Core & Main(CNM) - 2025 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended October 27, 2024, were $2,038 million, an increase from$ 1,827 million in the same period last year, representing a growth of 11.5%[17] - Gross profit for the nine months ended October 27, 2024, was $1,529 million, compared to$ 1,434 million for the same period last year, reflecting a year-over-year increase of 6.6%[17] - Operating income for the three months ended October 27, 2024, was $223 million, slightly up from$ 217 million in the prior year, indicating a growth of 2.8%[17] - Net income attributable to Core & Main, Inc. for the three months ended October 27, 2024, was $133 million, compared to$ 112 million for the same period last year, marking a 18.8% increase[17] - The total comprehensive income attributable to Core & Main, Inc. for the three months ended October 27, 2024, was $124 million, up from$ 109 million in the prior year, indicating a growth of 13.8%[19] - Net income for the period ending October 27, 2024, is reported at $140 million, reflecting an increase from previous periods[22] - Net income for the three months ended October 29, 2023, was$ 156 million, with a total of $368 million for the nine months ended October 27, 2024[58] - Net income available to Class A common stock for the nine months ended October 27, 2024, was$ 347 million, with a net income per share of $1.81[82] Assets and Liabilities - Total assets as of October 27, 2024, were$ 6,215 million, up from $5,069 million as of January 28, 2024, representing a growth of 22.6%[14] - Total liabilities increased to$ 4,465 million as of October 27, 2024, from $3,545 million as of January 28, 2024, reflecting a rise of 25.9%[14] - The company’s long-term debt increased to$ 2,384 million as of October 27, 2024, from $1,863 million as of January 28, 2024, reflecting a rise of 27.8%[14] - As of October 27, 2024, total stockholders' equity stands at$ 1,750 million, with common shares totaling 190,189,434[22] - The carrying amount of goodwill as of October 27, 2024, was $1.884 billion, an increase from$ 1.561 billion as of January 28, 2024[60] - The company's intangible assets included customer relationships valued at $1.768 billion as of October 27, 2024, with accumulated amortization of$ 829 million[61] Cash Flow and Capital Management - Cash and cash equivalents stood at $10 million as of October 27, 2024, compared to$ 1 million as of January 28, 2024, showing a significant increase[14] - Cash flows from operating activities for the nine months ended October 29, 2023, provided $775 million, a decrease from$ 386 million in the current period[28] - The company repurchased and retired equity interests amounting to $100 million, reflecting a strategic move to manage capital structure[22] - The company repurchased 2,890,483 shares of Class A common stock for a total of$ 121 million during the nine months ended October 27, 2024[32] - The company’s total consideration paid for repurchase transactions during fiscal 2023 amounted to $1,078 million[37] Acquisitions and Growth - The company completed acquisitions during the nine months ended October 27, 2024, with an aggregate transaction value of$ 748 million, compared to $161 million for the same period in 2023[47] - Total assets acquired in Fiscal 2024 amounted to$ 876 million, significantly higher than $199 million in Fiscal 2023[53] - Net assets acquired in Fiscal 2024 were$ 753 million, compared to $159 million in Fiscal 2023[53] - The total consideration for acquisitions in Fiscal 2024, net of cash, was$ 722 million, up from $151 million in Fiscal 2023[53] - Goodwill from Fiscal 2024 acquisitions was$ 322 million, while goodwill from Fiscal 2023 acquisitions was $17 million[60] Revenue Breakdown - The company reported revenue from pipes, valves, and fittings products of$ 1,386 million for the three months ended October 27, 2024, up from $1,222 million in the same period of 2023, indicating a growth of 13.4%[45] - The company’s revenue from storm drainage products increased to$ 327 million for the three months ended October 27, 2024, compared to $290 million in the same period of 2023, reflecting a growth of 12.8%[45] - The company’s revenue from fire protection products decreased to$ 145 million for the three months ended October 27, 2024, down from $170 million in the same period of 2023, a decline of 14.7%[45] - The company’s revenue from meter products increased to$ 180 million for the three months ended October 27, 2024, compared to $145 million in the same period of 2023, representing a growth of 24.1%[45] Debt and Interest Rates - The company's total debt as of October 27, 2024, was$ 2.430 billion, reflecting various long-term debt obligations[63] - Core & Main LP amended the $1,500 million 2028 Senior Term Loan, reducing the effective applicable margin from 2.60% to 2.00%[64] - The weighted average interest rate for the 2028 Senior Term Loan was 6.86% as of October 27, 2024, with a fair value of$ 1,449 million[64] - An additional $750 million 2031 Senior Term Loan was entered into, maturing on February 9, 2031, with a weighted average interest rate of 7.11%[64] - Each one percentage point change in interest rates would result in an approximately$ 22 million change in annual interest expense under the Senior Term Loan Credit Facility[161] Tax and Regulatory Matters - Core & Main LP's effective tax rate increased to 25.1% for the three months ended October 27, 2024, compared to 19.8% for the same period in 2023[71] - The company recorded payables under Tax Receivable Agreements of $721 million as of October 27, 2024, with expected payments of$ 19 million in the next 12 months[72] Operational Highlights - The company has approximately 350 branches across 49 states, providing specialized distribution services[30] - The Company’s largest customer accounted for less than 1% of net sales, indicating a diverse customer base[162] - The company aims to recover increases in product costs by passing them on to customers, which may affect gross profit margins[164]