Core & Main(US:CNM)2024-09-04 11:31Financial Performance - Net sales for the second quarter of fiscal 2024 increased by 5.5% to $1,964 million compared to $1,861 million in the same quarter of fiscal 2023[2]. - Gross profit for the second quarter increased by 3.4% to $518 million, with a gross profit margin of 26.4%, down 50 basis points from the previous year[2][7]. - Net income for the second quarter decreased by 23.2% to $126 million, and diluted earnings per share decreased by 7.6% to $0.61[2][9]. - Adjusted EBITDA for the second quarter decreased by 4.8% to $257 million, with an Adjusted EBITDA margin of 13.1%, down 140 basis points year-over-year[2][10]. - Operating income decreased to $204 million for the second quarter of fiscal 2024, down from $226 million in the same quarter of the previous year[30]. - Basic earnings per share for the second quarter were $0.62, down from $0.66 in the same period last year[30]. - Adjusted EBITDA for the six months ended July 28, 2024, was $474 million, down from $490 million for the same period in 2023, reflecting a decrease of 3.3%[39]. - Adjusted EBITDA margin for the three months ended July 28, 2024, was calculated at 102.3% of net sales, compared to 103.6% for the same period in 2023[39]. Acquisitions and Business Expansion - The company acquired five new businesses during and after the quarter, enhancing its geographic reach and product offerings[2][3]. - Acquisitions of businesses totaled $596 million during the second quarter, reflecting the company's strategy for market expansion[33]. Debt and Cash Flow - As of July 28, 2024, net debt was $2,439 million, with a Net Debt Leverage ratio of 2.7x, an increase of 1.0x from the previous year[18]. - Long-term debt rose to $2,404 million as of July 28, 2024, compared to $1,863 million at the end of January 2024, indicating increased leverage[31]. - Total Debt increased to $2,452 million as of July 28, 2024, compared to $1,585 million as of July 30, 2023, marking a significant increase of 55%[42]. - Net cash provided by operating activities for the second quarter was $48 million, a decrease of $234 million compared to the same quarter last year[17]. - The company reported a net cash provided by operating activities of $126 million for the second quarter, a decrease from $402 million in the same quarter last year[33]. Shareholder Returns - The company announced a $500 million share repurchase program, marking its first standing share repurchase authorization since becoming public[4]. Expenses - SG&A expenses for the second quarter increased by 12.6% to $268 million, primarily due to acquisitions[8]. - Interest expense for the six months ended July 28, 2024, was $70 million, up from $39 million for the same period in 2023, reflecting an increase of 79.5%[39]. - Equity-based compensation expenses for the three months ended July 28, 2024, were $4 million, compared to $3 million for the same period in 2023, showing a 33.3% increase[39]. - The company reported depreciation and amortization expenses of $167 million for the twelve months ended July 28, 2024, compared to $146 million for the same period in 2023[40]. Outlook - For fiscal 2024, the company revised its net sales outlook to a range of $7.3 to $7.4 billion and Adjusted EBITDA to a range of $900 to $930 million due to weather disruptions and lower end-market volumes[20]. - Core & Main expects variability in acquisition expenses to impact future GAAP financial results, indicating potential unpredictability in earnings[38].