SiteOne Landscape Supply (SITE) Tops Q3 EPS by 24c, Revenues Beat; Raises FY20 Adj. EBITDA Guidance

SiteOne Landscape Supply (NYSE: SITE) reported Q3 EPS of $1.08, $0.24 better than the analyst estimate of $0.84. Revenue for the quarter came in at $751.9 million versus the consensus estimate of $698.12 million.

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

• Net sales increased by 15% to $751.9 million
• Organic Daily Sales increased by 11%
• Gross profit increased 16% to $250.1 million; gross margin increased 30 basis points to 33.3%
• SG&A as a percentage of Net sales decreased by 90 basis points to 24.4%
• Net income increased 39% to $48.2 million
• Adjusted EBITDA increased 25% to $87.8 million; Adjusted EBITDA margin increased 90 basis points to 11.7%
• Net debt to Adjusted EBITDA improved to 0.8x, compared to 2.9x in the prior year quarter
• Completed a $261.7 million common stock offering in August
• Closed two acquisitions: Alliance Stone and Modern Builders Supply

“Our terrific SiteOne team continued to execute during the third quarter, serving our customers well and taking advantage of the robust demand across our end markets driven by stay-at-home and outdoor living trends,” said Doug Black, Chairman and CEO of SiteOne. “We achieved excellent organic daily sales growth and good expense management which resulted in improved gross margin, solid SG&A leverage and strong Adjusted EBITDA margin expansion. Our acquisitions completed last year and early this year performed well, and I am pleased that we were able to restart our acquisition program by adding four additional companies to SiteOne in the last three months. Furthermore, through our equity offering and strong cash flow, we lowered our Net debt to Adjusted EBITDA ratio to less than 1x at the end of the quarter, providing ample flexibility to pursue acquisitions and strategic investments going forward. Overall, we continue to strengthen our company and build our capabilities, having successfully adjusted to the COVID-19 operating challenges. We are well-positioned to take advantage of the current favorable residential market dynamics and execute our strategy for superior long-term performance and growth.”

Outlook

Due to strong year-to-date performance and favorable market trends, we are raising our full year 2020 Adjusted EBITDA guidance to a range of $230 million to $236 million, compared to the previous range of $205 million to $225 million. The guidance range excludes contributions from unannounced acquisitions, but includes an additional week in December compared to the year ago period. Due to the seasonality of our business, this additional week will reduce Organic Daily Sales growth and Adjusted EBITDA.

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

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