SiteOne(SITE) - 2025 Q1 - Quarterly Report

Financial Performance - Organic Daily Sales growth was 1% for the three months ended March 31, 2024, with price deflation reducing Organic Daily Sales by 4%[118] - Net sales growth was 8% for the three months ended March 31, 2024, primarily driven by contributions from acquisitions[118] - Net loss increased to $19.3 million for the three months ended March 31, 2024, compared to $4.5 million for the same period in 2023[118] - Net sales for Q1 2024 increased by 8% to $904.8 million compared to $837.4 million in Q1 2023, primarily driven by acquisitions[143] - Organic Daily Sales for Q1 2024 increased by 1%, with agronomic products up 10% and landscaping products down 2%[143] - Acquisitions contributed $62.5 million, or 7%, to the net sales growth in Q1 2024[143] - Gross profit increased by 5% to $301.2 million, but gross margin decreased by 100 basis points to 33.3%[145] - Net loss for Q1 2024 was $19.3 million, an increase of $14.8 million compared to a net loss of $4.5 million in Q1 2023[149] - Adjusted EBITDA for Q1 2024 was $21.1 million, a decrease from $39.9 million in Q4 2023 and $119.8 million in Q1 2023[155] Cost and Expenses - Gross margin decreased by 100 basis points for the three months ended March 31, 2024, due to lower price realization[118] - Cost of goods sold rose by 10% to $603.6 million in Q1 2024, attributed mainly to acquisitions[144] - Selling, general and administrative expenses increased by 12% to $327.7 million, with SG&A as a percentage of net sales rising to 36.2%[146] Cash Flow and Capital Expenditures - Net cash used in operating activities decreased to $99.3 million for the three months ended March 31, 2024, from $152.6 million for the same period in 2023[118] - Net cash used in investing activities was $7.3 million, significantly lower than $39.6 million in the prior year, with no acquisition investments in the first three months of 2024[169] - Capital expenditures increased to $8.9 million in Q1 2024 from $7.1 million in Q1 2023, driven by investments in material handling equipment[169] - Net cash provided by financing activities was $65.7 million, down from $203.4 million in the same period last year, due to lower borrowings under the ABL Facility[170] Debt and Interest Rates - The company had total cash and cash equivalents of $41.5 million and total gross long-term debt of $453.8 million as of March 31, 2024[163] - The company's gross long-term debt increased by $74.8 million since December 31, 2023, reaching a total of $453.8 million as of March 31, 2024[166] - Interest on long-term debt rose by $10.9 million to $123.3 million, primarily due to increased borrowings under the ABL Facility[166] - The interest rate on outstanding balances under the ABL Facility ranged from 6.54483% to 6.55167% as of March 31, 2024[183] - The ABL Facility has a total commitment of $600.0 million, with a maturity date of July 22, 2027[180] - The New Term Loans bear interest at an adjusted Term SOFR rate plus an applicable margin of 2.00%, with a maturity date of March 23, 2028[178] Strategic Initiatives and Outlook - The company has a robust acquisition pipeline and is committed to driving growth organically and through acquisitions[119] - Economic headwinds, including elevated interest rates and reduced consumer spending, are expected to continue impacting net sales growth and net income in 2024[118] - The long-term outlook for the landscape supply industry remains strong, driven by favorable population trends and increased interest in outdoor living[119] - Strategic initiatives include enhancing supply chain efficiency, improving pricing and category management, and investing in IT systems and data analytics[138] - The company continues to expand its distribution network and improve its B2B e-commerce platform to enhance customer service and reduce costs[139] Market and Risk Factors - The company faces interest rate risk related to existing and future debt issuances, utilizing interest rate swap contracts to mitigate this risk[192] - Subsidiaries' ability to pay dividends is restricted by their operating results, cash requirements, financial condition, and legal restrictions[190] - There have been no material changes to critical accounting estimates, including inventory valuation and goodwill, as noted in the Annual Report for the 2023 Fiscal Year[199] - No material changes have occurred in market risk disclosures since the Annual Report for the 2023 Fiscal Year[203]