SiteOne Landscape Supply (SITE) Tops Q1 EPS by 13c, Revenues Beat; Withdraws FY Guidance

SiteOne Landscape Supply (NYSE: SITE) reported Q1 EPS of ($0.42), $0.13 better than the analyst estimate of ($0.55). Revenue for the quarter came in at $459.8 million versus the consensus estimate of $455.62 million.

First Quarter 2020 Highlights (Compared to First Quarter 2019):

• Net sales increased by 10% to $459.8 million
• Organic Daily Sales increased by 5%
• Gross profit increased 10% to $142.8 million; gross margin declined 10 basis points to 31.1%
• Net loss of $17.5 million, compared to net loss of $24.1 million
• Adjusted EBITDA loss of $3.6 million, compared to loss of $5.9 million
• Completed the acquisitions of Wittkopf Landscape Supplies, Empire Supplies, The Garden Dept., and Big Rock Natural Stone and Hardscapes
• Announced the appointment of Shannon Versaggi as Chief Marketing Officer effective February 17, 2020

Post-Quarter Highlights:

• On April 1, 2020 borrowed approximately $100 million under $375 million ABL Facility to increase cash position and financial flexibility in light of COVID-19 uncertainty

“As the COVID-19 pandemic evolved in March, we quickly focused on four fundamental objectives: 1) keep everyone safe to include our associates, customers, suppliers and communities where we live and operate, 2) provide exceptional service and support to our customers, 3) manage our business to align with lower near-term demand, and 4) take care of our associates all along the way. I am extremely proud of our team as we work together in this very challenging and uncertain environment to accomplish these objectives for the benefit of all our stakeholders,” said Doug Black, Chairman and CEO of SiteOne.

“Our strong first quarter results were dampened in the last two weeks of March as the execution of federal, state and local COVID-19 restrictions and safety measures brought about a swift reduction in demand. Despite this, we delivered very solid results for the full quarter with 5% organic daily sales growth along with EBITDA margin expansion and EBITDA dollar improvement,” continued Black. “We very rapidly implemented the CDC guidelines and modified our time-off policies in order to keep our associates safe, operate safely and support our customers who provide essential services for the maintenance, safety and welfare of our communities. We have also taken steps to manage our business by furloughing select associates with the support of the CARES Act, increasing our cash on hand by borrowing against our ABL facility, postponing pending acquisitions and tightening our expenses and capital spending. With these actions, we believe that we have ample flexibility to navigate through the uncertain times ahead. As the leading distributor to an essential industry, SiteOne remains well positioned to support our customers, suppliers and communities during this extraordinary time, while continuing to build our capabilities for the future.”

Outlook

We continue to operate as an essential business with all our branches open and serving customers. So far in April we are experiencing an organic daily sales decline of approximately 11%. This decline has been consistent from the last week of March through the first four weeks of April. We expect this trend to continue in the near-term given government mandated COVID-19 related restrictions and would anticipate an improvement in demand when restrictions are eased. As a result of uncertainties surrounding the on-going impact of COVID-19, we are withdrawing our previously provided 2020 Adjusted EBITDA guidance range.

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

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