ended March 30, 2025, attributed to higher average borrowings [148]. - The interest rate on the outstanding balance of the Tranche B Term Loans was 6.06406$600.0 million [181]. - The company has a minimum consolidated fixed charge coverage ratio of at least 1.00 to 1.00, tested when specified availability is below 10% [187]. - Interest rate swaps were utilized to convert variable interest rates to fixed rates, with existing contracts terminated upon maturity on March 23, 2025 [201]. - The company has recognized $5.9 million in liabilities related to interest rate swap arrangements, reclassified into long-term debt [196]. - The company is subject to interest rate risk due to existing and future debt issuances, with all term loan borrowings now subject to variable interest rates following the termination of interest rate swaps [201]. Regulatory and Compliance - The ability of subsidiaries to pay dividends is restricted based on their operating results and financial condition [191]. - The agreements governing the credit facilities restrict subsidiaries from making distributions or loans to the parent company [192]. - There have been no material changes to critical accounting estimates, including inventory valuation and goodwill, as noted in the most recent Annual Report [198]. - The company has a commitment fee of 0.25% on undrawn portions of the Devil Mountain ABL Facility [190].