Core & Main, Inc.

If you would like to ask a question on today's call, you may do so by pressing star 1 on your telephone keypad, or if you would like to withdraw your question, please press star 2. I will now hand the floor over to Robin Bradbury, VP, Finance and Investor Relations. Please go ahead.

Thank you. Good morning, everyone. This is Robin Bradbury, Vice President of Finance and Investor Relations for CoraMain. We are excited to have you join us this morning for our fiscal 2023 third quarter earnings call. I am joined today by Steve LeClair, our Chief Executive Officer, and Mark Wieckowski, our Chief Financial Officer. Steve will lead today's call with a business update, followed by an overview of our recent acquisitions and long-term value creation targets. Mark will then discuss our third quarter financial results and full year outlook, followed by a Q&A session. We will conclude with Steve's closing remarks. We issued our fiscal 2023 third quarter earnings press release this morning and posted a presentation to the investor relations section of our website. As a reminder, our press release presentation and the statements made during this call include forward looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ from our expectations and projections. Such risks and uncertainties include the factors set forth in our earnings press release and in the filings with the Securities and Exchange Commission. We will also discuss certain non-GAAP financial measures which we believe are useful in assessing the operating results of our business. A reconciliation of these measures can be found in our earnings press release and in the appendix of our investor presentation. Thank you for your interest in Quora, Maine. I will now turn the call over to Chief Executive Officer Steve LeClair.

Thanks, Robin. Good morning, everyone. Thank you for joining us today. If you're following along with the third quarter investor presentation, I'll begin on page five with a brief business update. Corn, Maine delivered another quarter of strong results. Sales in the third quarter were just ahead of the prior year and up 30% in the third quarter of fiscal 2021. Demand from our customers remains resilient, and we continue to execute our organic and inorganic growth initiatives. Municipal repair and replacement activity in the third quarter remains stable on a year-over-year basis. Despite still being below prior year levels, new residential lot development improves sequentially from the second quarter. There continues to be a shortage of existing homes for sale, which is driving a need for new lot development and new home construction. Many national home builders have been reporting resilient results by providing incentives, such as interest rate buy-downs, to ease affordability challenges and attract prospective buyers, which provides tailwinds for our business. We began to see non-residential volumes stabilize late in the third quarter due to our balanced exposure across various non-residential project types. We continue to see good growth in highway and street projects and increasing trend of megaprojects across the country, both of which are included in our non-residential end market and have offset some of the softness in multifamily and warehouse work. Price contribution to net sales was flat for the quarter when compared to the prior year. Most of our products are either highly specialized or made specific for our sector, which provides a resilient pricing framework for our industry, especially when roughly half of the demand for our products and services is non-discretionary in nature. Gross margin in the third quarter was 50 basis points lower than last year as inventory costs continue to catch up with the current market prices. And while we expect to see additional gross margin normalization in the fourth quarter, we have confidence in our ability to offset a portion of it through underlying gains from our margin initiatives. Cash generation is a key strength of our business. We have delivered nearly $1.1 billion of operating cash flow over the last four quarters. This cash flow has provided us with significant capacity to reinvest in organic growth, pursue strategic M&A, and return capital to shareholders. We opened two new greenfields in the third quarter, one in Spokane, Washington, and another in Fontana, California. These new locations extend our product offerings in under-penetrated markets, building on our commitment to make our products and expertise more accessible in every region we serve. Greenfields are a powerful way for us to expand geographically, and we are well positioned to do so given our scale and talent pool. Each time we add a new location, We are adding new sales resources and reducing the average distance and time for us to serve our customers' orders. This enhances our overall value proposition, giving us the opportunity to gain local market share. We have opened four Greenfields so far this year. We will continue to use Greenfields as a lever to drive above market growth and attractive markets going forward. We continue to target attractive M&A opportunities using our disciplined approach announcing three new acquisitions after the quarter, EnviroScape, Granite Water Works, and Lease Supply Company. So far this year, we have signed or closed eight acquisitions with combined annualized net sales of over $330 million. These acquisitions enhance our product offering and help us achieve a leading position in desirable markets. We are committed to our goal of driving 2% to 4% annual net sales growth from M&A each year over the next several years. And I will provide more details on our recent acquisitions shortly. Lastly, on capital deployment, we executed one share repurchase transaction during the quarter and another after the quarter, deploying nearly $300 million of capital to retire 10 million shares. We have deployed $770 million of capital so far this year to repurchase and retire 30 million shares in total. Our capital allocation strategy is clear. We expect to continue investing in organic growth and margin enhancement, execute in our robust M&A pipeline, and return excess cash back to shareholders through share repurchases or dividends. Now turning to page six, I'll provide an overview of our recent acquisitions. EnviroScape is a leading provider of geosynthetics and erosion control products operating out of one location in Ohio. Since 2003, the team at EnviroScape has established themselves as a trusted partner within the geosynthetics market due to their expertise and reputation for first-class service. Their specialty products complement our existing business, and this opportunity provides additional capacity to expand our geosynthetics reach and capabilities. Granite Water Works is a leading distributor of pipes, valves, and fittings and storm drainage products for contractors and municipalities in central Minnesota. Since 1990, their experienced team has consistently delivered high quality products and personalized service to the customers from their Wake Park, Minnesota location. The local relationships and commitment to dependable service that Granite Water Works will bring to core in Maine will greatly amplify our capabilities and presence throughout Minnesota. Lease Supply is a leading specialty distributor and fabricator of high density polyethylene pipe and other related services. including HDPE fusion equipment rentals and custom fabrication capabilities. For nearly 70 years, Lease Supply Company has been delivering innovative solutions and providing top quality products to municipalities, contractors, and other environmental and industrial customers. They operate out of four locations in Pennsylvania, South Carolina, and West Virginia, primarily serving the eastern United States. Their products and fabrication capabilities significantly enhance our HDPE product offering, while providing our customers with additional expertise in fusible pipe applications. Each of these businesses offer expansion in new geographies, enhance our product lines, and add key talent, while aligning with our strategy of advancing reliable infrastructure across the U.S. Our pipeline of potential acquisitions remains robust, We expect to continue adding and integrating businesses and support our growth. Given the fragmented nature of our industry and our modest market share, we have a significant opportunity to continue growing through acquisitions for many years to come. On page seven, we highlight the value creation story we discussed at our recent investor day. Our long-term growth algorithm starts with our end markets. We have diversified end market exposure between municipal, non-residential, and residential construction markets nationwide. We maintain a balanced mix of sales between new development and repair and replacement projects. Each of our end markets have grown in the low single-digit range historically, and we expect the fundamental demographic trends and drivers of growth in our markets to continue. We expect multi-year tailwinds in the residential and non-residential end markets. When coupled with healthy municipal budgets and the potential for significant federal proceeds, we believe end market volume growth over the long term will be between 2% to 4% per year. We've also demonstrated a history of organic above market volume growth, producing three points of market outperformance over the last five years. And we believe that our long runway of growth opportunities and under-penetrated geographies and under-penetrated product lines coupled with our industry-leading capabilities and operational excellence, will continue to drive organic above-market growth in the range of 2% to 4% annually. Our M&A pipeline is robust, and we continue to acquire businesses in our highly fragmented markets through bolt-on and complementary acquisitions. We are confident we can continue to drive another 2% to 4% of annual net sales growth from M&A over the next several years. Collectively, our end markets, above-market growth capabilities, and M&A strategy result in average annual net sales growth ranging from 6% to 12%. In terms of margins, we expect to continue executing on our private label, sourcing optimization, and pricing analytics initiatives while leveraging our scale, productivity, and operational excellence to drive 30 to 50 basis points of adjusted EBITDA margin expansion annually. We believe that our profitable growth, agile business model, and focus on efficiency will continue to generate strong operating cash flow at a rate of 60 to 70 percent of adjusted EBITDA, underpinned by a strong balance sheet to provide robust capital deployment. We are better positioned than any other distributor in our industry to capitalize on these growth levers, and we are excited about the opportunities ahead. As part of our Investor Day event, we released five-year financial targets and provided additional details on the growth, profitability, and cash flow initiatives we have in place to continue operating this business with success while driving shareholder value. I'd like to thank everyone who either attended in person or listen virtually. If you haven't seen it yet, the replay is posted on the investor relations section of our website, and I highly encourage you to watch it to get a deeper understanding of what makes our business so special and the opportunities that we have for long-term profitable growth. With that, I will now turn it over to Mark to discuss our financial results and full year outlook. Go ahead, Mark.