Core & Main, Inc.

Hello, everyone. Thank you for joining us and welcome to the Core and Main first quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Landon Althoff, Vice President of Investor Relations. Landon, please go ahead.

Good morning, and thank you for joining us. I'm Landon Althoff, Vice President of Investor Relations at Core and Main. We appreciate you taking the time to be with us today for Core and Main's Fiscal 2026 First Quarter Earnings Call. Joining me this morning are Mark Wachowski, our Chief Executive Officer, Robin Bradbury, our Chief Financial Officer, and Brad Coles, our President. Mark will start with a business update. Brad will then discuss the value Core and Main is providing across our smart utility and treatment plant solutions initiatives. And Robin will follow with a review of our financial results and reaffirmed outlook for fiscal 2026. After, we will open the line for questions 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 release and 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 gap measures are available in both our 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 Landon, and good morning everyone. Thanks for joining us today. Before getting into the details of the quarter, it's helpful to frame the broader demand backdrop. The fundamental drivers of water infrastructure investment remain firmly intact as utilities continue to prioritize essential water infrastructure systems that support public health and community growth, creating resilient demand across our business. This demand provides a strong foundation while our diversified end market exposure helps balance near-term uncertainty and supports our performance through cycles. Against that backdrop, we delivered a solid start to fiscal 2026 with first quarter net sales of $1.9 billion, adjusted EBITDA of $226 million and adjusted diluted EPS of 72 cents. These results reflect discipline execution and the underlying resilience of our business and support our confidence in the full year outlook we communicated in March. Our associates across the business remain focused on execution and serving our customers, leveraging the competitive strengths of Corn, Maine. Our local teams bring the knowledge and experience to help customers navigate the most complex projects, simplifying their supply chains and ensuring the efficient flow of materials to keep critical infrastructure projects moving forward. That local relationship driven model supported by our national scale and capabilities, continues to differentiate Core and Main and positions us to deliver long-term value for our customers and shareholders. Turning to our end markets, municipal demand remains strong during the quarter and continues to serve as a core source of growth for the business. Activity is supported by aging water infrastructure, essential repair and replacement work, and the largely non-discretionary nature of municipal spending. These needs extend well beyond any single federal funding cycle and reflect the long-term modernization required to keep critical water, wastewater, and storm drainage systems operating reliably for communities. Approximately 95% of water infrastructure funding is supported by state and local sources. reinforcing the durable, locally driven nature of this market, and we continue to see a sustained pipeline of projects. These characteristics reinforce municipal as our most stable end market and provide a strong foundation through varying economic conditions. Non-residential demand remains mixed across project types and geographies, but overall activity has been stable. we are seeing healthy momentum in certain project types, including data centers and manufacturing facilities, with fire protection sales benefiting from strength in data center and multifamily construction activity, as well as higher steel prices. Data centers continue to gain momentum, and we are securing a steady stream of new project wins across multiple regions of the country. These projects are particularly attractive for our business given the significant water infrastructure required to support cooling systems, as well as the broader downstream demand they create within surrounding communities. We see data centers as a compelling long-term growth opportunity for Core and Main. These projects require significant investment in water, wastewater, storm drainage, and fire protection infrastructure, and involve complex, multi-phase project life cycles, that align well with our technical capabilities, product breadth, and execution expertise. Our national scale, sourcing strength, dedicated project teams, and technical resources combined with the deep relationships and local market knowledge of our branch network position us well to capture this opportunity. We are seeing strong bidding activity and customer engagement across multiple regions reinforcing our confidence in this growth driver strong data center and manufacturing activity has largely offset softness in traditional commercial construction residential markets remain challenged with year-over-year declines against a strong prior year comparison as a reminder residential lot development started out with optimism in the first quarter of fiscal 2025 but activity pulled back as we moved throughout the second quarter and softened further in the back half of the year. Since then, conditions have largely stabilized. While we have not seen further deterioration relative to how we exited fiscal 2025, we have also not seen a meaningful improvement, which is in line with our expectations. Near-term activity will continue to be influenced by interest rates and affordability, but we remain optimistic on the long-term outlook given the structural undersupply of housing and meaningful pent-up demand. Our teams remain focused on driving above market growth through the strength of our value proposition and the execution of our product, customer, and geographic expansion initiatives. For example, treatment plant and smart utility solutions, including advanced metering infrastructure, software, analytics, installation, and ongoing support delivered double digit and high single digit growth during the quarter, respectively. This performance reflects the breadth of our capabilities, which extend well beyond product distribution to supporting customers across the full lifecycle of their infrastructure needs. Over time, we have invested in both local and national resources to deepen our technical expertise, expand project support, and broaden customer coverage enabling us to serve a wider range of projects at greater scale and complexity. It also reflects growing customer demand for solutions that improve system visibility, reduce water loss, and drive more efficient infrastructure operations. Brad will cover this in more detail shortly. Technology also continues to be an important differentiator for core and main and a key enabler of our long-term growth strategy. We are focused on leveraging our industry-specific proprietary digital tools and developing AI-enabled solutions to improve productivity, enhance the customer experience, and simplify workflows for both our associates and customers. Our capabilities in these areas of focus help deepen customer relationships, improve execution across our network, and further reinforce our differentiated value proposition. We also continue to expand our geographic footprint, opening five new greenfield locations in attractive markets during the quarter. We are well on track to open a record eight to 10 greenfield locations in fiscal 2026. These openings further strengthen our local service model while extending the benefits of our national scale and capabilities into new or under-penetrated markets. Alongside our greenfield expansion, we see a robust pipeline of acquisition opportunities across our highly fragmented industry. We remain actively engaged on a number of high quality opportunities to expand our capabilities, extend our geographic reach, and add strong local talent and customer relationships. These opportunities would broaden our product and solutions offering, expand our addressable market, and deepen our technical expertise further strengthening our position as a trusted partner for municipal water infrastructure projects. We see particular opportunity to continue building out our treatment plant capabilities where we have a strong foundation and a clear path to advancing toward more comprehensive turnkey solutions similar to what we have achieved in smart utility. While timing can vary, the pipeline remains very active and M&A remains a core pillar of our growth strategy and we're confident in our ability to execute as these opportunities advance. Our gross margin initiatives continue to deliver structural improvement. In the first quarter, we expanded gross margins 50 basis points year over year, driven by continued growth in private label, sourcing optimization, and disciplined pricing execution, consistent with the trajectory we've demonstrated in recent quarters. We generated strong operating cash flow during the quarter, supporting continued reinvestment in the business while returning meaningful capital to shareholders through share repurchases. Fiscal year to date, we have deployed $125 million in repurchases, approximately 80% of what we did in all of fiscal 2025. Robin will cover our cash flow and capital allocation in more detail shortly. We're proud of our team's ability to execute in a dynamic environment. Their consistent focus and discipline, combined with the strength of our business model, positions us well to continue creating value for our customers and shareholders. I'd like to now turn it over to Brad to spend a few minutes on two areas that continue to be important municipal growth drivers for core and main, smart utility and treatment plant solutions. which are strong examples of how we create value through differentiated capabilities. Both categories benefit from the breadth of our platform, deep technical expertise, and ability to support larger, more complex customer projects, which continue to drive above market growth. Over to you, Brad.