SiteOne Landscape Supply, Inc 10-Q for FY2024 Q2

SiteOne Landscape Supply, Inc. (SITE)

10-Q 2024-07-31 For: 2024-06-30

Added on April 07, 2026

About this 10-Q

SiteOne Landscape Supply, Inc filed this 10-Q on July 31, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.41B; up 4.4% from $1.35B a year earlier
Net income: $120.2M; down 3.1% from net income of $124M a year earlier
Diluted EPS: $2.63; down 3.0% from $2.71 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 July 26, 2024
Common Stock, $0.01 par value per share						45,121,230



TABLE OF CONTENTS

Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets			5
Consolidated Statements of Operations			6
Consolidated Statements of Comprehensive Income			7
Consolidated Statements of Equity and Redeemable Non-controlling Interest			8
Consolidated Statements of Cash Flows			9
Notes to Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			30
Item 3. Quantitative and Qualitative Disclosures About Market Risk			48
Item 4. Controls and Procedures			48

Part II. OTHER INFORMATION
Item 1. Legal Proceedings			49
Item 1A. Risk Factors			49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			49
Item 5. Other Information			49
Item 6. Exhibits			50
Signature			51


Assets	June 30, 2024		December 31, 2023
Current assets:
Cash and cash equivalents	$	71.9	$	82.5
Accounts receivable, net of allowance for doubtful accounts of $25.9 and $27.3, respectively	610.4		490.6
Inventory, net	935.1		771.2

Prepaid expenses and other current assets	72.2		61.0
Total current assets	1,689.6		1,405.3

Property and equipment, net (Note 5)	285.2		249.4
Operating lease right-of-use assets, net (Note 7)	406.6		388.9
Goodwill (Note 6)	509.6		485.5
Intangible assets, net (Note 6)	278.5		280.8
Deferred tax assets	5.4		5.3
Other assets	10.5		13.7
Total assets	$	3,185.4	$	2,828.9

Liabilities, Redeemable Non-controlling Interest, and Stockholders' Equity
Current liabilities:
Accounts payable	$	347.6	$	270.8
Current portion of finance leases (Note 7)	26.3		21.8
Current portion of operating leases (Note 7)	86.4		83.6
Accrued compensation	60.5		74.2
Long-term debt, current portion (Note 9)	4.9		5.3
Income tax payable	27.7		8.0
Accrued liabilities	129.6		114.6
Total current liabilities	683.0		578.3

Other long-term liabilities	13.1		11.5
Finance leases, less current portion (Note 7)	89.0		69.8
Operating leases, less current portion (Note 7)	327.4		313.3
Deferred tax liabilities	1.7		2.3
Long-term debt, less current portion (Note 9)	475.3		367.6
Total liabilities	1,589.5		1,342.8

Commitments and contingencies (Note 11)

Redeemable non-controlling interest	19.0		—

Stockholders' equity:
Common stock, par value $0.01; 1,000,000,000 shares authorized; 45,549,753 and 45,404,091 shares issued, and 45,119,721 and 45,082,070 shares outstanding at June 30, 2024 and December 31, 2023, respectively	0.5		0.5
Additional paid-in capital	615.4		601.8
Retained earnings	1,017.2		916.3
Accumulated other comprehensive income	0.3		4.2
Treasury stock, at cost, 430,032 and 322,021 shares at June 30, 2024 and December 31, 2023, respectively	(56.5)		(36.7)
Total stockholders' equity	1,576.9		1,486.1
Total liabilities, redeemable non-controlling interest, and stockholders' equity	$	3,185.4	$	2,828.9


	Three Months Ended				Six Months Ended
	June 30, 2024		July 2, 2023		June 30, 2024		July 2, 2023
Net sales	$	1,413.9	$	1,353.7	$	2,318.7	$	2,191.1
Cost of goods sold	903.6		864.3		1,507.2		1,414.6
Gross profit	510.3		489.4		811.5		776.5

Selling, general and administrative expenses	343.8		320.6		671.5		612.0
Other income	3.1		2.5		7.3		6.5
Operating income	169.6		171.3		147.3		171.0

Interest and other non-operating expenses, net	9.0		7.3		15.7		14.2
Income before taxes	160.6		164.0		131.6		156.8
Income tax expense	40.0		40.0		30.3		37.3
Net income	120.6		124.0		101.3		119.5

Less: Net income attributable to non-controlling interest	0.4		—		0.4		—





Net income attributable to common shares	$	120.2	$	124.0	$	100.9	$	119.5

Net income per common share:
Basic	$	2.66	$	2.75	$	2.23	$	2.65
Diluted	$	2.63	$	2.71	$	2.21	$	2.62
Weighted average number of common shares outstanding:
Basic	45,266,829		45,093,712		45,265,407		45,069,781
Diluted	45,647,328		45,682,976		45,687,660		45,661,533


☒			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		Redeemable Non-controlling Interest
Balance at December 31, 2023	45,082.1	$	0.5	$	601.8	$	916.3	$	4.2	$	(36.7)	$	1,486.1	$	—
Net loss attributable to common shares	—	—		—		(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	$	—
Net income attributable to common shares	—	—		—		120.2		—		—		120.2		—
Net income attributable to non-controlling interest	—	—		—		—		—		—		—		0.4
Other comprehensive loss	—	—		—		—		(2.0)		—		(2.0)		—
Acquisition of non-controlling interest	—	—		—		—		—		—		—		18.6
Issuance of common shares under stock-based compensation plan	49.9	—		0.9		—		—		—		0.9		—
Stock-based compensation	—	—		3.8		—		—		—		3.8		—
Repurchases of common stock	(128.9)	—		—		—		—		(19.8)		(19.8)		—
Balance at June 30, 2024	45,119.7	$	0.5	$	615.4	$	1,017.2	$	0.3	$	(56.5)	$	1,576.9	$	19.0


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			16
Note 5. Property and Equipment, Net			19
Note 6. Goodwill and Intangible Assets, Net			19
Note 7. Leases			21
Note 8. Employee Benefit and Stock Incentive Plans			22
Note 9. Long-Term Debt			25
Note 10. Income Taxes			28
Note 11. Commitments and Contingencies			28
Note 12. Earnings (Loss) Per Share			29
Note 13. Subsequent Events			29


Amount Authorized (in millions)		Total Number of Shares Purchased	Average Price Paid Per Share		Amount Remaining (in millions)
$	400.0	128,922	$	153.84	$	343.8


	Derivative Assets
	June 30, 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	$	6.8	Prepaid expenses and other current assets	$	8.4
	Other assets	—		Other assets	1.3
Total derivative assets		$	6.8		$	9.7


	June 30, 2024		December 31, 2023
Land	$	13.2	$	13.2
Buildings and leasehold improvements:
Buildings	8.4		8.4
Leasehold improvements	72.5		55.7
Branch equipment	128.3		121.5
Office furniture and fixtures and vehicles:
Office furniture and fixtures	34.4		30.4
Vehicles	75.2		77.5
Finance lease right-of-use assets	186.3		151.0
Mineral rights	2.2		2.2

Construction in progress	17.6		14.0
Total property and equipment, gross	538.1		473.9
Less: accumulated depreciation and amortization	252.9		224.5
Property and equipment, net	$	285.2	$	249.4


	January 1, 2024		January 2, 2023
	to June 30, 2024		to December 31, 2023
Beginning balance	$	485.5	$	411.9
Goodwill acquired during the period(a)	21.1		75.4
Goodwill adjusted during the period	3.0		(1.8)
Ending balance	$	509.6	$	485.5


		June 30, 2024						December 31, 2023
	Weighted Average Remaining Useful Life	Amount		Accumulated Amortization		Net		Amount		Accumulated Amortization		Net
Customer relationships	16.8 years	$	574.6	$	321.6	$	253.0	$	551.8	$	295.7	$	256.1
Trademarks and other	3.3 years	53.4		27.9		25.5		49.5		24.8		24.7
Total intangibles		$	628.0	$	349.5	$	278.5	$	601.3	$	320.5	$	280.8


Fiscal year ending:
2024 (remainder)	$	29.2
2025	50.8
2026	41.8
2027	33.0
2028	25.5
Thereafter	98.2
Total future amortization	$	278.5


Maturity of Lease Liabilities	Operating Leases		Finance Leases
Fiscal year:
2024 (remainder)	$	46.9	$	16.8
2025	97.9		31.0
2026	81.6		27.8
2027	67.4		23.9
2028	54.1		20.0
2029	48.2		12.2
Thereafter	96.0		1.6
Total lease payments	492.1		133.3
Less: interest	78.3		18.0
Present value of lease liabilities	$	413.8	$	115.3


	Stock Options	RSUs	DSUs	PSUs
Outstanding as of December 31, 2023	837.0	239.5	54.7	62.5
Granted(a)	—	118.8	3.4	53.8
Exercised/Vested/Settled(a)(b)	(105.4)	(77.3)	—	(18.8)
Expired or forfeited	(1.7)	(6.0)	—	(0.7)
Outstanding as of June 30, 2024	729.9	275.0	58.1	96.8


	June 30, 2024		July 2, 2023
Stock options	$	—	$	72.24
RSUs	$	157.47	$	148.31
DSUs	$	156.14	$	148.09
PSUs(a)	$	157.59	$	148.89


	June 30, 2024		December 31, 2023
ABL facility	$	110.6	$	7.5
Subsidiary ABL facility	6.2		—
Term loans	367.7		369.6
Hybrid debt instruments	1.1		1.9
Total gross long-term debt	485.6		379.0
Less: unamortized debt issuance costs and discounts on debt	(5.4)		(6.1)
Total debt	$	480.2	$	372.9
Less: current portion	(4.9)		(5.3)
Total long-term debt	$	475.3	$	367.6


		Three Months Ended				Six Months Ended
Lease Cost	Classification	June 30, 2024		July 2, 2023		June 30, 2024		July 2, 2023
Finance lease cost:
Amortization of right-of-use assets	Selling, general and administrative expenses	$	7.1	$	4.7	$	13.3	$	8.9
Interest on lease liabilities	Interest and other non-operating expenses, net	1.6		0.9		3.0		1.7
Operating lease cost	Cost of goods sold	2.1		2.4		4.1		4.1
Operating lease cost	Selling, general and administrative expenses	24.1		21.1		48.4		41.5
Short-term lease cost	Selling, general and administrative expenses	1.2		0.7		2.1		1.5
Variable lease cost	Selling, general and administrative expenses	0.7		0.2		1.6		0.6
Sublease income	Selling, general and administrative expenses	(0.3)		(0.2)		(0.5)		(0.4)
Total lease cost		$	36.5	$	29.8	$	72.0	$	57.9


	Three Months Ended				Six Months Ended
Other Information	June 30, 2024		July 2, 2023		June 30, 2024		July 2, 2023
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows from finance leases	$	1.6	$	0.9	$	3.0	$	1.7
Operating cash flows from operating leases	$	26.2	$	22.0	$	53.6	$	44.2
Financing cash flows from finance leases	$	6.5	$	4.4	$	12.3	$	8.3
Right-of-use assets obtained in exchange for new lease liabilities:
Finance leases	$	16.5	$	15.3	$	32.3	$	24.0
Operating leases	$	37.5	$	22.9	$	50.1	$	72.7


	June 30, 2024			December 31, 2023
	Unrecognized Compensation (in millions)		Weighted Average Remaining Period	Unrecognized Compensation (in millions)		Weighted Average Remaining Period
Stock options	$	3.4	1.9 years	$	4.9	2.3 years
RSUs	$	29.1	2.7 years	$	23.7	2.5 years
DSUs	$	0.5	1.3 years	$	0.2	0.9 years
PSUs	$	9.6	2.2 years	$	3.9	1.7 years


(In millions, except per share information and percentages)
	2024				2023												2022
	Qtr 2		Qtr 1		Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4			Qtr 3
Net sales	$	1,413.9	$	904.8	$	965.0		$	1,145.1		$	1,353.7		$	837.4		$	890.0		$	1,102.6
Cost of goods sold	903.6		603.6		638.4			757.0			864.3			550.3			587.4			714.0
Gross profit	510.3		301.2		326.6			388.1			489.4			287.1			302.6			388.6
Selling, general and administrative expenses	343.8		327.7		332.8			311.8			320.6			291.4			304.6			289.2
Other income, net	(3.1)		(4.2)		(4.3)			(4.9)			(2.5)			(4.0)			(2.0)			(2.4)
Operating income (loss)	169.6		(22.3)		(1.9)			81.2			171.3			(0.3)			—			101.8
Interest and other non-operating expenses, net	9.0		6.7		6.5			6.4			7.3			6.9			5.5			5.6
Income tax expense (benefit)	40.0		(9.7)		(5.0)			17.5			40.0			(2.7)			(4.6)			22.9
Net income (loss)	$	120.6	$	(19.3)	$	(3.4)		$	57.3		$	124.0		$	(4.5)		$	(0.9)		$	73.3
Less: Net income attributable to non-controlling interest	0.4		—		—			—			—			—			—			—
Net income (loss) attributable to common shares	$	120.2	$	(19.3)	$	(3.4)		$	57.3		$	124.0		$	(4.5)		$	(0.9)		$	73.3
Net income (loss) per common share:
Basic	$	2.66	$	(0.43)	$	(0.08)		$	1.27		$	2.75		$	(0.10)		$	(0.02)		$	1.63
Diluted	$	2.63	$	(0.43)	$	(0.08)		$	1.25		$	2.71		$	(0.10)		$	(0.02)		$	1.60
Adjusted EBITDA(a)	$	210.5	$	21.1	$	39.9		$	119.8		$	211.2		$	39.8		$	38.9		$	135.6

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


	Total		Next 12 Months		Beyond 12 Months
Long-term debt, including current maturities	$	485.6	$	4.9	$	480.7
Interest on long-term debt	$	124.9	$	30.2	$	94.7



	Six Months Ended
Net cash provided by (used in):	June 30, 2024		July 2, 2023
Operating activities	$	48.1	$	101.2
Investing activities	$	(119.8)	$	(74.9)
Financing activities	$	61.4	$	14.0


Periods	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)(a)
April 1, 2024 - May 5, 2024	65,131	$	152.94	65,131	$	353.7
May 6, 2024 - June 2, 2024	63,791	$	154.75	63,791	$	343.8
June 3, 2024 - June 30, 2024	—	$	—	—	$	343.8
Total	128,922	$	153.84	128,922	$	343.8


Exhibit Number						Description

3.1						Fourth Amended and Restated Certificate of Incorporation of SiteOne Landscape Supply, Inc., is incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of SiteOne Landscape Supply, Inc. filed on May 13, 2024.

10.1†						Summary of Non-Employee Director Compensation, as amended and restated on May 7, 2024.

10.2						Second Amendment to the Second Amended and Restated Credit Agreement, dated as of July 2, 2024, by and among SiteOne Landscape Supply Holding, LLC, SiteOne Landscape Supply, LLC, the several banks and other financial institutions party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, is incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of SiteOne Landscape Supply, Inc. filed on July 2, 2024.

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 June 30, 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:	July 31, 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