SiteOne Landscape Supply, Inc 10-Q for FY2021 Q2

SiteOne Landscape Supply, Inc. (SITE)

10-Q 2021-08-04 For: 2021-07-04

Added on April 07, 2026

About this 10-Q

SiteOne Landscape Supply, Inc filed this 10-Q on August 4, 2021, covering the quarter ended July 4, 2021 (FY2021 Q2).

Headline figures

Quarter ended July 4, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.08B; up 32.6% from $817.7M a year earlier
Net income: $123.5M; up 56.1% from net income of $79.1M a year earlier
Diluted EPS: $2.70; up 47.5% from $1.83 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware			46-4056061
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)


Title of each class						Shares Outstanding as of July 30, 2021
Common Stock, $0.01 par value per share						44,548,609



TABLE OF CONTENTS

Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets			4
Consolidated Statements of Operations			5
Consolidated Statements of Comprehensive Income			6
Consolidated Statements of Equity			7
Consolidated Statements of Cash Flows			8
Notes to Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3. Quantitative and Qualitative Disclosures About Market Risk			44
Item 4. Controls and Procedures			44

Part II. OTHER INFORMATION
Item 1. Legal Proceedings			45
Item 1A. Risk Factors			45
Item 6. Exhibits			46
Signature			47


Assets	July 4, 2021		January 3, 2021
Current assets:
Cash and cash equivalents	$	107.8	$	55.2
Accounts receivable, net of allowance for doubtful accounts of $10.4 and $9.1, respectively	415.4		292.8
Inventory, net	614.0		458.6
Income tax receivable	—		6.8
Prepaid expenses and other current assets	42.5		38.2
Total current assets	1,179.7		851.6

Property and equipment, net (Note 5)	135.1		130.0
Operating lease right-of-use assets, net (Note 7)	263.8		256.5
Goodwill (Note 6)	278.4		250.6
Intangible assets, net (Note 6)	210.1		196.3
Deferred tax assets	2.3		2.4
Other assets	8.5		8.3
Total assets	$	2,077.9	$	1,695.7

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	313.4	$	172.8
Current portion of finance leases (Note 7)	9.9		9.2
Current portion of operating leases (Note 7)	57.9		54.6
Accrued compensation	59.2		69.2
Long-term debt, current portion (Note 9)	4.7		2.8
Income tax payable	28.8		—
Accrued liabilities	82.0		60.0
Total current liabilities	555.9		368.6

Other long-term liabilities	15.9		25.3
Finance leases, less current portion (Note 7)	31.9		32.4
Operating leases, less current portion (Note 7)	212.9		208.3
Deferred tax liabilities	6.2		5.4
Long-term debt, less current portion (Note 9)	318.5		260.7
Total liabilities	1,141.3		900.7

Commitments and contingencies (Note 11)

Stockholders' equity:
Common stock, par value $0.01; 1,000,000,000 shares authorized; 44,537,853 and 44,300,380 shares issued, and 44,516,942 and 44,279,469 shares outstanding at July 4, 2021 and January 3, 2021, respectively	0.4		0.4
Additional paid-in capital	551.1		541.8
Retained earnings	390.0		259.1
Accumulated other comprehensive loss	(4.9)		(6.3)
Total stockholders' equity	936.6		795.0
Total liabilities and stockholders' equity	$	2,077.9	$	1,695.7


	Three Months Ended				Six Months Ended
	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Net sales	$	1,083.9	$	817.7	$	1,734.1	$	1,277.5
Cost of goods sold	695.7		531.6		1,144.4		848.6
Gross profit	388.2		286.1		589.7		428.9

Selling, general and administrative expenses	225.8		175.0		418.1		342.1
Other income	2.2		1.2		3.4		2.2
Operating income	164.6		112.3		175.0		89.0

Interest and other non-operating expenses, net	4.3		7.6		9.8		15.3
Net income before taxes	160.3		104.7		165.2		73.7
Income tax expense	36.8		25.6		34.3		12.1
Net income	$	123.5	$	79.1	$	130.9	$	61.6








Net income per common share:
Basic	$	2.77	$	1.89	$	2.95	$	1.47
Diluted	$	2.70	$	1.83	$	2.86	$	1.43
Weighted average number of common shares outstanding:
Basic	44,508,725		41,950,914		44,444,950		41,858,615
Diluted	45,789,261		43,114,035		45,720,629		43,081,617


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Common Stock Shares	Common Stock Amount		Additional Paid-in-Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
Balance at January 3, 2021	44,279.5	$	0.4	$	541.8	$	259.1	$	(6.3)	$	795.0
Net income	—	—		—		7.4		—		7.4
Other comprehensive income	—	—		—		—		1.1		1.1
Issuance of common shares under stock-based compensation plan	114.2	—		(1.1)		—		—		(1.1)
Stock-based compensation	—	—		3.1		—		—		3.1
Balance at April 4, 2021	44,393.7	$	0.4	$	543.8	$	266.5	$	(5.2)	$	805.5
Net income	—	—		—		123.5		—		123.5
Other comprehensive income	—	—		—		—		0.3		0.3
Issuance of common shares under stock-based compensation plan	123.2	—		2.7		—		—		2.7
Stock-based compensation	—	—		4.6		—		—		4.6
Balance at July 4, 2021	44,516.9	$	0.4	$	551.1	$	390.0	$	(4.9)	$	936.6


Cash and cash equivalents:
Beginning	55.2		19.0
Ending	$	107.8	$	163.8

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for interest	$	9.1	$	14.3
Cash paid during the year for income taxes	$	1.0	$	0.8


Note 1. Nature of Business and Significant Accounting Policies			11
Note 2. Revenue from Contracts with Customers			14
Note 3. Acquisitions			15
Note 4. Fair Value Measurement and Interest Rate Swaps			17
Note 5. Property and Equipment, Net			20
Note 6. Goodwill and Intangible Assets, Net			21
Note 7. Leases			21
Note 8. Employee Benefit and Stock Incentive Plans			23
Note 9. Long-Term Debt			25
Note 10. Income Taxes			27
Note 11. Commitments and Contingencies			27
Note 12. Earnings (Loss) Per Share			28


	Derivative Assets
	July 4, 2021			January 3, 2021
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments

Interest rate contracts	Other assets	$	0.5	Other assets	$	—
Total derivative assets		$	0.5		$	—


	Derivative Liabilities
	July 4, 2021			January 3, 2021
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Interest rate contracts	Accrued liabilities	$	1.4	Accrued liabilities	$	2.2
	Other long-term liabilities	1.1		Other long-term liabilities	2.6

Derivatives not designated as hedging instruments
Interest rate contracts	Accrued liabilities	$	—	Accrued liabilities	$	1.7
	Other long-term liabilities	—		Other long-term liabilities	2.6
Total derivative liabilities		$	2.5		$	9.1


		Three Months Ended
		Gain (Loss) Reclassified from AOCI into Income				Gain (Loss) Recognized in Income
Derivatives not designated as hedging instruments	Location of Gain (Loss)	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Interest rate contracts	Interest and other non-operating expenses, net	$	(0.3)	$	—	$	(0.5)	$	—


	July 4, 2021		January 3, 2021
Land	$	12.2	$	12.2
Buildings and leasehold improvements:
Buildings	7.8		7.8
Leasehold improvements	33.5		31.0
Branch equipment	66.5		58.6
Office furniture and fixtures and vehicles:
Office furniture and fixtures	23.1		22.4
Vehicles	32.9		32.0
Finance lease right-of-use assets	68.6		64.5
Tooling	0.1		0.1
Construction in progress	7.8		5.3
Total property and equipment, gross	252.5		233.9
Less: accumulated depreciation and amortization	117.4		103.9
Total property and equipment, net	$	135.1	$	130.0


	January 3, 2021
	to July 4, 2021
Beginning balance	$	250.6
Goodwill acquired during the period	26.1
Goodwill adjusted during the period	1.7
Ending balance	$	278.4


	Six Months Ended
	July 4, 2021		June 28, 2020
Cash Flows from Operating Activities:
Net income	$	130.9	$	61.6
Adjustments to reconcile Net income to net cash provided by operating activities:
Amortization of finance lease right-of-use assets and depreciation	16.9		14.2
Stock-based compensation	7.7		5.3
Amortization of software and intangible assets	22.8		18.5
Amortization of debt related costs	0.7		1.0
Loss on extinguishment of debt	0.8		—
(Gain) loss on sale of equipment	(0.1)		0.2

Other	(1.0)		1.2
Changes in operating assets and liabilities, net of the effects of acquisitions:
Receivables	(117.3)		(47.8)
Inventory	(145.6)		(33.0)
Income tax receivable	6.8		7.0
Prepaid expenses and other assets	(4.1)		(1.8)
Accounts payable	134.8		73.7
Income tax payable	28.8		2.4
Accrued expenses and other liabilities	10.1		16.6
Net Cash Provided By Operating Activities	$	92.2	$	119.1

Cash Flows from Investing Activities:
Purchases of property and equipment	(16.6)		(9.5)
Purchases of intangible assets	(3.7)		(1.2)
Acquisitions, net of cash acquired	(63.0)		(45.3)
Proceeds from the sale of property and equipment	1.3		0.5
Net Cash Used In Investing Activities	$	(82.0)	$	(55.5)

Cash Flows from Financing Activities:
Equity proceeds from common stock	4.7		7.7

Borrowings under term loan	325.0		—
Repayments under term loan	(269.8)		(2.2)
Borrowings on asset-based credit facility	161.9		285.4
Repayments on asset-based credit facility	(161.9)		(199.2)
Payments of debt issuance costs	(2.4)		—
Payments on finance lease obligations	(5.0)		(3.9)


		July 4, 2021						January 3, 2021
	Weighted Average Remaining Useful Life	Amount		Accumulated Amortization		Net		Amount		Accumulated Amortization		Net
Customer relationships	17.2 years	$	372.7	$	176.7	$	196.0	$	340.5	$	156.9	$	183.6
Trademarks and other	3.7 years	29.4		15.3		14.1		25.8		13.1		12.7
Total intangibles		$	402.1	$	192.0	$	210.1	$	366.3	$	170.0	$	196.3


Fiscal year ending:
2021 (remainder)	$	22.6
2022	38.8
2023	31.4
2024	25.1
2025	19.9
Thereafter	72.3
Total future amortization	$	210.1


Maturity of Lease Liabilities	Operating Leases		Finance Leases
Fiscal year:
2021 (remainder)	$	30.3	$	5.8
2022	65.0		10.7
2023	53.6		10.1
2024	43.7		8.9
2025	33.6		6.0
2026	22.4		3.1
Thereafter	79.5		0.3
Total lease payments	328.1		44.9
Less: interest	57.3		3.1
Present value of lease liabilities	$	270.8	$	41.8


		Three Months Ended				Six Months Ended
Lease Cost	Classification	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Finance lease cost
Amortization of right-of-use assets	Selling, general and administrative expenses	$	2.6	$	2.2	$	5.2	$	4.2
Interest on lease liabilities	Interest and other non-operating expenses, net	0.3		0.3		0.7		0.6
Operating lease cost	Cost of goods sold	0.9		0.8		1.6		1.6
Operating lease cost	Selling, general and administrative expenses	18.0		16.4		34.7		32.4
Short-term lease cost	Selling, general and administrative expenses	0.3		0.4		0.8		0.8
Variable lease cost	Selling, general and administrative expenses	0.3		0.1		0.5		0.3
Sublease income	Selling, general and administrative expenses	(0.3)		(0.3)		(0.6)		(0.6)
Total lease cost		$	22.1	$	19.9	$	42.9	$	39.3


	Three Months Ended				Six Months Ended
Other Information	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Cash paid for amounts included in the measurements of lease liabilities
Operating cash flows from finance leases	$	0.3	$	0.3	$	0.7	$	0.6
Operating cash flows from operating leases	$	18.6	$	16.2	$	35.5	$	32.7
Financing cash flows from finance leases	$	2.6	$	2.1	$	5.0	$	3.9
Right-of-use assets obtained in exchange for new lease liabilities
Finance leases	$	3.0	$	4.9	$	5.0	$	11.5
Operating leases	$	21.1	$	9.8	$	33.6	$	31.3


Lease Term and Discount Rate	July 4, 2021
Weighted-average remaining lease term
Finance leases	4.4 years
Operating leases	6.7 years
Weighted-average discount rate
Finance leases	3.5	%
Operating leases	5.2	%


	Stock Options	RSUs	DSUs	PSUs
Outstanding as of January 3, 2021	1,595.3	174.1	41.0	44.2
Granted	73.1	68.5	4.3	19.9
Exercised/Vested/Settled	(199.9)	(58.6)	—	—
Expired or forfeited	(6.7)	(5.1)	—	(0.2)
Outstanding as of July 4, 2021	1,461.8	178.9	45.3	63.9


	Weighted Average Grant Date Fair Value
Stock options	$	48.07
RSUs	$	166.27
DSUs	$	172.10
PSUs	$	166.15


	Unrecognized Compensation (in millions)		Weighted Average Remaining Period
Stock options	$	7.9	2.6 years
RSUs	$	17.4	3.0 years
DSUs	$	0.3	1.2 years
PSUs	$	4.2	2.1 years


	July 4, 2021		January 3, 2021
ABL facility	$	—	$	—
Term loans	324.2		269.0
Hybrid debt instruments	5.5		—
Total gross long-term debt	329.7		269.0
Less: unamortized debt issuance costs and discounts on debt	(6.5)		(5.5)
Total debt	$	323.2	$	263.5
Less: current portion	(4.7)		(2.8)
Total long-term debt	$	318.5	$	260.7



Consolidated Statements of Operations
(In millions)
	Three Months Ended								Six Months Ended
	July 4, 2021				June 28, 2020				July 4, 2021				June 28, 2020
Net sales	$	1,083.9	100.0	%	$	817.7	100.0	%	$	1,734.1	100.0	%	$	1,277.5	100.0	%
Cost of goods sold	695.7		64.2	%	531.6		65.0	%	1,144.4		66.0	%	848.6		66.4	%
Gross profit	388.2		35.8	%	286.1		35.0	%	589.7		34.0	%	428.9		33.6	%
Selling, general and administrative expenses	225.8		20.8	%	175.0		21.4	%	418.1		24.1	%	342.1		26.8	%
Other income	2.2		0.2	%	1.2		0.1	%	3.4		0.2	%	2.2		0.2	%
Operating income	164.6		15.2	%	112.3		13.7	%	175.0		10.1	%	89.0		7.0	%
Interest and other non-operating expenses, net	4.3		0.4	%	7.6		0.9	%	9.8		0.6	%	15.3		1.2	%
Income tax expense	36.8		3.4	%	25.6		3.1	%	34.3		2.0	%	12.1		0.9	%
Net income	$	123.5	11.4	%	$	79.1	9.7	%	$	130.9	7.5	%	$	61.6	4.8	%


(In millions, except per share information and percentages)
	2021				2020												2019
	Qtr 2		Qtr 1		Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4			Qtr 3
Net sales	$	1,083.9	$	650.2	$	675.1		$	751.9		$	817.7		$	459.8		$	535.0		$	652.8
Cost of goods sold	695.7		448.7		452.8			501.8			531.6			317.0			365.0			437.6
Gross profit	388.2		201.5		222.3			250.1			286.1			142.8			170.0			215.2
Selling, general and administrative expenses	225.8		192.3		202.8			183.3			175.0			167.1			166.8			165.0
Other income	2.2		1.2		2.7			1.8			1.2			1.0			1.2			2.3
Operating income (loss)	164.6		10.4		22.2			68.6			112.3			(23.3)			4.4			52.5
Interest and other non-operating expenses	4.3		5.5		9.1			6.6			7.6			7.7			7.5			8.2
Income tax (benefit) expense	36.8		(2.5)		1.6			13.8			25.6			(13.5)			(5.6)			9.7
Net income (loss)	$	123.5	$	7.4	$	11.5		$	48.2		$	79.1		$	(17.5)		$	2.5		$	34.6
Net income (loss) per common share:
Basic	$	2.77	$	0.17	$	0.26		$	1.11		$	1.89		$	(0.42)		$	0.06		$	0.84
Diluted	$	2.70	$	0.16	$	0.25		$	1.08		$	1.83		$	(0.42)		$	0.06		$	0.81
Adjusted EBITDA(a)	$	190.6	$	34.5	$	43.9		$	87.8		$	132.1		$	(3.6)		$	22.2		$	70.5
Net sales as a percentage of annual Net sales					25.0		%	27.8		%	30.2		%	17.0		%	22.7		%	27.7		%
Gross profit as a percentage of annual Gross profit					24.7		%	27.8		%	31.7		%	15.8		%	22.0		%	27.8		%
Adjusted EBITDA as a percentage of annual Adjusted EBITDA					16.9		%	33.7		%	50.8		%	(1.4)		%	11.0		%	35.1		%


(In millions)
	Payments Due by Period
			Less than						More than
	Total		1 Year		1-3 Years		3-5 Years		5 Years
Long-term debt, including current maturities(a)	$	329.7	$	4.7	$	9.4	$	6.8	$	308.8
Interest on long-term debt(b)	$	62.3	$	11.0	$	21.2	$	16.6	$	13.5


Exhibit Number						Description

10.1 †						Summary of Non-Employee Director Compensation, as amended and restated on May 12, 2021.

31.1						Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101						The following unaudited financial information from this Quarterly Report on Form 10-Q for the quarter ended July 4, 2021 is formatted in Inline XBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.

104						Cover Page Interactive Data File (formatted in Inline XBRL with applicable taxonomy extension information contained in Exhibit 101).


		SITEONE LANDSCAPE SUPPLY, INC.


Date:	August 4, 2021	By:	/s/ John T. Guthrie
			John T. Guthrie
			Executive Vice President, Chief Financial Officer and Assistant Secretary
			(Principal Financial and Principal Accounting Officer)