SiteOne Landscape Supply (SITE) Tops Q4 EPS by 11c, Revenues Beat

SiteOne Landscape Supply (NYSE: SITE) reported Q4 EPS of $0.06, $0.11 better than the analyst estimate of ($0.05). Revenue for the quarter came in at $535 million versus the consensus estimate of $524.86 million.

Fourth Quarter 2019 Highlights (Compared to Fourth Quarter 2018):

• Net sales increased by 13% to $535.0 million
• Organic Daily Sales increased by 8%
• Gross profit increased 14% to $170.0 million; gross margin increased 50 basis points to 31.8%
• Net income of $2.5 million compared to net loss of $2.1 million
• Adjusted EBITDA increased 23% to $22.2 million; Adjusted EBITDA margin increased 30 basis points to 4.1%
• Net cash provided by operating activities improved 82% to $66.4 million
• Completed three acquisitions: Design Outdoor, Dirt Doctors, and Daniel Stone

“We finished strongly in the fourth quarter and delivered a solid year of performance and growth in 2019. I am proud of our team’s resiliency as we overcame unfavorable weather in the first half of the year and achieved mid-single digit Organic Daily Sales growth for the full year,” said Doug Black, SiteOne’s Chairman and CEO. “We also generated double digit net sales and Adjusted EBITDA growth while expanding our Adjusted EBITDA margin in 2019. With improved profitability and the aid of our supply chain initiatives, we were able to deliver excellent free cash flow to fund our acquisitions and lower our net debt to Adjusted EBITDA ratio to 2.6 times. Finally, our acquisition program continues at a steady pace with 10 acquisitions completed during 2019 and three more completed in the first two months of 2020. Given our robust M&A pipeline and current activity, we expect 2020 to be a good year for further acquisitions. Overall, we continue to execute our strategic initiatives while also building the foundation for SiteOne. With healthy underlying market trends, we are excited about our ability to deliver excellent results for all stakeholders in 2020 and beyond.”

Outlook

“We expect the construction markets to reflect healthy new residential construction, solid repair and upgrade activity and potentially moderating new commercial construction,” Doug Black continued. “We expect steady demand in the maintenance end market. Organic sales growth should be further supported by our increased ability to gain market share partially offset by lower expected price inflation. In total, we would expect another year of mid-single digit Organic Daily Sales growth in 2020. Further, we expect good acquisition activity in 2020 along with a higher average revenue per acquired company, both supporting an increase in acquired TTM sales and EBITDA versus 2019. Lastly, we expect to make good progress improving our Adjusted EBITDA margin in 2020.”

For 2020, we expect Adjusted EBITDA to be in the range of $213 million to $228 million, representing year-over-year growth of 6 - 13%. This guidance does not include any contributions from unannounced acquisitions.

Reconciliation for the forward-looking full-year 2020 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.

For earnings history and earnings-related data on SiteOne Landscape Supply (SITE) click here.

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