Financial Data and Key Metrics Changes - For fiscal 2025, the company generated net sales of $7.65 billion, adjusted EBITDA of $931 million, and adjusted diluted EPS of $2.97, reflecting a 3% increase in net sales compared to the previous year [9][35] - Adjusted EBITDA margin declined by 30 basis points to 12.2%, while gross margin increased by 30 basis points to 26.9% due to higher private label penetration and disciplined purchasing [36][37] - Operating cash flow for the year was $650 million, representing a conversion rate of approximately 70% from adjusted EBITDA [38] Business Line Data and Key Metrics Changes - Municipal projects accounted for 44% of sales, with low- to mid-single-digit growth, while non-residential sales were relatively flat, and residential lot development declined low double digits [5][10] - The company achieved 3 points of organic above-market growth, driven by sales initiatives and geographic expansion, including the opening of 10 new branches [13][14] - The smart metering business grew at an average annual rate of approximately 14% over the past five years, with significant contributions from large contracts [24][82] Market Data and Key Metrics Changes - The addressable market across the U.S. and Canada is estimated at $44 billion, up approximately $5 billion from the previous year, with the company holding about 20% market share in the U.S. [6][7] - The residential market is expected to remain challenged in the near term due to housing affordability and higher mortgage rates, but long-term demand drivers remain strong [11][18] Company Strategy and Development Direction - The company aims to extend its competitive advantages, compound market share gains, and expand structural earnings power [16][42] - Investments are being made in product offerings, capabilities, and geographic expansion to drive market share gains and support margin expansion [21][31] - The company is focused on disciplined M&A to complement organic growth, with a pipeline of over 50 opportunities evaluated annually [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the municipal market due to stable funding sources, while remaining cautious about the private construction market amid geopolitical volatility and interest rate uncertainties [40][41] - The company expects net sales for fiscal 2026 to be between $7.8 billion and $7.9 billion, with adjusted EBITDA of $950 million to $980 million [39] Other Important Information - The company returned $155 million to shareholders through share repurchases during the year, reducing the share count by approximately 3.2 million [38] - The company has a strong liquidity position with $1.45 billion available, including $220 million in cash [38] Q&A Session Summary Question: Growth disconnect of Core & Main versus competitors - Management acknowledged differences in market presence and product mix, noting strong share growth in smart meters and treatment plants, while recognizing competitors' advantages in certain markets [46][49] Question: Cost out program and its impact - Management confirmed that the $30 million cost out program was completed in FY 2025, with benefits expected to continue into FY 2026 [52] Question: Current market conditions and commodity inflation - Management is monitoring the impact of geopolitical events on fuel and resin prices, indicating potential price increases in certain product categories [56][58] Question: Growth investments in data centers and treatment plants - The company plans to invest in additional resources for treatment plant initiatives, enhancing capabilities for larger projects [64] Question: EBITDA guidance and its components - Management provided insights on the guidance range, emphasizing the importance of pricing stability and potential inflation impacts on margins [70][73] Question: M&A strategy and expectations - Management expressed confidence in the M&A pipeline, anticipating a return to a more normalized cadence of acquisitions in the coming years [76] Question: Growth expectations for the meters business - The meters business is expected to continue delivering low double-digit growth, supported by a strong pipeline of large projects [82]

Financial Data and Key Metrics Changes - Core & Main reported net sales of $7.65 billion for fiscal 2025, reflecting a 3% increase year-over-year, with a 5% growth when adjusted for one less selling week [33][34] - Adjusted EBITDA for the year was $931 million, slightly ahead of the prior year, while adjusted EBITDA margin declined 30 basis points to 12.2% [35] - Adjusted diluted EPS increased by 7% to $2.97, driven by lower interest expenses and a reduced share count from share repurchases [35] Business Line Data and Key Metrics Changes - Municipal projects accounted for 44% of sales, with low to mid-single-digit growth, while non-residential sales were relatively flat, and residential lot development declined low double digits [5][10][34] - Average daily net sales for meter products grew by 12% in the fourth quarter and mid-single digits for the year, following a strong prior year growth comparison of 32% [12][33] - The company achieved 3 points of organic above-market growth in fiscal 2025, driven by sales initiatives and geographic expansion [12][34] Market Data and Key Metrics Changes - The addressable market for Core & Main is estimated at $44 billion, up approximately $5 billion from the previous year, with the U.S. market share at around 20% [6][7] - The company expects overall end markets to remain roughly flat for the year, with municipal demand providing stability amid uncertainties in the private construction market [38][40] Company Strategy and Development Direction - Core & Main aims to extend its competitive advantages, compound market share gains, and expand structural earnings power [15][40] - The company is focusing on investments in smart metering, treatment plants, and geographic expansion to drive above-market growth [19][22] - Acquisitions and greenfield openings are key strategies for expanding the company's footprint and unlocking new growth opportunities [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the municipal market due to stable funding sources, while remaining cautious about the private construction market amid geopolitical volatility and interest rate uncertainties [38][40] - The company anticipates a return to growth in residential markets to address the significant undersupply of housing in the U.S. [11][17] Other Important Information - The company generated $650 million of operating cash flow during the year, reflecting a conversion rate of approximately 70% from adjusted EBITDA [36] - Core & Main returned $155 million to shareholders through share repurchases during the year, reducing the share count by roughly 3.2 million [36] Q&A Session Summary Question: Growth disconnect of Core & Main versus competitors - Management acknowledged differences in market presence and product mix, noting strong share growth in smart metering and treatment plants, while recognizing competitors' advantages in certain markets [43][44][45] Question: Cost out program and its impact - Management confirmed that the $30 million cost out program was completed in FY 2025, with benefits expected to materialize in the first half of FY 2026 [48][49] Question: Current market conditions and commodity inflation - Management is monitoring the impact of geopolitical events on fuel and resin prices, indicating potential price increases in certain product categories [53][54][55] Question: Growth investments in data centers and treatment plants - The company plans to invest in additional resources for treatment plant projects, enhancing capabilities to win larger contracts [58][61] Question: EBITDA guidance and its components - Management provided insights on the guidance range, emphasizing the importance of pricing stability and potential inflation impacts on SG&A [66][70] Question: M&A strategy and future expectations - Management expressed confidence in the M&A pipeline, anticipating a return to a more normalized cadence of acquisitions in the coming years [72][74] Question: Growth expectations for the meters business - The meters business is expected to continue delivering low double-digit growth, supported by a strong pipeline of large projects [77][80]

Financial Data and Key Metrics Changes - For fiscal 2025, the company generated net sales of $7.65 billion, an increase of approximately 3% compared to the previous year, with adjusted EBITDA of $931 million and adjusted diluted EPS of $2.97, reflecting a 7% increase [9][34][37] - Gross margin for the year was 26.9%, up 30 basis points from fiscal 2024, driven by higher private label penetration and disciplined purchasing [35][36] - Operating cash flow was $650 million, representing a conversion rate of approximately 70% from adjusted EBITDA, with a free cash flow yield of 5.8% [38] Business Line Data and Key Metrics Changes - Municipal projects accounted for 44% of sales, with low- to mid-single-digit percentage growth, while non-residential sales were roughly flat, and residential lot development declined low double digits [5][10][34] - Average daily net sales for meter products grew 12% in the fourth quarter and mid-single digits for the year, following a strong prior year growth comparison of 32% [12][34] - The company achieved 3 points of organic above-market growth in fiscal 2025, driven by sales initiatives and geographic expansion [12][34] Market Data and Key Metrics Changes - The addressable market across the U.S. and Canada is estimated at $44 billion, up approximately $5 billion from last year, with the company holding an estimated 20% market share in the U.S. [5][6] - The residential market is expected to remain challenged in the near term due to housing affordability and higher mortgage rates, but long-term demand drivers remain strong [11][18] Company Strategy and Development Direction - The company aims to extend its competitive advantages, compound market share gains, and expand structural earnings power [16][41] - Investments are being made in product offerings, capabilities, and geographic expansion, with a focus on smart metering and treatment plant solutions [20][24] - The company plans to open a record 7-10 greenfield locations in the coming year to enhance market presence [25][40] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the private construction market due to geopolitical volatility and interest rate uncertainties, while expressing confidence in the stability of the municipal market [40][41] - The company expects net sales for fiscal 2026 to be in the range of $7.8 billion to $7.9 billion, with adjusted EBITDA of $950 million to $980 million [39][40] Other Important Information - The company implemented approximately $30 million in annualized cost actions during fiscal 2025, with $6 million recognized this year [33] - The company has repurchased over 20% of its original shares outstanding since its 2021 IPO, reflecting a commitment to return capital to shareholders [38] Q&A Session Summary Question: Growth disconnect between Core & Main and competitors - Management acknowledged differences in market presence and product mix, noting strong share growth in smart metering and treatment plant areas [45][46] Question: Cost out program and its impact - Management confirmed that the $30 million cost out program was completed in FY 2025, with benefits expected to continue into FY 2026 [50][51] Question: Current market conditions and pricing - Management is monitoring the impact of geopolitical events on commodity prices, particularly resin prices, which may affect product pricing [57][59] Question: Growth investments in data centers and treatment plants - Management plans to invest in additional resources for treatment plant initiatives, enhancing capabilities for larger projects [62][64] Question: EBITDA guidance and components - Management provided insights on the guidance range, emphasizing the importance of pricing stability and potential inflation impacts [69][72] Question: M&A expectations for 2026 - Management expressed confidence in the M&A pipeline, anticipating a return to a more normalized cadence of acquisitions [75][76] Question: Growth expectations for the meters business - Management expects continued low double-digit growth in the meters business, supported by a strong pipeline of large projects [80][81]

Financial Data and Key Metrics Changes - The company reported record net sales of $1.9 billion for Q1 2025, representing a 10% increase year-over-year [20] - Adjusted EBITDA for the quarter was $224 million, a 3% increase from the previous year [23] - Gross margins improved sequentially to 26.7% from 26.6% in the prior quarter, although down from 26.9% year-over-year [21][22] - Diluted earnings per share increased approximately 6% to $0.52 due to higher net income and a lower share count following share repurchases [23] Business Line Data and Key Metrics Changes - The company achieved mid-single-digit organic sales growth, with a 10% increase in meters and double-digit growth in treatment plant and fusible high-density polyethylene offerings [9][20] - Storm drainage products saw a 17% growth, driven by road and bridge projects and increased infrastructure funding [72][74] Market Data and Key Metrics Changes - The company noted steady growth in municipal construction activity, supported by funding from the Infrastructure Investment and Jobs Act [6] - Residential lot development showed resilience, although there are signs of softening due to economic conditions and affordability pressures [7][64] - Non-residential markets remained stable, with strong sales in data center construction and institutional buildings, while commercial buildings and manufacturing showed softer activity [8] Company Strategy and Development Direction - The company is focused on expanding its geographic footprint through both greenfield openings and acquisitions, with plans to open 5 to 10 new greenfields in 2025 [90] - The strategic plan emphasizes local service and performance-based culture to drive organic growth [13] - The company aims to achieve 2 to 4 points of above-market volume growth by expanding presence in underpenetrated geographies and driving product line expansion [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the U.S. housing market, despite short-term uncertainties [7] - The company reaffirmed its full-year guidance for net sales between $7.6 billion and $7.8 billion and adjusted EBITDA of $950 million to $1 billion [25] - Management highlighted the potential impact of tariffs, inflation, and interest rates on customer sentiment and demand in the latter half of the year [26] Other Important Information - The company deployed approximately $58 million in capital during the first quarter, focusing on organic investments, share repurchases, and debt service [11] - The acquisition pipeline remains healthy, with ongoing evaluations of various opportunities [12] Q&A Session Summary Question: Thoughts on SG&A productivity for the year - Management indicated expectations for improved SG&A rates in the second quarter, with ongoing M&A synergies expected to materialize over time [34][35] Question: Top-line guidance and market conservatism - Management expects the market to be roughly flat for the full year, with stronger performance in the first half and potential challenges in the second half due to economic uncertainties [40] Question: Pricing situation with commodities versus finished goods - Management noted that pricing has improved sequentially, with expectations for flat pricing for the year, despite some inflationary pressures [46][48] Question: Residential construction market outlook - Management acknowledged a slowdown in residential construction, with expectations for a slight headwind as the year progresses [64] Question: Growth in storm drainage products - Management attributed strong growth in storm drainage to increased infrastructure funding and a shift in product distribution dynamics [74] Question: Employee retention trends - Management reported high employee retention rates, viewing occasional poaching as an opportunity to attract talent [103][104] Question: Cost-out initiatives - Management confirmed ongoing cost-out initiatives but did not provide substantial quantification at this time [106][108]