SiteOne Landscape Supply, Inc 10-Q for FY2024 Q1

SiteOne Landscape Supply, Inc. (SITE)

10-Q 2024-05-01 For: 2024-03-31

Added on April 07, 2026

About this 10-Q

SiteOne Landscape Supply, Inc filed this 10-Q on May 1, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $904.8M; up 8.0% from $837.4M a year earlier
Net loss: $19.3M; compared with a net loss of $4.5M a year earlier
Diluted EPS: -$0.43; compared with -$0.10 a year earlier

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


Title of each class						Shares Outstanding as of April 26, 2024
Common Stock, $0.01 par value per share						45,212,090



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 Loss			6
Consolidated Statements of Equity			7
Consolidated Statements of Cash Flows			8
Notes to Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3. Quantitative and Qualitative Disclosures About Market Risk			43
Item 4. Controls and Procedures			43

Part II. OTHER INFORMATION
Item 1. Legal Proceedings			44
Item 1A. Risk Factors			44
Item 5. Other Information			44
Item 6. Exhibits			45
Signature			46


Assets	March 31, 2024		December 31, 2023
Current assets:
Cash and cash equivalents	$	41.5	$	82.5
Accounts receivable, net of allowance for doubtful accounts of $26.9 and $27.3, respectively	528.5		490.6
Inventory, net	933.6		771.2
Income tax receivable	2.8		—
Prepaid expenses and other current assets	73.6		61.0
Total current assets	1,580.0		1,405.3

Property and equipment, net (Note 5)	252.1		249.4
Operating lease right-of-use assets, net (Note 7)	380.5		388.9
Goodwill (Note 6)	485.2		485.5
Intangible assets, net (Note 6)	266.9		280.8
Deferred tax assets	5.3		5.3
Other assets	11.4		13.7
Total assets	$	2,981.4	$	2,828.9

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	390.9	$	270.8
Current portion of finance leases (Note 7)	23.7		21.8
Current portion of operating leases (Note 7)	83.4		83.6
Accrued compensation	52.5		74.2
Long-term debt, current portion (Note 9)	5.3		5.3
Income tax payable	—		8.0
Accrued liabilities	114.2		114.6
Total current liabilities	670.0		578.3

Other long-term liabilities	10.3		11.5
Finance leases, less current portion (Note 7)	77.8		69.8
Operating leases, less current portion (Note 7)	304.7		313.3
Deferred tax liabilities	2.1		2.3
Long-term debt, less current portion (Note 9)	442.7		367.6
Total liabilities	1,507.6		1,342.8

Commitments and contingencies (Note 11)

Stockholders' equity:
Common stock, par value $0.01; 1,000,000,000 shares authorized; 45,520,704 and 45,404,091 shares issued, and 45,198,683 and 45,082,070 shares outstanding at March 31, 2024 and December 31, 2023, respectively	0.5		0.5
Additional paid-in capital	610.7		601.8
Retained earnings	897.0		916.3
Accumulated other comprehensive income	2.3		4.2
Treasury stock, at cost, 322,021 and 322,021 shares at March 31, 2024 and December 31, 2023, respectively	(36.7)		(36.7)
Total stockholders' equity	1,473.8		1,486.1
Total liabilities and stockholders' equity	$	2,981.4	$	2,828.9


	Three Months Ended
	March 31, 2024		April 2, 2023
Net sales	$	904.8	$	837.4
Cost of goods sold	603.6		550.3
Gross profit	301.2		287.1

Selling, general and administrative expenses	327.7		291.4
Other income	4.2		4.0
Operating loss	(22.3)		(0.3)

Interest and other non-operating expenses, net	6.7		6.9
Loss before taxes	(29.0)		(7.2)
Income tax benefit	(9.7)		(2.7)
Net loss	$	(19.3)	$	(4.5)








Net loss per common share:
Basic	$	(0.43)	$	(0.10)
Diluted	$	(0.43)	$	(0.10)
Weighted average number of common shares outstanding:
Basic	45,263,984		45,045,851
Diluted	45,263,984		45,045,851


☒			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 Income (Loss)		Treasury Stock		Total Equity
Balance at December 31, 2023	45,082.1	$	0.5	$	601.8	$	916.3	$	4.2	$	(36.7)	$	1,486.1
Net loss	—	—		—		(19.3)		—		—		(19.3)
Other comprehensive loss	—	—		—		—		(1.9)		—		(1.9)
Issuance of common shares under stock-based compensation plan	116.6	—		(1.6)		—		—		—		(1.6)
Stock-based compensation	—	—		10.5		—		—		—		10.5

Balance at March 31, 2024	45,198.7	$	0.5	$	610.7	$	897.0	$	2.3	$	(36.7)	$	1,473.8


Note 1. Nature of Business and Significant Accounting Policies			10
Note 2. Revenue from Contracts with Customers			12
Note 3. Acquisitions			13
Note 4. Fair Value Measurement and Interest Rate Swaps			14
Note 5. Property and Equipment, Net			16
Note 6. Goodwill and Intangible Assets, Net			17
Note 7. Leases			18
Note 8. Employee Benefit and Stock Incentive Plans			19
Note 9. Long-Term Debt			22
Note 10. Income Taxes			25
Note 11. Commitments and Contingencies			25
Note 12. Earnings (Loss) Per Share			26
Note 13. Subsequent Events			26


	Derivative Assets
	March 31, 2024			December 31, 2023
Derivatives designated as hedging instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value

Interest rate contracts	Prepaid expenses and other current assets	$	8.7	Prepaid expenses and other current assets	$	8.4
	Other assets	—		Other assets	1.3
Total derivative assets		$	8.7		$	9.7


	March 31, 2024		December 31, 2023
Land	$	13.2	$	13.2
Buildings and leasehold improvements:
Buildings	8.4		8.4
Leasehold improvements	58.6		55.7
Branch equipment	118.5		121.5
Office furniture and fixtures and vehicles:
Office furniture and fixtures	30.5		30.4
Vehicles	75.4		77.5
Finance lease right-of-use assets	166.6		151.0
Mineral rights	2.2		2.2

Construction in progress	16.5		14.0
Total property and equipment, gross	489.9		473.9
Less: accumulated depreciation and amortization	237.8		224.5
Property and equipment, net	$	252.1	$	249.4


	January 1, 2024		January 2, 2023
	to March 31, 2024		to December 31, 2023
Beginning balance	$	485.5	$	411.9
Goodwill acquired during the period	—		75.4
Goodwill adjusted during the period	(0.3)		(1.8)
Ending balance	$	485.2	$	485.5


		March 31, 2024						December 31, 2023
	Weighted Average Remaining Useful Life	Amount		Accumulated Amortization		Net		Amount		Accumulated Amortization		Net
Customer relationships	16.7 years	$	553.1	$	308.8	$	244.3	$	551.8	$	295.7	$	256.1
Trademarks and other	3.2 years	49.3		26.7		22.6		49.5		24.8		24.7
Total intangibles		$	602.4	$	335.5	$	266.9	$	601.3	$	320.5	$	280.8


Fiscal year ending:
2024 (remainder)	$	41.7
2025	47.0
2026	38.5
2027	30.1
2028	22.9
Thereafter	86.7
Total future amortization	$	266.9


		Three Months Ended
Lease Cost	Classification	March 31, 2024		April 2, 2023
Finance lease cost:
Amortization of right-of-use assets	Selling, general and administrative expenses	$	6.2	$	4.2
Interest on lease liabilities	Interest and other non-operating expenses, net	1.4		0.8
Operating lease cost	Cost of goods sold	2.0		1.7
Operating lease cost	Selling, general and administrative expenses	24.3		20.4
Short-term lease cost	Selling, general and administrative expenses	0.9		0.8
Variable lease cost	Selling, general and administrative expenses	0.9		0.4
Sublease income	Selling, general and administrative expenses	(0.2)		(0.2)
Total lease cost		$	35.5	$	28.1


	Three Months Ended
	March 31, 2024		April 2, 2023
Cash Flows from Operating Activities:
Net loss	$	(19.3)	$	(4.5)
Adjustments to reconcile Net loss to net cash used in operating activities:
Amortization of finance lease right-of-use assets and depreciation	16.9		15.5
Stock-based compensation	10.5		8.6
Amortization of software and intangible assets	16.0		15.3
Amortization of debt related costs	0.3		0.3

Gain on sale of equipment	(1.0)		(0.4)

Other	(1.5)		(3.2)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Receivables	(38.1)		(39.3)
Inventory	(160.9)		(168.2)
Income tax receivable	(2.8)		(3.1)
Prepaid expenses and other assets	(8.9)		(14.8)
Accounts payable	121.0		81.8
Income tax payable	(8.0)		—
Accrued expenses and other liabilities	(23.5)		(40.6)
Net Cash Used In Operating Activities	$	(99.3)	$	(152.6)

Cash Flows from Investing Activities:
Purchases of property and equipment	(8.9)		(7.1)

Acquisitions, net of cash acquired	—		(33.2)
Proceeds from the sale of property and equipment	1.6		0.7
Net Cash Used In Investing Activities	$	(7.3)	$	(39.6)

Cash Flows from Financing Activities:
Equity proceeds from common stock	2.6		1.1
Repurchases of common stock	—		(0.6)

Repayments under term loan	(1.0)		(0.6)
Borrowings on asset-based credit facility	158.2		298.3
Repayments on asset-based credit facility	(82.1)		(85.3)

Payments on finance lease obligations	(5.8)		(3.9)


	Stock Options	RSUs	DSUs	PSUs
Outstanding as of December 31, 2023	837.0	239.5	54.7	62.5
Granted	—	114.2	—	51.9
Exercised/Vested/Settled(a)	(71.6)	(70.9)	—	—
Expired or forfeited	(0.6)	(3.4)	—	(0.3)
Outstanding as of March 31, 2024	764.8	279.4	54.7	114.1


	March 31, 2024		April 2, 2023
Stock options	$	—	$	72.24
RSUs	$	157.66	$	149.09
DSUs	$	—	$	—
PSUs	$	157.57	$	149.36


	March 31, 2024		December 31, 2023
ABL facility	$	83.6	$	7.5
Term loans	368.7		369.6
Hybrid debt instruments	1.5		1.9
Total gross long-term debt	453.8		379.0
Less: unamortized debt issuance costs and discounts on debt	(5.8)		(6.1)
Total debt	$	448.0	$	372.9
Less: current portion	(5.3)		(5.3)
Total long-term debt	$	442.7	$	367.6


	Three Months Ended
Other Information	March 31, 2024		April 2, 2023
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows from finance leases	$	1.4	$	0.8
Operating cash flows from operating leases	$	27.4	$	22.2
Financing cash flows from finance leases	$	5.8	$	3.9
Right-of-use assets obtained in exchange for new lease liabilities:
Finance leases	$	15.8	$	8.7
Operating leases	$	12.6	$	49.8


Maturity of Lease Liabilities	Operating Leases		Finance Leases
Fiscal year:
2024 (remainder)	$	69.4	$	22.1
2025	88.6		26.7
2026	72.5		23.6
2027	58.7		19.8
2028	46.3		16.0
2029	34.5		8.0
Thereafter	91.3		0.4
Total lease payments	461.3		116.6
Less: interest	73.2		15.1
Present value of lease liabilities	$	388.1	$	101.5


	March 31, 2024			December 31, 2023
	Unrecognized Compensation (in millions)		Weighted Average Remaining Period	Unrecognized Compensation (in millions)		Weighted Average Remaining Period
Stock options	$	4.0	2.1 years	$	4.9	2.3 years
RSUs	$	32.6	2.9 years	$	23.7	2.5 years
DSUs	$	0.1	0.9 years	$	0.2	0.9 years
PSUs	$	10.9	2.4 years	$	3.9	1.7 years


(In millions, except per share information and percentages)
	2024		2023												2022
	Qtr 1		Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4			Qtr 3			Qtr 2
Net sales	$	904.8	$	965.0		$	1,145.1		$	1,353.7		$	837.4		$	890.0		$	1,102.6		$	1,216.6
Cost of goods sold	603.6		638.4			757.0			864.3			550.3			587.4			714.0			755.5
Gross profit	301.2		326.6			388.1			489.4			287.1			302.6			388.6			461.1
Selling, general and administrative expenses	327.7		332.8			311.8			320.6			291.4			304.6			289.2			272.7
Other income, net	(4.2)		(4.3)			(4.9)			(2.5)			(4.0)			(2.0)			(2.4)			(1.7)
Operating income (loss)	(22.3)		(1.9)			81.2			171.3			(0.3)			—			101.8			190.1
Interest and other non-operating expenses, net	6.7		6.5			6.4			7.3			6.9			5.5			5.6			4.6
Income tax expense (benefit)	(9.7)		(5.0)			17.5			40.0			(2.7)			(4.6)			22.9			44.8
Net income (loss)	$	(19.3)	$	(3.4)		$	57.3		$	124.0		$	(4.5)		$	(0.9)		$	73.3		$	140.7
Net income (loss) per common share:
Basic	$	(0.43)	$	(0.08)		$	1.27		$	2.75		$	(0.10)		$	(0.02)		$	1.63		$	3.12
Diluted	$	(0.43)	$	(0.08)		$	1.25		$	2.71		$	(0.10)		$	(0.02)		$	1.60		$	3.07
Adjusted EBITDA(a)	$	21.1	$	39.9		$	119.8		$	211.2		$	39.8		$	38.9		$	135.6		$	222.0

Net sales as a percentage of annual Net sales			22.4		%	26.6		%	31.5		%	19.5		%	22.2		%	27.5		%	30.3		%
Gross profit as a percentage of annual Gross profit			21.9		%	26.0		%	32.8		%	19.3		%	21.3		%	27.3		%	32.4		%
Adjusted EBITDA as a percentage of annual Adjusted EBITDA			9.7		%	29.2		%	51.4		%	9.7		%	8.4		%	29.2		%	47.8		%


	Total		Next 12 Months		Beyond 12 Months
Long-term debt, including current maturities	$	453.8	$	5.3	$	448.5
Interest on long-term debt	$	123.3	$	25.5	$	97.8



	Three Months Ended
Net cash provided by (used in):	March 31, 2024		April 2, 2023
Operating activities	$	(99.3)	$	(152.6)
Investing activities	$	(7.3)	$	(39.6)
Financing activities	$	65.7	$	203.4


Exhibit Number						Description

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 March 31, 2024 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:	May 1, 2024	By:	/s/ John T. Guthrie
			John T. Guthrie
			Executive Vice President, Chief Financial Officer and Assistant Secretary (Principal Financial Officer and Principal Accounting Officer)


			/s/ Doug Black
			Doug Black
			Chairman and Chief Executive Officer