Core & Main, Inc.

I'll now hand it over to Glenn Floyd, Director of Investor Relations. Please go ahead.

Good morning and thank you for joining us. I'm Glenn Floyd, Director of Investor Relations at Core and Main. We appreciate you taking the time to be with us today for our fiscal 2025 second quarter earnings call. Joining me this morning are Mark Witkowski, our Chief Executive Officer, and Robin Bradbury, our Chief Financial Officer. On today's call, Mark will begin by sharing an overview of our business and recent performance. Robin will follow with a review of our second quarter results and our outlook for the rest of fiscal 2025. We'll then open the line for Q&A and Mark will wrap up with closing remarks. As a reminder, our press release presentation materials and the statements made during today's call may include forward looking statements. These are subject to various risks and uncertainties that could cause actual results to differ materially from our expectations. For more information, please refer to the cautionary statements included in our earnings press release and in our filings with the SEC. We will also reference certain non-GAAP financial measures during today's discussion. We believe these metrics provide useful insight into the underlying performance of our business. Reconciliations to the most comparable GAAP measure are available in both our earnings press release and the appendix of today's investor presentation. Thank you again for your interest in Core and Main. I'll now turn the call over to our Chief Executive Officer, Mark Witkowski.

Thanks, Glenn, and good morning, everyone. We appreciate you joining us today. If you're following along with our second quarter earnings presentation, I'll begin on page five with a business update. I'm proud of our associates' dedication to supporting customers and delivering critical infrastructure projects. Our teams drove nearly 7% net sales growth in the quarter, including roughly 5% organic growth. Municipal demand remained healthy, supported by traditional repair and replacement activity, advanced metering infrastructure conversion projects, and the construction of new water and wastewater treatment facilities. Our non-residential end market was stable in the quarter. Highway and street projects remained strong, Institutional construction has been steady, and we're seeing continued momentum from data centers. While data centers represent a small portion of our sales mix today, customer sentiment points to continued growth in this space, and we expect it to become a larger portion of our sales mix over time. On the residential side, flat development for single family housing, which accounts for roughly 20% of our sales, slowed during the quarter. especially in previously fast-growing Sunbelt markets. We believe higher interest rates, affordability concerns, and lower consumer confidence are weighing on demand for new homes. And until these macro headwinds ease, we expect activity in this end market will continue to soften through the second half. As a result, we are factoring in a lower residential outlook into our full-year expectations which Robin will speak to in more detail. Against this market backdrop, we drove significant sales growth and market share gains across key initiatives, including treatment plant and fusible high density polyethylene projects, where our technical expertise and consistent execution continue to differentiate corn main in the industry. We're also deepening relationships with large regional and national contractors. especially those pursuing critical infrastructure projects across the country. These customers increasingly value our ability to support them with consistent service, scale, and product availability wherever their projects take them. Sales of meter products declined year over year, primarily due to project delays in the current year and a difficult comparison to last year's 48% growth rate. However, we have a growing backlog of metering projects we expect to release in the second half of the year, supporting our expectation for strong full-year metering sales growth. Additionally, a healthy pipeline of bids and continued project awards gives us confidence in both the near and long-term outlook for metering upgrade projects. Gross margins performed well in the quarter at 26.8%, up 10 basis points sequentially from Q1. and up 40 basis points year over year. Our gross margins reflect strong execution of our private label and sourcing initiatives, while our local teams continue to capture market share. At the end of the day, our performance is largely driven by how well we support our customers, making sure they have the right products at the right time with the service they need to keep projects on schedule and on budget. At the same time, our operating costs were elevated this quarter. We've experienced unusually high employee benefit costs and inflation and other categories like facilities, fleet, and other distribution related expenses. We have also carried higher costs from recent acquisitions, which have contributed to sales growth, but have not yet reached their full synergy potential. Although we anticipated some of these pressures, certain costs were more pronounced than expected. To address these factors, we have implemented targeted cost-out actions to improve productivity and operating margins. We expect a portion of the savings to be realized in the second half of this year with a larger annualized benefit in 2026. We expect to achieve additional synergies tied to recent acquisitions. Our integration approach is phased and growth-oriented, starting with people, sales, and operations to position each business for success. Once that foundation is in place, we evaluate opportunities in terms of costs and resources and develop plans to drive SG&A synergies. Our approach to cost management will be measured and focused on realigning the business with the demand environment without jeopardizing future performance, growth opportunities, or the ability to serve our customers. We remain confident in the long-term growth and profitability prospects of CoreMain. including our ability to drive SG&A improvements and generate substantial value for shareholders. We continue to be balanced in how we allocate capital. During the quarter, we generated $34 million of operating cash flow and deployed approximately $24 million across organic growth initiatives, share repurchases, and debt service. Year-to-date, we have repurchased $47 million of shares, reducing our share count by nearly 1 million. Our growth strategy is driven by organic growth and complimentary acquisitions. After the quarter, we announced the acquisition of Canada Water Works, a three branch distributor of pipe valves, fittings, and storm drainage products in Ontario, Canada. We expect the transaction to close later this month, further enhancing our position in the multi-billion dollar Canadian addressable market. With this acquisition, we now have five locations in Ontario, all established through value enhancing M&A. This has created a platform for meaningful growth in Canada. On the organic side, we're making prudent investments to enhance our capabilities and better serve customers. We recently opened new locations in Kansas City and Wisconsin, strengthening our presence in priority markets. We are also evaluating additional high growth markets for future expansion. These investments are designed to generate long-term growth, strengthen our market share, and support our goal of delivering above-market growth over the coming years. We have plans to open several more locations this year, and I look forward to sharing updates on these initiatives. Before turning the call over to Robin, I want to reiterate my confidence in CorpsMaine's growth and margin expansion opportunity. We are well positioned to benefit from future investments in aging U.S. water infrastructure, We have the right team in place to execute on the opportunities ahead, and we look forward to delivering even greater value to our customers, suppliers, communities, and shareholders. Thank you for your continued support and trust in our vision. With that, I'll turn the call over to Robin to walk through our financial results and outlook for the remainder of the year. Go ahead, Robin.