SiteOne(US:SITE)2024-10-30 10:01Sales Performance - Organic Daily Sales declined by 1% and 2% for the three and nine months ended September 29, 2024, respectively, with price deflation reducing Organic Daily Sales by approximately 3% in both periods[142] - Net sales grew by 6% for the three and nine months ended September 29, 2024, primarily driven by acquisitions[142] - Net sales for Q3 2024 increased by 6% to $1,208.8 million compared to $1,145.1 million in Q3 2023, and for the nine months ended September 29, 2024, net sales rose 6% to $3,527.5 million from $3,336.2 million in the same period last year, primarily driven by acquisitions[171] - Acquisitions contributed $77.3 million, or 7%, to net sales growth for Q3 2024 and $243.0 million, or 7%, for the nine months ended September 29, 2024[171] Profitability - Net income attributable to SiteOne decreased to $44.4 million in the third quarter of 2024 from $57.3 million in the same period of 2023, and declined to $145.3 million for the nine months ended September 29, 2024, from $176.8 million for the same prior year period[142] - Gross profit for Q3 2024 increased by 6% to $411.0 million compared to $388.1 million in Q3 2023, and for the nine months ended September 29, 2024, it rose 5% to $1,222.5 million from $1,164.6 million in the same period last year, driven by net sales growth including acquisitions[173] - Adjusted EBITDA for Q3 2024 was $114.8 million, down from $210.5 million in Q3 2023, reflecting a significant decline in operating performance[181] - Gross profit for Q3 2024 was $411.0 million, down from $510.3 million in Q3 2023, reflecting lower price realization and organic daily sales decrease[181] Expenses - Selling, general and administrative expenses increased by 12% and 10% for the three and nine months ended September 29, 2024, respectively, primarily reflecting the impact of acquisitions[142] - Selling, general and administrative expenses (SG&A) increased 12% to $349.1 million for Q3 2024 compared to $311.8 million for Q3 2023, and increased 10% to $1,020.6 million for the nine months ended September 29, 2024 compared to $923.8 million for the same period in 2023[174] - Depreciation and amortization expense rose by $4.6 million to $35.9 million for Q3 2024, and increased $10.3 million to $103.4 million for the nine months ended September 29, 2024, primarily due to acquisitions[174] Cash Flow and Working Capital - Net cash provided by operating activities decreased to $164.0 million for the nine months ended September 29, 2024, compared to $189.9 million for the same prior year period[142] - Working capital increased to $991.7 million as of September 29, 2024, up by $164.7 million from $827.0 million as of December 31, 2023[192] - Net cash used in investing activities was $140.3 million for the nine months ended September 29, 2024, compared to $209.2 million for the same period in 2023[197] Market Outlook - The long-term outlook for the landscape supply industry remains strong, driven by favorable population trends, housing demand, and continued interest in outdoor living[143] - The company anticipates continued pressure on net sales growth and net income through the remainder of 2024 due to elevated interest rates and reduced consumer spending[142] - Price deflation is projected to be approximately 3% for the 2024 Fiscal Year, exceeding the initial anticipated range of down 1% to 2%[142] Strategic Initiatives - The company remains committed to its strategic and operational initiatives, focusing on driving growth organically and through acquisitions[143] - The company is focusing on strategic initiatives to improve profitability, enhance supply chain efficiency, and invest in information technology systems and data analytics[166] - The company continues to enhance its B2B e-Commerce platform, SiteOne.com, to improve customer demand and account management functionality[166] Debt and Financing - Cash and cash equivalents as of September 29, 2024, totaled $85.5 million, with total gross long-term debt at $416.0 million[191] - Total interest on long-term debt increased to $153.9 million as of September 29, 2024, up by $41.5 million since December 31, 2023[194] - The ABL Facility has a total commitment of $600.0 million, with a maturity date of July 22, 2027, and interest rates on outstanding balances were 6.33577% as of September 29, 2024[213][216] Tax and Compliance - The effective tax rate increased to 26.2% for Q3 2024 from 23.4% for Q3 2023, primarily due to a decrease in excess tax benefits from stock-based compensation[176] - Management confirmed the effectiveness of disclosure controls and procedures, ensuring timely reporting as per SEC rules[238] - No significant changes in internal control over financial reporting during the last fiscal quarter[239] Legal and Regulatory - Company is not currently involved in any material litigation or arbitration that could materially affect its financial position[241]