SiteOne Landscape Supply Announces First Quarter 2016 Earnings
First Quarter 2016 Highlights:
-
Net sales increased by 45% year-over-year to $328.5 million
-
Organic net sales growth of 23%
-
Gross profit increased by 66% to $97.0 million; gross margin expanded
by 350 basis points to 29.5%
-
Net loss decreased to $5.6 million, compared to $9.8 million for the
first quarter of 2015
-
Adjusted EBITDA increased to $4.5 million compared to a $5.7 million
loss in the prior year
-
Completed the acquisition of Hydro-Scape Products which included 17
locations
ROSWELL, Ga.--(BUSINESS WIRE)--
SiteOne Landscape Supply, Inc. (the “Company” or “SiteOne”) (NYSE:SITE)
announced earnings for its first quarter ended April 3, 2016 of the
fiscal year ending January 1, 2017 (“fiscal 2016”).
“We are extremely pleased with our first quarter 2016 results as we
delivered strong increases in net sales, gross profit and Adjusted
EBITDA both organically and through acquisitions,” said Doug Black,
SiteOne’s Chief Executive Officer. “During the quarter, we benefited
from solid underlying business trends, further execution of our
operational and commercial initiatives, and favorable weather
conditions. Following the completion of our initial public offering in
May, I remain confident in our ability to execute our strategy and
deliver continued organic and acquisitive growth while expanding our
profitability.”
First Quarter 2016 Results
Net sales for the first quarter of 2016 increased to $328.5 million, or
45% compared to $225.8 million for the prior-year period. Organic sales
growth of 23% was aided by unusually favorable weather which pulled
forward demand from the second quarter, but also reflected strong
underlying market growth and continued execution of our commercial
initiatives. Our 2015 and 2016 acquisitions performed well and benefited
from the same trends, contributing another 22% in revenue growth.
Gross profit increased to $97.0 million, or 66%, compared to $58.6
million for the prior-year period. Gross margin was 29.5% for the first
quarter 2016, which was a 350 basis point increase compared to 26.0% in
the first quarter 2015. Our gross margin expansion was driven primarily
by our continued improvements in pricing and category management along
with lower inbound freight costs.
Selling, general and administrative expenses (“SG&A”) in the first
quarter increased to $104.6 million from $73.1 million in the same
period last year, reflecting the acquisitions and investments in
personnel to support our sales growth and strategic initiatives. SG&A as
a percent of net sales decreased to 31.8% from 32.4% in the prior year
period. Reported net loss for the first quarter was $5.6 million,
compared to a $9.8 million net loss during the same period from the
prior year. We typically realize a net loss in the first quarter of the
year as a result of the seasonality of our business.
Adjusted EBITDA increased to $4.5 million for the three months ended
April 3, 2016, compared to an Adjusted EBITDA loss of $5.7 million for
the prior-year period, primarily due to strong sales growth and gross
margin improvement. Our definition of Adjusted EBITDA, as used in this
release, excludes EBITDA of acquisitions prior to their respective
acquisition dates, which would have been $0.7 million and $(1.0) million
for the first quarters of 2016 and 2015, respectively.
As of April 3, 2016, net cash provided by operating activities for the
first quarter was $10.0 million versus net cash used in operating
activities of $(15.2) million in the prior year period.
Net Debt, calculated as long term debt plus capital leases, net of cash
and cash equivalents on our balance sheet as of April 3, 2016, was
$199.1 million. On a pro forma as adjusted basis, after giving effect to
the acquisition that closed subsequent to April 3, 2016, the debt
refinancing and the special cash dividend of $176.0 million and each of
the other items described in the section entitled “Capitalization”
included in our final prospectus1, we had total cash and cash
equivalents of $9.0 million, long term debt of $402.4 million, capital
leases of $10.1 million and net debt of $403.5 million as of April 3,
2016, for a leverage ratio of 3.5 times our Adjusted EBITDA for the last
twelve months. Net Debt to Adjusted EBITDA for the last twelve months
would have been 3.2 times if we used our prior definition of Adjusted
EBITDA (which is the methodology used for debt covenant purposes).
1 Final prospectus filed pursuant to Rule 424(b)(4) under the
Securities Act of 1933, as amended, filed with the U.S. Securities and
Exchange Commission on May 12, 2016 (Registration No. 333-206444).
Outlook
For 2016, Adjusted EBITDA is expected to be in the range of $132 million
to $140 million.
Reconciliation for the forward-looking full-year 2016 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, June 22, 2016, at
8 a.m. Eastern Time, to discuss the Company’s financial results. The
conference call may be accessed by dialing (877) 705-6003 (domestic) or
(201) 493-6725 (international). A telephonic replay will be available
approximately two hours after the call by dialing (877) 870-5176, or for
international callers, (858) 384-5517. The passcode for the live call
and the replay is 13638770. The replay will be available until 11:59
p.m. (ET) on July 6, 2016.
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 SiteOne Landscape Supply, Inc.
SiteOne Landscape Supply, Inc. is the largest and only national
wholesale distributor of landscape supplies in the United States and has
a growing presence in Canada. Its customers are primarily residential
and commercial landscape professionals who specialize in the design,
installation and maintenance of lawns, gardens, golf courses and other
outdoor spaces.
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of
the Federal Private Securities Litigation Reform Act of 1995.
Forward-looking statements may include, but are not limited to,
statements relating to our 2016 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; general economic and
financial conditions; weather conditions, seasonality and availability
of water to end-users; laws and government regulations applicable to our
business that could negatively impact demand for our products; public
perceptions that our products and services are not environmentally
friendly; competitive industry pressures; product shortages and the loss
of key suppliers; product price fluctuations; inventory management
risks; ability to implement our business strategies and achieve our
growth objectives; acquisition and integration risks; increased
operating costs; and other risks, as indicated in our final prospectus
filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as
amended, filed with the U.S. Securities and Exchange Commission on May
12, 2016 (Registration No. 333-206444).
Non-GAAP Financial Information
This release includes certain financial information, not prepared in
accordance with U.S. GAAP. Because not all companies calculate non-GAAP
financial information identically (or at all), the presentations herein
may not be comparable to other similarly titled measures used by other
companies. Further, these measures should not be considered substitutes
for the information contained in the historical financial information of
the Company prepared in accordance with U.S. GAAP that is set forth
herein.
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 interest expense, net of interest income and excluding
amortization of debt discount, income tax expense (benefit),
depreciation, and amortization. Adjusted EBITDA is further adjusted for
stock-based compensation expense, related party advisory fees, loss
(gain) on sale of assets and other non-cash items, other non-recurring
(income) and 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 plus capital leases, net of cash and cash-equivalents on
our balance sheet.
|
|
SiteOne Landscape Supply, Inc.
Condensed
Consolidated Balance Sheets (Unaudited)
(In millions,
except share and per share data) |
|
|
| Assets |
| April 3, 2016 |
| January 3, 2016 |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| |
$
|
20.5
| | |
$
|
20.1
| |
|
Accounts receivable, net of allowance for doubtful accounts of $4.2
and $3.6, respectively
| |
188.1
| | |
136.8
| |
|
Inventory, net
| |
324.1
| | |
265.9
| |
|
Income tax receivable
| |
10.9
| | |
7.3
| |
|
Prepaid expenses and other current assets
| |
14.7
|
| |
12.1
|
|
| Total current assets | |
558.3
| | |
442.2
| |
| | | |
|
|
Property and equipment, net
| |
64.9
| | |
66.2
| |
|
Goodwill
| |
58.3
| | |
48.0
| |
|
Intangible assets, net
| |
104.7
| | |
104.3
| |
|
Other Assets
| |
8.6
|
| |
8.0
|
|
| Total assets | |
$
|
794.8
|
| |
$
|
668.7
|
|
| | | |
|
| Liabilities and Stockholders' Equity | |
| |
|
|
Current liabilities:
| | | | |
|
Accounts payable
| |
$
|
195.0
| | |
$
|
86.4
| |
|
Current portion of capital leases
| |
3.9
| | |
4.0
| |
|
Accrued compensation
| |
21.6
| | |
30.0
| |
|
Long term debt, current portion
| |
0.6
| | |
0.6
| |
|
Accrued liabilities
| |
27.7
|
| |
23.8
|
|
| Total current liabilities | |
248.8
| | |
144.8
| |
| | | |
|
|
Other long-term liabilities
| |
9.7
| | |
8.9
| |
|
Capital leases, less current portion
| |
6.2
| | |
7.1
| |
|
Deferred tax liabilities
| |
27.7
| | |
26.2
| |
|
Long term debt, less current portion
| |
208.9
|
| |
177.1
|
|
| Total liabilities | |
501.3
|
| |
364.1
|
|
| | | |
|
|
Commitment and contingencies
| | | | |
|
Redeemable convertible preferred stock
| |
216.8
| | |
216.8
| |
| | | |
|
|
Stockholders' equity:
| | | | |
Common stock, par value $0.01; 1,000,000,000 shares authorized;
14,259,998 and
14,259,998 shares issued, and 14,241,987 and
14,250,111
shares outstanding at April 3, 2016 and January 3,
2016, respectively2 | |
0.1
| | |
0.1
| |
|
Additional paid-in capital
| |
113.7
| | |
113.1
| |
|
Accumulated deficit
| |
(36.2
|
)
| |
(24.2
|
)
|
|
Accumulated other comprehensive loss
| |
(0.9
|
)
| |
(1.2
|
)
|
| Total equity | |
76.7
|
| |
87.8
|
|
| Total liabilities and equity | |
$
|
794.8
|
| |
$
|
668.7
|
|
| | | | | | | |
|
2 All applicable share data and related information in the
consolidated financial statements have been adjusted retroactively to
give effect to the 11.6181 for 1 common stock split.
|
|
SiteOne Landscape Supply, Inc.
Condensed
Consolidated Statements of Operations (Unaudited)
(In
millions, except share and per share data) |
|
|
|
|
Three Months Ended
|
|
| |
April 3, 2016
|
|
March 29, 2015
|
| | | |
|
|
Net sales
| |
$
|
328.5
| | |
$
|
225.8
| |
|
Cost of goods sold (exclusive of depreciation)
| |
231.5
|
| |
167.2
|
|
| Gross profit | |
97.0
| | |
58.6
| |
| | | |
|
|
Selling, general and administrative expenses
| |
104.6
| | |
73.1
| |
|
Other income
| |
1.2
|
| |
0.8
|
|
| Operating loss | |
(6.4
|
)
| |
(13.7
|
)
|
| | | |
|
|
Interest and other non-operating (income) expenses, net
| |
2.6
|
| |
2.4
|
|
| Net loss before taxes | |
(9.0
|
)
| |
(16.1
|
)
|
|
Income tax benefit
| |
(3.4
|
)
| |
(6.3
|
)
|
| Net loss | |
(5.6
|
)
| |
(9.8
|
)
|
|
Less:
| | | | |
|
Redeemable convertible preferred stock dividends
| |
6.5
| | |
5.9
| |
|
Redeemable convertible preferred stock beneficial conversion feature
| |
—
|
| |
1.8
|
|
| Net loss attributable to common shares | |
$
|
(12.1
|
)
| |
$
|
(17.5
|
)
|
| | | |
|
Net loss per common share3: | | | | |
|
Basic
| |
$
|
(0.85
|
)
| |
$
|
(1.23
|
)
|
|
Diluted
| |
$
|
(0.85
|
)
| |
$
|
(1.23
|
)
|
| Weighted average number of common shares outstanding: | | | | |
|
Basic
| |
14,249,494
| | |
14,173,646
| |
|
Diluted
| |
14,249,494
| | |
14,173,646
| |
| | | | | |
|
3 All applicable share data, per share amounts and related
information in the consolidated financial statements have been adjusted
retroactively to give effect to the 11.6181 for 1 common stock split.
|
|
SiteOne Landscape Supply, Inc.
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(In
millions) |
|
|
|
|
Three Months Ended
|
|
| |
April 3, 2016
|
|
March 29, 2015
|
|
Cash Flows from Operating Activities:
| | | | |
|
Net loss
| |
$
|
(5.6
|
)
| |
$
|
(9.8
|
)
|
|
Adjustments to reconcile net (loss) to net cash provided by (used in
) operating activities:
| | | | |
|
Depreciation
| |
3.4
| | |
2.6
| |
|
Stock-based compensation
| |
0.7
| | |
0.7
| |
|
Amortization of software and intangible assets
| |
5.2
| | |
3.8
| |
|
Amortization of debt related costs
| |
0.6
| | |
0.8
| |
|
(Gain) loss on sale of equipment
| |
(0.1
|
)
| |
0.2
| |
|
Deferred income taxes
| |
—
| | |
(1.6
|
)
|
|
Other
| |
(0.2
|
)
| |
0.2
| |
|
Changes in operating assets and liabilities:
| | | | |
|
Receivables
| |
(44.2
|
)
| |
(10.9
|
)
|
|
Inventory
| |
(43.8
|
)
| |
(50.3
|
)
|
|
Income tax receivable
| |
(3.3
|
)
| |
(4.7
|
)
|
|
Prepaid expenses and other assets
| |
(1.0
|
)
| |
2.6
| |
|
Accounts payable
| |
103.5
| | |
57.3
| |
|
Accrued liabilities
| |
(5.2
|
)
| |
(6.1
|
)
|
| Net Cash Provided By (Used In) Operating Activities | |
$
|
10.0
|
| |
$
|
(15.2
|
)
|
| | | |
|
|
Cash Flows from Investing Activities:
| | | | |
|
Purchases of property and equipment
| |
(1.9
|
)
| |
(1.3
|
)
|
|
Acquisitions, net of cash acquired
| |
(31.2
|
)
| |
(55.4
|
)
|
|
Proceeds from the sale of property and equipment
| |
0.1
|
| |
—
|
|
| Net Cash Used In Investing Activities | |
$
|
(33.0
|
)
| |
$
|
(56.7
|
)
|
| | | |
|
|
Cash Flows from Financing Activities:
| | | | |
|
Equity proceeds from common stock
| |
—
| | |
1.2
| |
|
Purchase of treasury stock
| |
(0.1
|
)
| |
(0.1
|
)
|
|
Payments on capital lease obligations
| |
(1.1
|
)
| |
(1.0
|
)
|
|
Dividends paid
| |
(6.5
|
)
| |
—
| |
|
Payments on Term Loan
| |
(0.4
|
)
| |
(0.2
|
)
|
|
Net change in credit facility borrowing
| |
31.4
|
| |
75.0
|
|
| Net Cash Provided By Financing Activities | |
$
|
23.3
|
| |
$
|
74.9
|
|
| | | |
|
|
Effect of exchange rate on cash
| |
0.1
|
| |
(0.1
|
)
|
| Net Change In Cash | |
0.4
| | |
2.9
| |
| | | |
|
|
Cash and cash equivalents:
| | | | |
|
Beginning
| |
20.1
|
| |
10.6
|
|
|
Ending
| |
$
|
20.5
|
| |
$
|
13.5
|
|
| | | |
|
|
Supplemental Disclosures of Cash Flow Information:
| | | | |
|
Cash paid during the year for interest
| |
2.0
| | |
1.5
| |
|
Cash paid during the year for income taxes
| |
0.3
| | |
0.4
| |
| | | |
|
|
Supplemental Disclosures of Noncash Investing and Financing
Information:
| | | | |
|
Acquisition of property and equipment through capital leases
| |
0.1
| | |
1.1
| |
| | | | | |
|
|
|
| SiteOne Landscapes Supply, Inc. |
Adjusted EBITDA Reconciliation (Unaudited)
(In
millions) |
|
|
|
|
|
|
| Twelve Months
Ended |
|
| Three Months Ended |
|
|
|
| April 3, 2016 | | | April 3, 2016 |
|
| March 29, 2015 |
| Net income (loss) | | | |
$
|
33.1
| | |
$
|
(5.6
|
)
| | |
$
|
(9.8
|
)
|
|
Income tax benefit
| | | | |
22.4
| | | |
(3.4
|
)
| | | |
(6.3
|
)
|
|
Interest expense, net
| | | | |
11.6
| | | |
2.6
| | | | |
2.4
| |
|
Depreciation & amortization
| | | |
|
33.4
| | | |
8.6
| | | |
|
6.4
|
|
| EBITDA | | | | |
100.5
| | | |
2.2
| | | | |
(7.3
|
)
|
|
Non-cash stock-based compensation(a) | | | | |
3.0
| | | |
0.7
| | | | |
0.7
| |
|
(Gain) loss on sale of assets(b) | | | | |
0.3
| | | |
(0.1
|
)
| | | |
—
| |
|
Advisory fees(c) | | | | |
2.0
| | | |
0.5
| | | | |
0.5
| |
|
Financing fees(d) | | | | |
5.5
| | | |
—
| | | | |
—
| |
|
Rebranding and other adjustments(e) | | | |
|
5.4
| | | |
1.2
| | | |
|
0.4
|
|
| Adjusted EBITDA(f) | | | |
$
|
116.7
| | |
$
|
4.5
|
| | |
$
|
(5.7
|
)
|
| | | | | | | | | | | | | | |
|
|
(a)
|
|
Represents non-cash stock-based compensation expense recorded during
the period.
|
|
(b)
| |
Represents any gain or loss associated with the sale or write-down
of assets not in the ordinary course of business.
|
|
(c)
| |
Represents fees paid to CD&R and Deere for consulting services. In
connection with the IPO, we entered into termination agreements with
CD&R and Deere pursuant to which the parties agreed to terminate the
related consulting agreements. See “Certain Relationships and
Related Party Transactions-Consulting Agreements” within our final
prospectus.
|
|
(d)
| |
Represents fees associated with our debt amendment completed during
the 2015 Fiscal Year and our initial registration process, which
were recorded as an expense during the 2015 Fiscal Year.
|
|
(e)
| |
Represents (i) expenses related to our rebranding to the name
SiteOne, (ii) professional fees, retention and performance bonuses
related to historical acquisitions, (iii) severance payments and
(iv) consulting and professional fees. Although we have incurred
professional fees, retention and performance bonuses related to
acquisitions in several historical periods and expect to incur such
fees for any future acquisitions, we cannot predict the timing or
amount of any such fees.
|
|
(f)
| |
Adjusted EBITDA excludes any earnings or loss of acquisitions prior
to their respective acquisition dates for all periods presented.
Adjusted EBITDA under our prior definition, including
pre-acquisition acquired Adjusted EBITDA of $7.8 million (which is
excluded from the table above), would have been $124.5 million for
the last twelve months.
|
| |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160622005347/en/
Investor Relations:
SiteOne Landscape Supply, Inc.
Pascal
Convers, 470-270-7011
Executive Vice President, Strategy and
Development
[email protected]
Source: SiteOne Landscape Supply, Inc.
