SiteOne Landscape Supply Announces First Quarter 2022 Earnings
SiteOne Landscape Supply (NYSE: SITE) reported a strong first quarter for 2022, with net sales rising 24% to $805.3 million and adjusted EBITDA up 97% to $67.8 million. The gross profit increased 34% to $269.2 million, improving gross margin by 240 basis points to 33.4%. Despite the challenges of product inflation and supply chain issues, the company’s net income surged to $32.3 million from $7.4 million a year earlier, driven by solid demand and successful acquisitions, including JK Enterprise Landscape Supply. The outlook remains cautiously optimistic for 2022.
- Net sales increased by 24% to $805.3 million.
- Adjusted EBITDA rose 97% to $67.8 million.
- Gross profit improved by 34% to $269.2 million.
- Gross margin increased by 240 basis points to 33.4%.
- Net income surged to $32.3 million from $7.4 million.
- The company closed acquisitions contributing to sales growth.
- Product inflation and supply chain challenges may impact future performance.
- The spring season started slower due to cold and wet weather.
First Quarter 2022 Highlights (Compared to First Quarter 2021):
-
Net sales increased by
24% to$805.3 million -
Organic Daily Sales increased by
17% -
Gross profit increased
34% to$269.2 million 33.4% -
SG&A as a percentage of Net sales decreased by 100 basis points to
28.6% -
Net income increased to
$32.3 million $7.4 million -
Adjusted EBITDA increased by
97% to$67.8 million -
Adjusted EBITDA margin increased 310 basis points to
8.4% -
Acquired JK Enterprise Landscape Supply
Post-Quarter Highlights
- Closed two acquisitions: BellStone Masonry Supply and Preferred Seed
“Following our record performance in 2021 and in particular our tremendous growth in the first quarter last year, I am very pleased to report another strong start in 2022 as we continue to build off our gains and achieve excellent growth in sales and Adjusted EBITDA. Our exceptional teams are leveraging our improved capabilities and executing at a high level for customers and suppliers, thereby driving robust top and bottom-line growth,” said
First Quarter 2022 Results
Net sales for the First Quarter 2022 increased to
Gross profit increased to
Selling, general and administrative expenses (“SG&A”) for the First Quarter 2022 increased to
Net income for the First Quarter 2022 increased to
Adjusted EBITDA increased
Net debt, calculated as long-term debt (net of issuance costs and discounts) plus finance leases, net of cash and cash equivalents on our balance sheet as of
Outlook
“The underlying market trends remain positive across end markets and product segments, and our customer backlogs are strong headed into the spring season,”
For Fiscal 2022, we continue to expect Adjusted EBITDA to be in the range of
Reconciliation for the forward-looking full-year 2022 Adjusted EBITDA outlook is not being provided, as the Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation.
Conference Call Information
SiteOne management will host a conference call today,
Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at http://investors.siteone.com. The online replay will be available for 30 days on the same website immediately following the call. A slide presentation highlighting the Company’s results and key performance indicators will also be available on the Investor Relations section of the Company’s website.
To learn more about SiteOne, please visit the company's website at http://investors.siteone.com.
About
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our 2022 Adjusted EBITDA outlook. Some of the forward-looking statements can be identified by the use of terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “project,” “potential,” or the negative of these terms, and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. Factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following: cyclicality in residential and commercial construction markets; economic downturn or recession; general economic and financial conditions; demand for our products; seasonality of our business; climate change-related events, weather conditions, seasonality, and availability of water to end-users; inflation and increased operating costs; the potential negative impact of the ongoing COVID-19 pandemic (which, among other things, may exacerbate each of the forward-looking statements discussed here); public perceptions that our products and services are not environmentally friendly or that our practices are not sustainable; competitive industry pressures, including competition for our talent base; supply chain disruptions, product or labor shortages, and the loss of key suppliers; cybersecurity incidents involving our systems or third party systems, including the
Non-GAAP Financial Information
This release includes certain financial information, not prepared in accordance with
We present Adjusted EBITDA in order to evaluate the operating performance and efficiency of our business. Adjusted EBITDA represents EBITDA as further adjusted for items permitted under the covenants of our credit facilities. EBITDA represents our Net income (loss) plus the sum of income tax (benefit) expense, interest expense, net of interest income, and depreciation and amortization. Adjusted EBITDA is further adjusted for stock-based compensation expense, (gain) loss on sale of assets, and other non-cash items, financing fees, other fees, and expenses related to acquisitions and other non-recurring (income) loss. Adjusted EBITDA does not include pre-acquisition acquired Adjusted EBITDA. Adjusted EBITDA is not a measure of our liquidity or financial performance under GAAP and should not be considered as an alternative to Net income, operating income or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. The use of Adjusted EBITDA instead of Net income has limitations as an analytical tool. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies, limiting its usefulness as a comparative measure. Net debt is defined as long-term debt (net of issuance costs and discounts) plus finance leases, net of cash and cash-equivalents on our balance sheet. Leverage Ratio is defined as Net debt to trailing twelve months Adjusted EBITDA. Free Cash Flow is defined as Cash Flow from Operating Activities, less capital expenditures. We define Organic Daily Sales as Organic Sales divided by the number of Selling Days in the relevant reporting period. We define Organic Sales as Net sales, including Net sales from newly-opened greenfield branches, but excluding Net sales from acquired branches until they have been under our ownership for at least four full fiscal quarters at the start of the fiscal year. Selling Days are the number of business days, excluding Saturdays, Sundays and holidays, that SiteOne branches are open during the relevant reporting period.
Consolidated Balance Sheets (In millions, except share and per share data) |
|||||||
Assets |
|
|
|
|
|||
Current assets: |
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
45.1 |
|
$ |
53.7 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
|
437.1 |
|
|
393.8 |
|
Inventory, net |
|
|
853.7 |
|
|
636.6 |
|
Income tax receivable |
|
|
— |
|
|
3.3 |
|
Prepaid expenses and other current assets |
|
|
50.0 |
|
|
41.4 |
|
Total current assets |
|
|
1,385.9 |
|
|
1,128.8 |
|
|
|
|
|
|
|||
Property and equipment, net |
|
|
152.0 |
|
|
151.5 |
|
Operating lease right-of-use assets, net |
|
|
307.1 |
|
|
298.5 |
|
|
|
|
325.9 |
|
|
311.1 |
|
Intangible assets, net |
|
|
219.0 |
|
|
213.9 |
|
Deferred tax assets |
|
|
2.7 |
|
|
3.2 |
|
Other assets |
|
|
14.8 |
|
|
9.1 |
|
Total assets |
|
$ |
2,407.4 |
|
$ |
2,116.1 |
|
|
|
|
|
|
|||
Liabilities and Stockholders' Equity |
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|||
Accounts payable |
|
$ |
390.3 |
|
$ |
254.5 |
|
Current portion of finance leases |
|
|
11.3 |
|
|
11.0 |
|
Current portion of operating leases |
|
|
64.5 |
|
|
62.1 |
|
Accrued compensation |
|
|
51.2 |
|
|
99.3 |
|
Long-term debt, current portion |
|
|
4.0 |
|
|
4.0 |
|
Income tax payable |
|
|
1.6 |
|
|
— |
|
Accrued liabilities |
|
|
74.6 |
|
|
82.0 |
|
Total current liabilities |
|
|
597.5 |
|
|
512.9 |
|
|
|
|
|
|
|||
Other long-term liabilities |
|
|
6.2 |
|
|
10.6 |
|
Finance leases, less current portion |
|
|
33.2 |
|
|
34.4 |
|
Operating leases, less current portion |
|
|
250.8 |
|
|
244.2 |
|
Deferred tax liabilities |
|
|
7.3 |
|
|
5.1 |
|
Long-term debt, less current portion |
|
|
413.2 |
|
|
251.2 |
|
Total liabilities |
|
|
1,308.2 |
|
|
1,058.4 |
|
|
|
|
|
|
|||
Commitments and contingencies |
|
|
|
|
|||
|
|
|
|
|
|||
Stockholders' equity: |
|
|
|
|
|||
Common stock, par value |
|
|
0.4 |
|
|
0.4 |
|
Additional paid-in capital |
|
|
563.0 |
|
|
562.0 |
|
Retained earnings |
|
|
529.8 |
|
|
497.5 |
|
Accumulated other comprehensive income (loss) |
|
|
6.0 |
|
|
(2.2 |
) |
Total stockholders' equity |
|
|
1,099.2 |
|
|
1,057.7 |
|
Total liabilities and stockholders' equity |
|
$ |
2,407.4 |
|
$ |
2,116.1 |
|
Consolidated Statements of Operations (In millions, except share and per share data) |
|||||||
|
|
Three Months Ended |
|||||
|
|
|
|
|
|||
Net sales |
|
$ |
805.3 |
|
$ |
650.2 |
|
Cost of goods sold |
|
|
536.1 |
|
|
448.7 |
|
Gross profit |
|
|
269.2 |
|
|
201.5 |
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
|
|
230.5 |
|
|
192.3 |
|
Other income |
|
|
2.5 |
|
|
1.2 |
|
Operating income |
|
|
41.2 |
|
|
10.4 |
|
|
|
|
|
|
|||
Interest and other non-operating expenses, net |
|
|
4.3 |
|
|
5.5 |
|
Income before taxes |
|
|
36.9 |
|
|
4.9 |
|
Income tax (benefit) expense |
|
|
4.6 |
|
|
(2.5 |
) |
Net income |
|
$ |
32.3 |
|
$ |
7.4 |
|
|
|
|
|
|
|||
Net income per common share: |
|
|
|
|
|||
Basic |
|
$ |
0.72 |
|
$ |
0.17 |
|
Diluted |
|
$ |
0.70 |
|
$ |
0.16 |
|
Weighted average number of common shares outstanding: |
|
|
|
|
|||
Basic |
|
|
44,935,765 |
|
|
44,381,174 |
|
Diluted |
|
|
45,850,602 |
|
|
45,655,171 |
|
Consolidated Statements of Cash Flows (In millions) |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Cash Flows from Operating Activities: |
|
|
|
|
||||
Net income |
|
$ |
32.3 |
|
|
$ |
7.4 |
|
Adjustments to reconcile Net income to net cash used in operating activities: |
|
|
|
|
||||
Amortization of finance lease right-of-use assets and depreciation |
|
|
10.0 |
|
|
|
8.5 |
|
Stock-based compensation |
|
|
3.7 |
|
|
|
3.1 |
|
Amortization of software and intangible assets |
|
|
11.7 |
|
|
|
10.9 |
|
Amortization of debt related costs |
|
|
0.3 |
|
|
|
0.4 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
0.8 |
|
(Gain) loss on sale of equipment |
|
|
(0.1 |
) |
|
|
0.1 |
|
Other |
|
|
(0.5 |
) |
|
|
(0.6 |
) |
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|
|
|
|
||||
Receivables |
|
|
(39.9 |
) |
|
|
(45.8 |
) |
Inventory |
|
|
(216.1 |
) |
|
|
(157.6 |
) |
Income tax receivable |
|
|
3.3 |
|
|
|
(1.0 |
) |
Prepaid expenses and other assets |
|
|
(6.3 |
) |
|
|
2.0 |
|
Accounts payable |
|
|
134.3 |
|
|
|
145.6 |
|
Income tax payable |
|
|
1.6 |
|
|
|
— |
|
Accrued expenses and other liabilities |
|
|
(52.6 |
) |
|
|
(19.3 |
) |
|
|
$ |
(118.3 |
) |
|
$ |
(45.5 |
) |
|
|
|
|
|
||||
Cash Flows from Investing Activities: |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(7.5 |
) |
|
|
(7.2 |
) |
Purchases of intangible assets |
|
|
(2.5 |
) |
|
|
(2.4 |
) |
Acquisitions, net of cash acquired |
|
|
(31.5 |
) |
|
|
(37.7 |
) |
Proceeds from the sale of property and equipment |
|
|
0.5 |
|
|
|
1.0 |
|
|
|
$ |
(41.0 |
) |
|
$ |
(46.3 |
) |
|
|
|
|
|
||||
Cash Flows from Financing Activities: |
|
|
|
|
||||
Equity proceeds from common stock |
|
|
1.2 |
|
|
|
2.4 |
|
Borrowings under term loan |
|
|
— |
|
|
|
325.0 |
|
Repayments under term loan |
|
|
(0.6 |
) |
|
|
(269.0 |
) |
Borrowings on asset-based credit facility |
|
|
223.5 |
|
|
|
105.4 |
|
Repayments on asset-based credit facility |
|
|
(60.8 |
) |
|
|
(83.5 |
) |
Payments of debt issuance costs |
|
|
— |
|
|
|
(2.4 |
) |
Payments on finance lease obligations |
|
|
(2.9 |
) |
|
|
(2.4 |
) |
Payments of acquisition related contingent obligations |
|
|
(5.6 |
) |
|
|
(3.3 |
) |
Other financing activities |
|
|
(4.2 |
) |
|
|
(3.3 |
) |
Net Cash Provided By Financing Activities |
|
$ |
150.6 |
|
|
$ |
68.9 |
|
|
|
|
|
|
||||
Effect of exchange rate on cash |
|
|
0.1 |
|
|
|
0.2 |
|
Net change In cash |
|
|
(8.6 |
) |
|
|
(22.7 |
) |
|
|
|
|
|
||||
Cash and cash equivalents: |
|
|
|
|
||||
Beginning |
|
|
53.7 |
|
|
|
55.2 |
|
Ending |
|
$ |
45.1 |
|
|
$ |
32.5 |
|
|
|
|
|
|
||||
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
||||
Cash paid during the year for interest |
|
$ |
3.2 |
|
|
$ |
5.2 |
|
Cash paid during the year for income taxes |
|
$ |
2.4 |
|
|
$ |
0.1 |
|
Adjusted EBITDA Reconciliation (In millions, unaudited) |
|||||||||||||||||||||||||||||||
The following table presents a reconciliation of Adjusted EBITDA to Net income: |
|||||||||||||||||||||||||||||||
|
|
2022 |
|
2021 |
|
2020 |
|||||||||||||||||||||||||
|
|
Qtr 1 |
|
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|||||||||||||||
Reported Net income |
$ |
32.3 |
|
|
$ |
27.5 |
|
$ |
80.0 |
|
|
$ |
123.5 |
|
|
$ |
7.4 |
|
|
$ |
11.5 |
|
|
$ |
48.2 |
|
|
$ |
79.1 |
||
|
Income tax (benefit) expense |
|
4.6 |
|
|
|
2.7 |
|
|
19.1 |
|
|
|
36.8 |
|
|
|
(2.5 |
) |
|
|
1.6 |
|
|
|
13.8 |
|
|
|
25.6 |
|
|
Interest expense, net |
|
4.3 |
|
|
|
5.1 |
|
|
4.3 |
|
|
|
4.3 |
|
|
|
5.5 |
|
|
|
9.1 |
|
|
|
6.6 |
|
|
|
7.6 |
|
|
Depreciation and amortization |
|
21.7 |
|
|
|
22.3 |
|
|
21.0 |
|
|
|
20.3 |
|
|
|
19.4 |
|
|
|
18.2 |
|
|
|
16.3 |
|
|
|
16.4 |
|
EBITDA |
|
62.9 |
|
|
|
57.6 |
|
|
124.4 |
|
|
|
184.9 |
|
|
|
29.8 |
|
|
|
40.4 |
|
|
|
84.9 |
|
|
|
128.7 |
||
|
Stock-based compensation(a) |
|
3.7 |
|
|
|
3.1 |
|
|
3.5 |
|
|
|
4.6 |
|
|
|
3.1 |
|
|
|
2.7 |
|
|
|
2.6 |
|
|
|
2.8 |
|
|
(Gain) loss on sale of assets(b) |
|
(0.1 |
) |
|
|
0.2 |
|
|
(0.2 |
) |
|
|
(0.2 |
) |
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
0.1 |
|
|
Financing fees(c) |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
0.7 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Acquisitions and other adjustments(d) |
|
1.3 |
|
|
|
0.9 |
|
|
0.5 |
|
|
|
1.3 |
|
|
|
0.8 |
|
|
|
1.0 |
|
|
|
0.7 |
|
|
|
0.5 |
|
Adjusted EBITDA(e) |
$ |
67.8 |
|
|
$ |
61.8 |
|
$ |
128.2 |
|
|
$ |
190.6 |
|
|
$ |
34.5 |
|
|
$ |
43.9 |
|
|
$ |
87.8 |
|
|
$ |
132.1 |
||
| _____________________________________ | ||
(a) |
|
Represents stock-based compensation expense recorded during the period. |
(b) |
|
Represents any gain or loss associated with the sale of assets and termination of finance leases not in the ordinary course of business. |
(c) |
|
Represents fees associated with our debt refinancing and debt amendments. |
(d) |
|
Represents professional fees, retention and severance payments, and performance bonuses related to historical acquisitions. Although we have incurred professional fees, retention and severance payments, and performance bonuses related to acquisitions in several historical periods and expect to incur such fees and payments for any future acquisitions, we cannot predict the timing or amount of any such fees or payments. |
(e) |
|
Adjusted EBITDA excludes any earnings or loss of acquisitions prior to their respective acquisition dates for all periods presented. |
Organic Daily Sales to Net sales Reconciliation (In millions, except Selling Days; unaudited) |
||||||||||
The following table presents a reconciliation of Organic Daily Sales to Net sales: |
||||||||||
|
|
2022 |
|
2021 |
||||||
|
|
|
Qtr 1 |
|
|
Qtr 1 |
||||
Reported Net sales |
|
$ |
805.3 |
|
|
$ |
650.2 |
|||
|
Organic Sales(a) |
|
|
760.1 |
|
|
|
648.4 |
||
|
Acquisition contribution(b) |
|
|
45.2 |
|
|
|
1.8 |
||
Selling Days |
|
|
65 |
|
|
|
65 |
|||
Organic Daily Sales |
|
$ |
11.7 |
|
|
$ |
10.0 |
|||
| _____________________________________ | ||
(a) |
|
Organic Sales equal Net sales less Net sales from branches acquired in 2021 and 2022. |
(b) |
|
Represents Net sales from acquired branches that have not been under our ownership for at least four full fiscal quarters at the start of the 2022 Fiscal Year. Includes Net sales from branches acquired in 2021 and 2022. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220503006276/en/
Investor Relations Contact:
Investor Relations
470-270-7011
investors@siteone.com
Source:
FAQ
What were SiteOne's first quarter 2022 earnings results?
How did acquisitions impact SiteOne's financial performance in Q1 2022?
What is SiteOne's outlook for the fiscal year 2022?
How did SiteOne's gross margin change in Q1 2022?
What challenges does SiteOne face in the current market?
