Q4 2024 Core & Main Inc Earnings Call

Alex: Hello and welcome to the Core & Main Q4 2024 Earnings Call. My name is Alex and I'll be coordinating the call today.

Hello, and welcome to the call and then Q4 2020 full earnings call. My name is Alex there'll be correlates to Nicole to say if.

Alex: If you'd like to ask a question once the presentation has finished, please press star followed by one on your telephone keypad.

If you'd like to ask a question. What's the presentation has finished please press star followed by one on your telephone keypad.

Robyn Bradbury: I'll now hand over to Robyn Bradbury, Senior Vice President of Finance and Investor Relations. Please go ahead. Thank you. Good morning, everyone. This is Robyn Bradbury, Senior Vice President of Finance and Investor Relations for Core & Main. We're excited to have you join us this morning for our fiscal 2024 fourth quarter and full year earnings call. I am joined today by Steve LeClair, our Chair and Chief Executive Officer, and Mark Witkowski, our Chief Financial Officer.

Badri: I don't know how to actually broken Badri senior Vice President of Finance and Investor Relations. Please go ahead.

Speaker Change: Thank you. Good morning, everyone. This is Robin Bradbury senior Vice President of Finance and Investor Relations for core and me. We're excited to have you join US. This morning for our fiscal 2020 for fourth quarter and full year earnings call.

Speaker Change: I'm joined today by Steve Leclair, our chair and Chief Executive Officer, and Mark Lukowski, Our Chief Financial Officer.

Robyn Bradbury: We will begin today's call by discussing the executive changes we announced this morning. He will then provide an overview of our business and strategy, followed by an update on our fiscal 2024 accomplishments. Mark will then discuss our financial results and fiscal 2025 outlook, followed by a Q&A session.

Speaker Change: He will begin today's call by discussing the executive changes we announced this morning.

Steve LeClair: He will then provide an overview of our business and strategy followed by an update on our fiscal 2020 for accomplishment.

Steve LeClair: Mark will then discuss our financial results and fiscal 2025 outlook, followed by a Q&A session.

Robyn Bradbury: Our press release, presentation, and the statements made during this call may include forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in our earnings press release and in our 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.

Steve LeClair: Our press release presentation and the statements made during this call may include forward looking statements.

Steve LeClair: These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections.

Steve LeClair: Such risks and uncertainties include the factors set forth in our earnings press release and in our filings with the Securities and Exchange Commission.

Steve LeClair: We will also discuss certain non-GAAP financial measures, which we believe are useful in assessing the operating results of our business.

Steve LeClair: A reconciliation of these measures can be found in our earnings press release and in the appendix of our Investor presentation.

Robyn Bradbury: Thank you for your interest in Core & Main.

Steve LeClair: Thank you for your interest in Corn me I will now turn the call over to chair and Chief Executive Officer, Steve Leclair.

Steve LeClair: I will now turn the call over to Chair and Chief Executive Officer Steve LeClair. Thanks, Robyn. Good morning, everyone. Thank you for joining us today for our fiscal 2024 fourth quarter and full year earnings call.

Steve LeClair: Thanks, Rob and good morning, everyone. Thank you for joining us today for our fiscal 2020 for fourth quarter and full year earnings call.

Steve LeClair: I'll begin by discussing the executive leadership changes we announced this morning. After much thoughtful consideration and planning, I've decided that now is the right time for a smooth transition of leadership at Core & Main. At the end of the month, I will transition to the role of Executive Chair, where I will continue to lead the board and serve as an advisor to the business to ensure a smooth transition. I'm pleased to share that Mark Witkowski, our CFO, will succeed me as CEO, and Robyn Bradbury, our Senior Vice President of Finance and Investor Relations, will become CFO.

Steve LeClair: I'll begin by discussing the executive leadership changes, we announced this morning.

Steve LeClair: After much thoughtful consideration in planning Ivy decided that now is the right time for a smooth transition of leadership at corn man.

Speaker Change: At the end of the month I will transition to the role of executive Chair.

Speaker Change: I will continue to lead the board and serve as an adviser to the business to ensure a smooth transition.

Speaker Change: I'm pleased to share that Mark Makowski, our CFO, who will succeed me as CEO and Robin Bradbury, Our senior Vice President of Finance and Investor Relations, who will become CFO.

Steve LeClair: Mark will also be joining our board of directors. Mark and Robyn know our business well and have been instrumental in the development and execution of our successful strategy. I have worked with both of them for over a decade, and I have full confidence that they are the right people to lead Core & Main going forward.

Speaker Change: Mark will also be joining our board of directors.

Speaker Change: Mark and Rob and know our business well and have been instrumental in the development and execution of our successful strategy.

Speaker Change: I have worked with both of them for over a decade.

Speaker Change: I have full confidence that they are the right people to lead corn main going forward.

Steve LeClair: It has been the privilege of a lifetime to lead this great organization, and I am so proud of what we have accomplished together, including exceptional business performance, outstanding service for our customers, and meaningful value creation for our shareholders. With this strong foundation in place, now is the right time to transition the leadership of the company to Mark, Robyn, and the rest of our talented executive team. I am confident in their ability to execute against our strategic priorities and take our organization to the next level. Now turning to our results, we were pleased to finish the year with strong momentum as we achieved 18% sales growth and solid gross margins in the fourth quarter.

Speaker Change: It has been the privilege of a lifetime to lead this great organization and I am so proud of what we've accomplished together, including exceptional business performance outstanding service for our customers.

Speaker Change: And meaningful value creation for our shareholders.

Speaker Change: With this strong foundation in place now is the right time to transition the leadership of the company to Mark Robin and the rest of our talented executive team.

Speaker Change: I am confident in their ability to execute against our strategic priorities and take our organization to the next level.

Speaker Change: Now turning to our results we were pleased to finish the year with strong momentum as we achieved 18% sales growth and solid gross margins in the fourth quarter.

Steve LeClair: Our results have truly been a team effort, and I want to thank our associates for their dedication and commitment to our customers.

Our results have truly been a team effort and I want to thank our associates for their dedication and commitment to our customers.

Steve LeClair: I'll begin on page 5 of the presentation with an overview of Core & Main and our market position. Core & Main is a leader in advancing reliable infrastructure with local service nationwide. As a specialty distributor with a dedicated focus on water, wastewater, storm drainage, and fire protection products, We provide solutions to municipalities, private water companies, and professional contractors across municipal, non-residential, and residential end markets. We have a deep portfolio of more than 225,000 products, many of which are made specific for our sector and must meet water industry regulations and local municipal specifications. Our footprint consists of more than 370 branches across 49 states, which serves as a critical link between over 5,000 suppliers and a diverse base of more than 60,000 customers.

Speaker Change: I will begin on page five of the presentation with an overview of corn, Maine and our market position.

Speaker Change: Corn main is a leader in advancing reliable infrastructure with local service nationwide.

Speaker Change: As a specialty distributor with a dedicated focus on water wastewater storm drainage and fire protection products, we provide.

Speaker Change: <unk> solutions to municipalities.

Speaker Change: But water companies and professional contractors across municipal nonresidential and residential end markets.

Speaker Change: We have a deep portfolio of more than 225000 products. Many of which are made specific for our sector and must meet water industry regulations and local municipal specifications.

Speaker Change: Our footprint consists of more than 370 branches across 49 states, which serves as a critical link between over 5000 suppliers and a diverse base of more than 60000 customers.

Steve LeClair: with no single customer accounting for more than 1% of our annual sales. We are an industry leader, yet we estimate we have only 19% share of a highly fragmented $39 billion addressable market. Our long-term opportunity to grow and gain market share is significant, as is our opportunity to grow our addressable market over time. We maintain balanced exposure across new construction, repair and replacement projects. Central to this balance is our stable, non-discretionary municipal demand. which accounts for over 40% of our sales. Municipal spending on water infrastructure has demonstrated long term resilience and is expected to continue growing, driven by the need to address aging water systems, environmental challenges, and water scarcity.

Speaker Change: With no single customer accounting for more than 1% of our annual sales.

Speaker Change: We are an industry leader yet we estimate we have only 19% share of a highly fragmented 39 billion dollar addressable market.

Speaker Change: Our long term opportunity to grow and gain market share is significant as is our opportunity to grow our addressable market over time.

Speaker Change: We maintain balanced exposure across new construction and repair and replacement projects.

Speaker Change: Central to this balances are stable non discretionary municipal demand.

Speaker Change: Which accounts for over 40% of our sales.

Speaker Change: Municipal spending on water infrastructure has demonstrated long term resilience and is expected to continue growing.

Speaker Change: Driven by the need to address aging water systems, environmental challenges and water scarcity.

Steve LeClair: Our significant exposure to municipal repair and replacement activity provides the business with a strong foundation. ensuring stability, even if our other end markets experience a period of volatility. customers partner with Core & Main for our breadth of products and services, extensive industry knowledge familiarity with local municipal specifications, convenient branch locations, and project management capabilities, all of which make it easy to do business with us. We serve both smaller local customers and large regional or national contractors with relevant expertise. Our sales associates take a consultative approach and providing tailored solutions for projects of all sizes. and we are deeply involved in our customers planning process.

Speaker Change: Our significant exposure to municipal repair and replacement activity provides the business with a strong foundation ensuring stability.

Speaker Change: EBIT, if our other end markets experienced a period of volatility.

Speaker Change: Customers partner with corn main for our breadth of products and services extensive industry knowledge.

Speaker Change: Familiarity with local municipal specifications convenient branch locations and project management capabilities, all of which make it easy to do business with us.

Speaker Change: We serve both smaller local customers and large regional or national contractors with relevant expertise.

Speaker Change: Our sales associates take a consultative approach and providing tailored solutions for projects of all sizes.

Speaker Change: And we are deeply involved in our customers' planning processes all the way from project design through completion.

Steve LeClair: all the way from project design through completion.

Steve LeClair: Our strategy is rooted in our people-first culture, where we prioritize the well-being, growth, and development of our associates. From there, we thrive by fostering an entrepreneurial mindset at the local level, being action-oriented, driving operational excellence, and then rewarding our associates with performance-based compensation. One underappreciated element in our operating model is the linkage between local expertise and national capability. We supplement our local presence with the power of scale, enabling us to value engineer complex projects by utilizing our extensive supply chain and national resources. Data centers and other megaprojects are great examples of where these capabilities come to life.

Speaker Change: Our strategy is rooted in our people first culture, where we prioritize the wellbeing growth and development of our associates.

Speaker Change: From there we thrived by fostering an entrepreneurial mindset at the local level being action oriented driving operational excellence and then rewarding our associates with performance based compensation.

Speaker Change: One underappreciated element in our operating model is the linkage between local expertise and national capabilities.

Speaker Change: We supplement our local presence with the power of scale, enabling us to value engineer complex projects by utilizing our extensive supply chain to national resources.

Speaker Change: Data centers and other Mega projects are great examples of where these capabilities come to life.

Steve LeClair: These projects require a sophisticated approach that blend local presence with national support. They involve intricate technical requirements, ever-changing timelines, in a need for precise coordination. With boots on the ground at the local level, we become intimately familiar with the specific needs and challenges of each project. offering hands-on support and quick response. Our national scale allows us to utilize our robust supply chain to secure access to the right products. while leveraging our distribution network and project management capabilities to ensure an efficient project delivery that meets timelines and stays within budget. And we do all this while maintaining the customer service and reliability that our customers have come to expect from Core & Main.

Speaker Change: These projects require a sophisticated approach that blend local presence with national support.

Speaker Change: Ball's intricate technical requirements.

Speaker Change: We're changing timelines.

Speaker Change: And a need for precise coordination.

Speaker Change: With boots on the ground at the local level, we become intimately familiar with the specific needs and challenges of each project.

Speaker Change: Offering hands on support and quick response times.

Speaker Change: Our national scale allows us to utilize our robust supply chain to secure access to the right products.

Speaker Change: Leveraging our distribution network and project management capabilities to ensure an efficient project delivery that meet timelines and stays within budget.

Speaker Change: And we do all of this while maintaining the customer service and reliability that our customers have come to expect from corn, Maine.

Steve LeClair: The impact of these capabilities are reflected in the work we do every day to help communities advance reliable infrastructure.

Speaker Change: The impact of these capabilities are reflected in the work we do every day to help communities advanced reliable infrastructure.

Steve LeClair: We highlight a great example of this on page 7 of the presentation. As you know, in August 2023, a devastating wildfire struck Lahaina, Hawaii. Nearly two years later, Lahaina's long cleanup process continues. and efforts to return to a sense of normalcy have progressed with the completion of an elementary school. Rebuilding required extensive water infrastructure, and the contractors selected to complete the project relied on Core & Main to be its one-stop shop provider. The project involved design-build plans, so the material list, quantities, and product lines changed constantly. Our nearest branch was the short distance away, enabling our local team to be on the job site daily, sometimes multiple times a day.

Speaker Change: We highlight a great example of this on page seven of the presentation.

Speaker Change: As you know in August 2023, a devastating wildfire struck lahaina Hawaii.

Speaker Change: Nearly two years later.

Speaker Change: <unk> has long cleanup process continues.

Speaker Change: In efforts to return to a sense of normalcy have progressed with the completion of an elementary school.

Speaker Change: Rebuilding required extensive water infrastructure and the contractor selected to complete the project relied on core main to be its one stop shop provider.

Speaker Change: The project involved design build plans so the material list quantities and product lines change constantly.

Speaker Change: Our nearest branch was the short distance away.

Speaker Change: Enabling our local team to be on the job site daily sometimes multiple times a day.

Steve LeClair: to ensure our customer had the right products at the right time. And if our local team didn't have the products on hand because of redesigns or change orders. They called on other Core & Main branches and product specialists along the West Coast for support. The project was completed in an impressive 95 days, marking a significant milestone in Lahaina's recovery. This school serves as a vital stepping stone, helping to re-establish a sense of community while Lahaina's permanent infrastructure is rebuilt over the next three to five years.

Speaker Change: To ensure our customer had the right products at the right time.

Speaker Change: And if our local team didn't have the products on hand, because of redesigns or change orders.

Speaker Change: They called on other cord main branches and product specialists, along the west coast for support.

Speaker Change: The project was completed in an impressive 95 days, marking a significant milestone in behind this recovery.

Speaker Change: The school serves as a vital steppingstone, helping to reestablish a sense of community.

Speaker Change: Behind as permanent infrastructure has rebuilt over the next three to five years.

Steve LeClair: Turning to our recent accomplishments. Fiscal 2024 was a notable year for Core & Main, and it marked our 15th consecutive year of positive sales growth. Our teams navigated a dynamic environment to deliver strong financial performance, including record net sales of over $7.4 billion. adjusted EBITDA of $930 million. in operating cash flow of more than $620 million. The consistency of our results is driven by our balanced business mix. Dedication and Expertise of our Associates. and our ability to generate significant cash flow to reinvest back into the business. including investments to support and execute our growth strategy.

Speaker Change: Turning to our recent accomplishments.

Speaker Change: Fiscal 2024 was a notable year for corn, Maine, and it marked our 15th consecutive year of positive sales growth.

Speaker Change: Our teams navigated a dynamic environment to deliver strong financial performance, including record net sales of over $7 4 billion.

Speaker Change: Adjusted EBITDA of $930 million in operating cash flow of more than $620 million.

Speaker Change: The consistency of our results is driven by our balanced business mix.

Speaker Change: The dedication and expertise of our associates.

Speaker Change: And our ability to generate significant cash flow to reinvest back into the business, including investments to support and execute our growth strategies.

Steve LeClair: Our product, customer, and geographic expansion initiatives produce strong results throughout the year as we continue to accelerate the adoption of new products in the industry, improve our differentiated value problem. This included strong, double-digit average daily sales growth in metering and storm drainage products, high single-digit average daily sales growth in treatment plant projects, and additional market share gains as our greenfields continue to grow and mature. We opened two new locations in attractive markets during the year to expand our reach, building on our commitment to make our products and expertise more accessible nationwide. We also welcome 10 complementary businesses to the Core & Main family, adding over $600 million of annual sales while expanding our presence in key geographies, gaining access to new product lines, and adding key talent.

Speaker Change: Our product customer and geographic expansion initiatives produced strong results throughout the year as we continued to accelerate the adoption of new products in the industry improve our differentiated value proposition.

Speaker Change: This included strong double digit average daily sales growth in metering and storm drainage products high single digit average daily sales growth in treatment plant projects in.

Speaker Change: In additional market share gains as our greenfields continue to grow and mature.

Speaker Change: We opened two new locations in attractive markets during the year to expand our reach building and our commitment to make our products and expertise more accessible nationwide.

Speaker Change: We also welcome 10 complementary businesses to the corn main family, adding over $600 million of annual sales, while expanding our presence in key geographies, gaining access to new product lines and adding key talent.

Steve LeClair: In terms of organic sales growth, we believe we outgrew the market by a couple hundred basis points in 2024. And looking ahead, we have ample opportunities to drive additional growth. expand gross margins, and improve our operating level. We continue to develop a scalable assortment of private label brands and products used in water, wastewater, geosynthetics, and fire protection applications. We added over 30,000 square feet of distribution space and more than 1,000 private label SKUs to our offerings since the end of last year. We ended fiscal 2024 with private label products representing approximately 4% of our sales.

Speaker Change: In terms of organic sales growth.

Speaker Change: We believe we outgrew the market by a couple hundred basis points in 2024 and.

Speaker Change: And looking ahead, we have ample opportunities to drive additional growth.

Speaker Change: Expand gross margins and improve our operating leverage.

Speaker Change: We continue to develop a scalable assortment of private label brands and products used in water wastewater Geo synthetics and fire protection applications.

Speaker Change: We added over 30000 square feet of distribution space.

Speaker Change: More than 1000 private label Skus to our offerings since the end of last year.

Speaker Change: We ended fiscal 2020 forward private label products, representing approximately 4% of our sales.

Steve LeClair: with an opportunity for it to grow to 10% of our sales or more over time. Our cash flow generation and flexible balance sheet allowed us to invest in the growth of the business while returning capital to shareholders. We deployed $176 million in fiscal 2024 to repurchase 4 million shares under our repurchase program. We expect to generate similar levels of operating cash flow going forward, resulting in significant available capital being reinvested in the business and returned to shareholders.

Speaker Change: With an opportunity for it to grow to 10% of our sales are more over time.

Speaker Change: Our cash flow generation and flexible balance sheet allowed us to invest in the growth of the business, while returning capital to shareholders.

Speaker Change: We deployed $176 million in fiscal 2024 to repurchase 4 million shares under our repurchase program.

Speaker Change: We expect to generate similar levels of operating cash flow going forward <unk>.

Speaker Change: Resulting in significant available capital being reinvested in the business and returned to shareholders.

Steve LeClair: Moving to our acquisition strategy and recent success. We are one of only two national distributors competing in our space, and the remainder of the market is served by hundreds of other local and regional distributors. Since 2017, we have completed over 40 acquisitions. Most of the deals were proprietarily sourced based on our relationships and reputation in the industry. We are honored that so many owners and operators in our space have chosen Core & Main as a home for their businesses. and many of them continue to thrive in leadership positions throughout our company. We are well connected with some of the best companies in our industry, and we have a healthy pipeline of potential deals to pursue.

Speaker Change: Moving to our acquisition strategy and recent success.

Speaker Change: We are one of only two national distributors competing in our space and the remainder of the market served by hundreds of other local and regional distributors.

Speaker Change: Since 2017, we have completed over 40 acquisitions.

Speaker Change: Most of the deals were proprietary sourced based on our relationships and reputation in the industry.

Speaker Change: We are honored that so many owners and operators in our space have chosen corn main is a home for their businesses.

Speaker Change: And many of them continue to thrive in leadership positions throughout our company.

Speaker Change: We are well connected with some of the best companies in our industry and we have a healthy pipeline of potential deals to pursue.

Steve LeClair: We expect to continue adding and integrating businesses in 2025 and beyond to support our long term growth and value creation effort.

Speaker Change: We expect to continue adding and integrating businesses in 2025 and beyond.

Speaker Change: To support our long term growth and value creation efforts.

Steve LeClair: Before I hand it over to Mark, I want to address a few other recent topics of interest. starting with Tara. We do not anticipate a significant impact on our business, as most of our products are produced in the United States. Where we do have exposure, we anticipate that it may lead to rising product costs, and we are working closely with our customers to ensure real-time, transparent pricing. As I mentioned last quarter, we generally view tariffs as neutral to slightly positive to our pricing and gross margin. The tariff environment continues to evolve, creating a level of uncertainty that could limit end market growth in the near term.

Speaker Change: Before I hand, it over to Mark I want to address a few other recent topics of interest.

Speaker Change: Starting with tariffs.

Speaker Change: We do not anticipate a significant impact on our business as most of our products are produced in the United States.

Speaker Change: Where we do have exposure, we anticipate that it may lead to rising product costs.

Speaker Change: We are working closely with our customers to ensure real time transparent pricing.

Speaker Change: As I mentioned last quarter, we generally view tariffs is neutral to slightly positive to our pricing and gross margins.

Speaker Change: The tariff environment continues to evolve, creating a level of uncertainty that could limit and market growth in the near term.

Steve LeClair: That being said, our spring bidding activity is encouraging and sentiment from our customers continues to be positive.

Speaker Change: That being said our spring bidding activity is encouraging and sentiment from our customers continues to be positive.

Steve LeClair: In regards to the status of federal funding, there have not been cuts to any of the water funding set aside by the Infrastructure Investment and Jobs Act. Investments in water infrastructure continue to receive bipartisan support. In part due to the extreme circumstances highlighted across the country when water, sewer, or stormwater management systems fail. Well, federal grants and low interest loans are available to municipalities to help fund their project. The vast majority of the municipal funding is produced by local revenue streams, including local taxes and utility usage fees.

Speaker Change: In regard to the status of federal funding there have not been cuts to any of the water funding set aside by the infrastructure investment and jobs Act <unk>.

Speaker Change: Investments in water infrastructure continued to received bipartisan support and.

Speaker Change: In part due to the extreme circumstances highlighted across the country when water sewer or storm water management systems fail.

Speaker Change: While federal grants in low interest loans are available to municipalities to help fund their projects.

Speaker Change: <unk> majority of the municipal funding is produced by local revenue streams, including local taxes and utility usage fees.

Steve LeClair: To wrap up my prepared remarks. Our teams have had to navigate several challenges and distractions throughout the year. And we consistently rose to the occasion, demonstrating focus, agility, and resilience. Our team's ability to adapt, collaborate, and deliver best-in-class service to our customers speaks volumes about the strength of our culture and dedication of our people.

To wrap up my prepared remarks.

Speaker Change: Our teams have had to navigate several challenges and distractions throughout the year.

Speaker Change: And we consistently rose to the occasion, demonstrating focus agility and resilience.

Speaker Change: Our team's ability to adapt collaborate and deliver best in class service to our customers speaks volumes about the strength of our culture.

Speaker Change: And dedication of our people.

Steve LeClair: Thank you all for your ongoing support. I look forward to what Core & Main will accomplish in the years ahead.

Speaker Change: Thank you all for your ongoing support.

I look forward to what corn main will accomplish in the years ahead go.

Mark Witkowski: Go ahead, Mark. Thank you, Steve. And thank you to everyone for being with us today.

Speaker Change: Go ahead Mark.

Mark: Thank you, Steve and thank you to everyone for being with us today.

Mark Witkowski: Steve, we have been so fortunate to have benefited from your tremendous leadership for over a decade at Core & I know that I speak for the entire Core & Main family in thanking you for your dedication and commitment to excellence. You've been the architect behind much of our success to date, and I'm honored to have been able to work side-by-side with you and now be selected to lead Core & Main in the next chapter alongside Robyn and the rest of our executive team. Having worked closely with Robyn for over a decade now, I know she is ideally suited to serve as our Chief Financial Officer.

Mark: Steve we have been so fortunate to have benefited from your tremendous leadership for over a decade at corn remained.

Mark: I know that I speak for the entire core main family and thanking you for your dedication and commitment to excellence.

Mark: You've done the architect behind much of our success to date.

Mark: Honored to have been able to work side by side with you and that will be selected the lead corn main in the next chapter alongside Robin and the rest of our executive team.

Mark: Having worked closely with Robin for over a decade now I know she is ideally suited to serve as our chief financial Officer.

Mark Witkowski: Robyn and I played an integral role in shaping Core & Main's current strategy, which will remain unchanged during this transition. Our focus remains on driving profitable growth both organically and through acquisitions while generating strong cash flow and delivering value to shareholders. We will continue to provide the high level of service our customers expect from Core & Main while building on the strength of our supplier relationships that are essential in achieving our growth objectives. This is an incredible business with the best talent in the industry, and I look forward to collaborating with our associates to build on the strong culture we have established.

Mark: Robyn and I played an integral role in shaping corn remains current strategy, which will remain unchanged during this transition.

Mark: Our focus remains on driving profitable growth, both organically and through acquisitions, while generating strong cash flow and delivering value to shareholders.

Mark: We will continue to provide the high level of service our customers expect from corn remain while building on the strength of our supplier relationships that are essential in achieving our growth objectives.

Mark: This is an incredible business with the best talent in the industry and I look forward to collaborating with our associates to build on the strong culture, we have established.

Mark Witkowski: With that, I'll now turn to our financial performer. Fiscal 2024 was another record sales year for Core & Since our separation seven years ago, we have grown net sales at an average annual rate of approximately 15% while significantly improving profitability. These results have been driven by our team's focus on operational excellence and delivering exceptional value to our customers. Starting with our fourth quarter results, we grew net sales by 18% to nearly $1.7 billion. Acquisitions contributed about 9% of our sales growth, and organic average daily volumes were up low single digits. As anticipated, pricing was stable on a sequential basis, but it was down slightly year over year.

Mark: With that I'll now turn to our financial performance.

Mark: Fiscal 2024 was another record sales year for corn made since our separation seven years ago, we have grown net sales at an average annual rate of approximately 15% while significantly improving profitability. These.

Mark: These results have been driven by our team's focus on operational excellence and delivering exceptional value to our customers.

Mark: Starting with our fourth quarter results, we grew net sales by 18% to nearly $1 7 billion.

Mark: Acquisitions contributed about 9% of our sales growth and organic average daily volumes were up low single digits.

Mark: As anticipated pricing was stable on a sequential basis, but it was down slightly year over year.

Mark Witkowski: Approximately 7% of our sales growth in the quarter was driven by an extra selling week compared to the fourth quarter of last year, resulting in average daily sales growth of roughly 11%. Gross margin in the fourth quarter finished at 26.6%, which was consistent with last quarter. During our third quarter call in December, we communicated our expectation of maintaining gross margins at these levels. Our team has delivered on that by driving consistent performance across our private label, sourcing, and pricing initiatives. Selling general and administrative expenses increased 21% in the fourth quarter to $279 million. The year-over-year increase in SG&A primarily reflects the impact of acquisitions, inflation, investments to support our growth initiatives, and additional costs from the 53rd week.

Mark: Approximately 7% of our sales growth in the quarter was driven by an extra selling week compared to the fourth quarter of last year, resulting in average daily sales growth of roughly 11%.

Mark: Gross margin in the fourth quarter finished at 26, 6%, which was consistent with last quarter.

Mark: During our third quarter call in December we communicated our expectation of maintaining gross margins at these levels.

Mark: Our team has delivered on that by driving consistent performance across our private label sourcing and pricing initiatives.

Mark: Selling general and administrative expenses increased 21% in the fourth quarter to $279 million.

Mark: The year over year increase in SG&A, primarily reflects the impact of acquisitions inflation investments to support our growth initiatives and additional costs from the 50 <unk> week.

Mark Witkowski: Excluding acquisitions and the impact of the 53rd week, SG&A in the fourth quarter was up approximately 2%. Adjusted EBITDA in the fourth quarter increased approximately 12% to $179 million, and adjusted EBITDA margin decreased 60 basis points to 10.5%. As a reminder, our operating margins are typically lower in our first and fourth quarters due to a reduction in volumes associated with normal seasonality. Turning to our full year performance, fiscal 2024 net sales grew approximately 11% to a record of just over $7.4 billion. The increase was driven by approximately nine points of growth from acquisitions, organic market share gains, and approximately two points of contribution from the 53rd selling week, partially offset by a minor impact from pricing.

Mark: Excluding acquisitions and the impact of the 50 <unk> week SG&A in the fourth quarter was up approximately 2%.

Mark: Adjusted EBITDA in the fourth quarter increased approximately 12% to $179 million and adjusted EBITDA margin decreased 60 basis points to 10, 5%.

Mark: As a reminder, our operating margins are typically lower than our first and fourth quarters due to a reduction in volumes associated with normal seasonality.

Mark: Turning to our full year performance.

Mark: <unk> 2024, net sales grew approximately 11% to a record of just over $7 4 billion.

Mark: The increase was driven by approximately nine points of growth from acquisitions organic market share gains and approximately two points of contribution from the 50, <unk> selling week, partially offset by a minor impact from pricing.

Mark Witkowski: We estimate that end market volumes were roughly flat for the year, consisting of mid-single-digit growth in residential lot development and low-single-digit growth in municipal repair and replacement activity, partially offset by low single-digit decline in non-residential construction starts. We achieved a couple hundred basis points of above market sales growth from the execution of our product, customer and geographic expansion initiatives, as our teams have done an incredible job delivering best in class service to our customers, improving our value proposition to the end. We also drove additional market share gains from strategic acquisition. Strengthening Our Presence in Key Geographies and Product Gross margins for the year came in at 26.6% compared with 27.1% for fiscal 2023, a difference of about 50 basis points and in line with our expectations.

Mark: We estimate that end market volumes were roughly flat for the year consisting of mid single digit growth in residential lot development and low single digit growth in municipal repair and replacement activity, partially offset by a low single digit decline in nonresidential construction starts.

Mark: We achieved a couple of hundred basis points of above market sales growth from the execution of our product customer and geographic expansion initiatives as our teams have done an incredible job delivering best in class service to our customers and proving our value proposition to the industry.

Mark: We also drove additional market share gains from strategic acquisitions, strengthening our presence in key geographies and product lines.

Mark: Gross margins for the year came in at 26, 6% compared with 27, 1% for fiscal 2023, a difference of about 50 basis points and in line with our expectations.

Mark Witkowski: The year over year decline in gross margin was driven by a higher average cost of inventory this year compared to fiscal 2023. Going forward, we expect to continue driving sustainable gross margin enhancement through the execution of our initiative. Selling general administrative expenses for fiscal 2024 increased approximately 16% to nearly $1.1 billion. The increase in SG&A primarily reflects the impact of acquisitions, inflation, investments to support our growth initiatives, and additional costs from the 53rd Excluding acquisitions and the impact of the 53rd week, SG&A expenses were up about 1% for the year. Interest expense for fiscal 2024 was $142 million, compared with $81 million in the prior year.

Mark: The year over year decline in gross margin was driven by a higher average cost of inventory this year compared to fiscal 2023.

Mark: Going forward, we expect to continue driving sustainable gross margin enhancement through the execution of our initiatives.

Mark: Selling general and administrative expenses for fiscal 2024 increased approximately 16% to nearly $1 1 billion.

Mark: The increase in SG&A, primarily reflects the impact of acquisitions inflation investments to support our growth initiatives and additional costs from the 50 <unk> week.

Mark: Excluding acquisitions and the impact of the 50 <unk> week SG&A expenses were up about 1% for the year.

Mark: Interest expense for fiscal 2024 was $142 million compared with $81 million in the prior year.

Mark Witkowski: The increase was due to higher average borrowings, partially offset by a decrease in rates on our variable rate debt. The provision for income taxes for fiscal 2024 was $143 million compared with $128 million in the prior year. and our effective tax rates were 24.8% and 19.4% respectively. Our effective tax rate for fiscal 2024 reflects a more normalized ongoing rate, and the increase over the prior year was due to exchanges of partnership interest in fiscal 2023, resulting in a reallocation of taxes to Core & Main. Adjusted EBITDA for fiscal 2024 increased 2% to $930 million and adjusted EBITDA margin decreased 110 basis points to 12.5%.

Mark: The increase was due to higher average borrowings partially offset by a decrease in rates on our variable rate debt.

Mark: The provision for income taxes for fiscal 2024 was $143 million compared with $128 million in the prior year and.

Mark: And our effective tax rates were $24, eight and 19, 4% respectively.

Mark: Our effective tax rate for fiscal 2024 reflects a more normalized ongoing rate and the increase over the prior year was due to exchanges of partnership interest in fiscal 2023, resulting in a reallocation of taxes to corn main Inc.

Mark: Adjusted EBITDA for fiscal 2024 increased 2% to $930 million and adjusted EBITDA margin decreased 110 basis points to 12, 5%.

Mark Witkowski: Moving to our balance sheet and cash flow. We ended the year with net debt of roughly $2.3 billion and net debt leverage of 2.4 times. Total liquidity was over $1.1 billion, consisting primarily of availability under an ABL credit facility. We generated $621 million of operating cash flow during the year and allocated it to priorities that resulted in growth and value creation for shareholders. We spent $741 million on 10 acquisitions and returned $176 million of capital to shareholders. buying back approximately 4 million shares at an average price of approximately $44 a share. We have now returned over $1.5 billion of capital to shareholders through share repurchases in the past two years.

Moving to our balance sheet and cash flow.

Mark: We ended the year with net debt of roughly $2 3 billion and net debt leverage of two four times total liquidity was over $1 1 billion.

Mark: Consisting primarily of availability under our ABL credit facility.

Mark: We generated $621 million of operating cash flow during the year and allocated it to priorities that resulted in growth and value creation for shareholders.

Mark: We spent $741 million on 10 acquisitions and returned $176 million of capital to shareholders.

Mark: Buying back approximately 4 million shares at an average price of approximately $44 a share.

Mark: We have now returned over $1 $5 billion of capital to shareholders through share repurchases in the past two years.

Mark Witkowski: And as of today, we still have $324 million remaining under our current repurchase authorization.

Mark: And as of today, we still have $324 million remaining under our current repurchase authorization.

Mark Witkowski: Turning to our outlook for fiscal 2025, we expect another year of growth in both sales and profitability. While there are uncertainties surrounding interest rates, federal funding, tariffs, and their potential impact on construction activity, we are confident in our ability to navigate these challenges and deliver strong results, especially given our exposure to non-discretionary municipal water infrastructure projects and the long runway of opportunities we have to drive above-market growth and margin expansion. We remain bullish on the long term fundamentals for residential lot development. With mortgage rates trending lower in recent weeks, we have yet to see that materialize into a release of pent-up demand that could accelerate growth.

Mark: Turning to our outlook for fiscal 2025, we expect another year of growth in both sales and profitability.

Mark: There are uncertainties surrounding interest rates federal funding tariffs and their potential impact on construction activity. We are confident in our ability to navigate these challenges and deliver strong results, especially given our exposure to non discretionary municipal water infrastructure projects and the long runway of opportunities.

Mark: We have to drive above market growth and margin expansion.

Mark: We remain bullish on the long term fundamentals for residential lot development.

Mark: With mortgage rates trending lower in recent weeks, we have yet to see that materialize into a release of pent up demand that could accelerate growth.

Mark Witkowski: We anticipate an inflection point in residential demand as mortgage rates fall and sustain at lower levels, but given the uncertainty around timing, we are not factoring that into our outlook. We believe non-residential construction starts will be relatively flat in 2025. The broader macroeconomic environment may continue restraining investment and construction in the non-residential sector, but some businesses remaining cautious about starting new capital projects. Our broad exposure within this market, spanning traditional, commercial, through heavy industrial, and even highway and street projects, generally provides stability as demand for these projects can happen on different cycles. Municipal spending on water infrastructure is expected to remain resilient with end market growth projected in the low single digit range for 2025.

Mark: We anticipate an inflection point in residential demand as mortgage rates fall and sustain at lower levels, but given the uncertainty around timing, we're not factoring that into our outlook.

Mark: We believe nonresidential construction starts will be relatively flat in 2025.

Mark: <unk> macroeconomic environment May continue restraining investment in construction in the nonresidential sector, but some businesses remaining cautious about starting new capital projects.

Mark: Our broad exposure within this market spanning traditional commercial through heavy industrial and even highway and street projects generally provides stability as demand for these projects can happen on different cycles.

Mark: Municipal spending on water infrastructure is expected to remain resilient with end market growth projected in the low single digit range for 2025.

Mark Witkowski: The stability is driven by necessary investments in water and wastewater systems as municipalities continue to address aging infrastructure and comply with environmental regulations. To help fund these initiatives, municipalities have raised water and wastewater utility rates at a mid-single-digit average annual increase over the last decade. We are optimistic about the growth of this end market in 2025 and beyond. We anticipate that prices will remain sequentially stable through 2025, resulting in a roughly neutral sales impact for the year. We offer a strong value proposition to the industry and expect to achieve another two to four points of above-market volume growth by expanding our presence in underpenetrated geographies, driving the adoption of new products in the industry, and acquiring and developing new sales For more information visit www.fema.gov We expect two points of sales growth from the acquisitions that have already closed.

Mark: This stability is driven by necessary investments in water and wastewater systems.

Mark: <unk> continued to address ageing infrastructure and comply with environmental regulations.

Mark: To help fund these initiatives municipalities have raised water and wastewater utility rates at a mid single digit average annual increase over the last decade, we are optimistic about the growth of this end market in 2025 and beyond.

Mark: We anticipate that prices will remain sequentially stable through 2025, resulting in a roughly neutral sales impact for the year.

Mark: We offer a strong value proposition to the industry and expect to achieve another two to four points of above market volume growth by expanding our presence in underpenetrated geographies driving the adoption of the new products in the industry and acquiring and developing new sales talent.

Mark: We expect two points of sales growth from the acquisitions that have already closed.

Mark Witkowski: We have a good pipeline of high-quality targets, and we expect to add more companies to the Core & Main family throughout the year. We benefited from a 53rd selling week in fiscal 2024, contributing approximately 2% of our total sales growth. We expect a sales impact of roughly the same amount in fiscal 2025 due to fewer selling days in the fourth quarter. We expect to drive gross margin expansion in 2025, supported by our private label, sourcing optimization, and pricing initiatives. With these factors in mind, we expect fiscal 2025 net sales to range from $7.6 to $7.8 billion, reflecting year over year growth at 2 to 5%, or 4 to 7% on an average daily sales base.

Have a good pipeline of high quality targets, and we expect to add more companies to the core <unk> family throughout the year.

Mark: We benefited from a 50 <unk> selling week in fiscal 2024, contributing approximately 2% of our total sales growth.

Mark: We expect the sales impact of roughly the same amount in fiscal 2025 due to fewer selling days in the fourth quarter.

We expect to drive gross margin expansion in 2025 supported by our private label sourcing optimization and pricing initiatives.

Mark: With these factors in mind, we expect fiscal 2025 net sales to range from seven 6% to $7 8 billion, reflecting year over year growth of 2% to 5% or 4% to 7% on an average daily sales basis.

Mark Witkowski: We expect adjusted EBIT data range from $950 million to $1 billion, reflecting year-over-year growth of 2% to 8% or 4% to 10% on an average daily sales basis. with adjusted EBITDA margins ranging from 12.5 to 12.8. We expect to generate strong operating cash flow and our capital allocation priority is to invest in the growth of the business, both organically and through the execution of our M&A strategy. We expect to have excess capital after delivering on these objectives, which will allow us to return capital to shareholders, likely through share repurchases. In the near term, we will continue evaluating our pipeline of priority targets while maintaining liquidity and leverage levels within our stated objectives.

Mark: We expect adjusted EBITDA to range from $950 million to $1 billion.

Mark: Reflecting year over year growth of 2% to 8% or 4% to 10% on an average daily sales basis.

Mark: With adjusted EBITDA margins, ranging from 12, 5% to 12, 8%.

Mark: We expect to generate strong operating cash flow and our capital allocation priority is to invest in the growth of the business, both organically and through the execution of our M&A strategy.

Mark: We expect to have excess capital after delivering on these objectives, which will allow us to return capital to shareholders likely through share repurchases.

Mark: In the near term, we will continue evaluating our pipeline our priority targets, while maintaining liquidity and leverage levels within our stated objectives.

Mark Witkowski: As I wrap up, I want to reiterate that we are confident in the fundamentals of our industry and in Core & Main's leadership position. Our sector has strong fundamentals and we have a unique and proven business model to continue strengthening our position. The long-term underlying trends of our end markets are favorable, and our products and services play a critical role in advancing reliable infrastructure. We expect to outperform the market even as the broader economic environment evolves. Our business is well positioned to capitalize on opportunities for growth, both organically and inorganically, and we remain committed to building on our track record of delivering value to shareholders.

Mark: As I wrap up I want to reiterate that we are confident in the fundamentals of our industry and inquiry remains leadership position.

Mark: Our sector has strong fundamentals and we have a unique and proven business model to continue strengthening our position.

Mark: Long term underlying trends of our end markets are favorable and our products and services play a critical role in advancing reliable infrastructure.

Mark: We expect to outperform the market, even as the broader economic environment evolves, our business is well positioned to capitalize on opportunities for growth, both organically and Inorganically and we remain committed to building on our track record of delivering value to shareholders.

Alex: With that, let's open it up for questions. Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. If you'd like to remove your question, you may press star followed by two.

Mark: With that let's open it up for questions.

Mark: As a reminder, your lines ask a question. Please press star one on your telephone keypad.

Mark: You May ask your question you May press staff I'd like to say.

David Manthey: Our first question for today comes from David Manthey of Baird. Your line is now open, please go ahead. Yeah, thank you.

Speaker Change: Our first question for today comes from David Manthey of Baird. Your line is now open. Please go ahead.

David Manthey: Yeah. Thank you good morning, and congrats to everyone on the role changes within the company.

Mark Witkowski: Good morning and congrats to everyone on the role changes within the company. First question this morning, probably not unsurprising on pricing. Could you tell us what percentage of COGS is PVC today and what expectations are baked into the guidance you provided? And then if maybe you could comment on price expectations in any other category, whether it's commodity products or engineered products like valves, meters, fire protection, etc. Yeah, thanks, Dave. It's Mark. Appreciate the question. You know, on pricing, I would tell you that, you know, municipal PVC pipe, that's less than 15% of our cogs. You know, we've seen, you know, over the course of this past year, you know, some of that come off of its high levels that we saw in 22 and in 23.

David Manthey: First question this morning, probably not unsurprising on pricing.

David Manthey: Could you tell us what percentage of Cogs as PVC today, and what expectations are baked into the guidance you provided and then.

David Manthey: Maybe you could comment on price expectations in any other category, whether it's commodity products are engineered products like valves meters fire protection et cetera.

David Manthey: Yes, Thanks, Dave It's Mark I appreciate the question.

David Manthey: On pricing I would tell you that municipal PVC pipe.

David Manthey: Less than 15% of our Cogs.

David Manthey: We've seen over the course of this past year some of that come off of its high levels that we saw in 'twenty. Two 'twenty three so that's played into some of the slight headwind that we saw in 2024 I would tell you is as we go forward as we're thinking about the price environment right now we believe that's going to be.

Mark Witkowski: So, you know, that's played into some of the slight headwind that we saw in 2024. You know, I would tell you as we as we go forward, as we're thinking about, you know, the price environment right now, we believe it's going to be an overall neutral environment. You know, we're not going to necessarily guide to specific product categories, but you can assume, you know, baked into that, that we expect to see some of the price increases that we've seen recently from suppliers stick in the market. And, you know, we could have some other categories like we've seen pressure, you know, and steel piping throughout 2024 continue to be a headwind for us at the beginning of the year.

David Manthey: And overall neutral environment.

David Manthey: I don't necessarily guide to specific product categories, but.

David Manthey: You can assume baked into that that we expect to see.

David Manthey: Some of the price increases that we've seen recently from suppliers.

David Manthey: <unk> in the market and we could have some other categories like we've seen pressure.

David Manthey: And steel piping trout 2024 continues to be a headwind for us at the beginning of the year, but.

Mark Witkowski: But, you know, overall, we've been pleased with the resilience of municipal PVC pipe, which, you know, is another reason why we think overall, you know, the price environment is going to be neutral into 2025.

David Manthey: <unk>, we've been pleased with the resilience of municipal PVC pipe.

David Manthey: It's another reason why we think overall the price environment is going to be neutral to 2025.

David Manthey: Yeah.

Mark Witkowski: Thank you for that. Second. Is there any way you could provide some insight into first quarter trends so far? I mean, there's been a little bit of weather early in the year and any other factors that are influencing the current environment. It doesn't sound like you're expecting conditions to improve too much through 2025 in your outlook, I just wanted to reconfirm that. And then relative to that also, unannounced acquisitions, there's nothing in guidance for deals you haven't done yet, correct? Yeah, that's correct, Dave. Nothing in the guidance for deals that aren't announced, but we do have about two points of carryover from the acquisitions that we did complete in 2024.

David Manthey: Thank you for that second.

David Manthey: Is there any way you could provide some.

Insight into first quarter trends, so far I mean, theres been a little bit of weather early in the year and any other factors that are influencing the current environment. It doesn't sound like you are expecting conditions to improve too much through 2025, and your outlook and just wanted to reconfirm that and then realm.

David Manthey: To that also unannounced acquisitions, then there's nothing in guidance for deals you haven't done yet correct.

David Manthey: Yes, that's correct David nothing in the guidance for deals that aren't announced but we do have about two points of.

David Manthey: A carryover from the acquisitions that we did complete in 2024.

Mark Witkowski: As it relates to the start of 2025, I'd say we're very pleased with how things have gotten off here early in the year. I'd say we're kind of right in line with expectations. There was a little bit of weather in January as kind of we finished up the fourth quarter that we experienced there, but it wasn't necessarily unexpected given the time of year. So, good to see some of the momentum. Our bidding activity is strong. Backlog's looking good and really pleased with how things are starting off in the first part of this year.

David Manthey: As it relates to the start of 2025, I'd say, we're very pleased with how those things.

David Manthey: Things have gotten off here early in the year I'd say, we're kind of right in line with expectations there was a.

David Manthey: A little bit of weather in January as kind of we finished up the.

David Manthey: The fourth quarter.

David Manthey: We experienced there, but it wasn't necessarily unexpected given the time of year.

David Manthey: Good to see some of the momentum our bidding activity is strong backlogs looking good and I'm really pleased with how things are starting off in the first part of this this year.

Mark Witkowski: Perfect.

Mark Witkowski: Thank you very much. Thank you.

David Manthey: Perfect. Thank you very much.

David Manthey: Yeah.

David Manthey: Okay.

Matthew Bouley: Thank you. Our next question comes from Matthew Bouley of Barclays.

Matthew Bouley: Our next question comes from Matthew Bouley of Barclays. Your line is now open, please go ahead. Good morning, you have a NECA doc now on for Matt today. Thank you for taking my question. Congrats to you guys on the new roles.

Speaker Change: Your line is now open. Please go ahead.

Matthew Bouley: Good morning, do you have any good Ross on for <unk>.

Speaker Change: Matt today. Thank you for taking my question and congrats you guys have any rules.

Mark Witkowski: So first off, I wanted to talk about the end market outlook. Rezzy Flat, Non-Rez Flat, Muni Low Single Digit. I'm wondering between resi and non-res, where you guys see more upside. you know, taking into account some of the top year market trends today. Yeah, sure. Thanks for the question. You know, you're right on the end markets, you know, the way we're thinking about them right now, just given, you know, a lot of the uncertainty that we've been seeing and hearing about in the market, you know, some of the commentary from the home builders has been a little mixed.

Speaker Change: So first off wanted to talk about the end market outlook.

Speaker Change: I assume.

Speaker Change: Whereas the flat spot.

Speaker Change: Jeff.

Speaker Change: I'm wondering between rising non res great guys see more upside in Q2.

Speaker Change: The couch the choppy market challenges today.

Speaker Change: Okay.

Speaker Change: Yes sure. Thanks for the question Youre right on the end markets. The way we are thinking about them right now just given a lot of the uncertainty that we've been seeing and hearing about in the market. Some of the commentary from the homebuilders has been a little mix. So we're going into 2025 kind of assuming we.

Mark Witkowski: So, you know, we're going into 2025, kind of assuming we see continued steady, you know, construction on the private side, both resi and non-residential. We have seen, though, I would say mortgage rates start to creep down a little bit. If we start to see a little bit more relief there, I think on the mortgage side, you'll see a good release of a lot of the pent-up demand, you know, that we experience on the lot development side. You know, there's been, you know, we exited 25 with a little momentum there, but we're definitely going to be cautious on that as we get out into the early part of 25 until we see some of those rates start to tick down.

Speaker Change: See continued steady.

Speaker Change: Construction on the private side, both Reza and nonresidential.

Speaker Change: We have seen though I would say mortgage rates start to start to creep down a little bit if we start to see a little bit more relief there I think on the mortgage side Youll see.

Speaker Change: Good release of a lot of the pent up demand.

Speaker Change: We experienced on the lab development side.

Speaker Change: There has been we exited 25 with a little momentum there, but we're definitely going to be cautious on that as we get out into the early part of 2005 until we see some of those rates start to tick down.

Mark Witkowski: Non-residential, I would say we've got a lot of still good stability in that market for us with a lot of the road bridge work continues to be solid. There's a lot of good mega projects that we're involved with that are going strong, you know, expect that momentum to continue and help kind of buffer any softness on more of the commercial side, which, you know, tends to follow the residential release, you know, after, you know, some of the residential release, you'll start to see the commercial side of that non-residential tick up as well. And then, you know, from a municipal standpoint, it's been really strong.

Speaker Change: Non residential I would say, we've got a lot of still a good stability in that end market for us with a lot of the road bridge, where it continues to be solid there is a lot of good mega projects that we're involved with that are that are going strong.

Speaker Change: I expect that momentum to continue and help kind of buffer any any softness on more of the commercial side, which tends to follow the residential release after 12 months to 18 months or so so there is upside I'd say on both if we see some of the residential release Youll start to see the commercial.

Speaker Change: Side of that nonresidential tick up as well.

Speaker Change: And then from a municipal standpoint, it's been really strong exit exited the year in 'twenty four with really good activity and we continue to make really strong investments in that part of the business and expect that to be very steady and resilient all throughout 2025.

Mark Witkowski: It exited the year in 24 with really good activity, you know, we continue to make really strong investments in that part of the business and expect that to be, you know, very steady and resilient all throughout 2025.

Mark Witkowski: Great, thank you for that. And then on your expectation for gross margin expansion through fiscal 25, I'm wondering on the key levers driving this growth, you have private label, sourcing, pricing, if you guys can just bucket that in terms of what's driving it the most, and then should we assume the cadence is similar? Historic, or if there's any. fitter on that. Yeah, sure. You know, from a gross margin expansion standpoint, I would say private label continues to be one of our best levers for expansion there. We made a lot of really good progress on that.

Great. Thank you for that and then on your expectation for gross margin expansion through fiscal 'twenty five I'm wondering on the key levers driving this growth you have private label sourcing pricing you guys can just bucket that.

Speaker Change: In terms of what's driving it the most and then should we assume the cadence is similar to historic or if theres any differences to consider.

Speaker Change: That margin expansion through the year. Thanks.

Speaker Change: Yes, sure you know from a gross margin expansion standpoint, I would say private label continues to be one of our best levers for expansion. There. We made a lot of really good progress on that in 2024, we increased our penetration of private label from 2% to 4% of Rev.

Mark Witkowski: And in 2024, we increased our penetration of private label from 2% to 4% of revenue and really pleased with the continued investments we've made there and the margin that that's producing. Sourcing optimization, I'd probably categorize as second. You know, really good progress in 2024 as we built scale, especially with some of the acquisitions that we did. And then, you know, still pretty early innings on price optimization, but we got some really good results in 2024 that really helped offset some of the, you know, the gross margin normalization that we expected. And, you know, we're able to outperform that.

Speaker Change: <unk> and really pleased with the continued investments we've made there in March and that's that's producing.

Speaker Change: Sourcing optimization I would probably categorize as second.

Speaker Change: Really good progress in 2024, as we built scale, especially with some of the acquisitions that we did.

Speaker Change: Then it's still pretty early innings on price optimization, but we got some really good results in 2024 that really helped to offset some of the.

Speaker Change: The gross margin normalization that we expected and we were able to outperform that.

Mark Witkowski: Thanks, I'll pass it on. All right, thank you. Thank you.

Speaker Change: Thanks, I'll pass it on.

Speaker Change: Alright, thank you.

Speaker Change: Yeah.

Joe Ritchie: Our next question comes from Joe Ritchie of Golden Sites. The line is now open, please go ahead. Hey, good morning, everyone. And echo everybody's congratulations. Well deserved, Mark and Robyn. And thanks so much for all the help throughout the throughout the year.

Speaker Change: Thank you. Our next question comes from Joe Ritchie of Goldman Sachs. Your line is now.

Eitan: Eitan. Please go ahead.

Speaker Change: Hey, good morning, everyone and Echo everybody's congratulations well deserved mark and Robin.

Eitan: Thanks, so much for all the help throughout the throughout the year Steve.

Eitan: Just the.

Joe Ritchie: My first question, I guess, would be just on margins and thinking through this guidance of zero to up 30 relative to the long-term expectations and what you had previously stated investor day. I think you guys had historically been planning for 30 to 50 basis points. It's just wondering whether anything has kind of changed on the margin regarding your ability to expand margins. Yeah, Joe, thanks for the comments and appreciate the question there. So, I would tell you nothing's really changed, you know, in terms of our expectations on the ability to expand margins, you know, through these cycles.

Speaker Change: My first question I guess would be just on margins.

Speaker Change: And thinking through the guidance.

Speaker Change: Zero to up 30.

Speaker Change: Relative to the long term expectations and what you had previously stated at Investor Day, and thank you guys.

Speaker Change: Had historically been planning for 30 to 50 basis points. That's just wondering like whether anything has changed on the margin.

Speaker Change: Regarding your ability to expand margins in this environment.

Speaker Change: Yes, Joe Thanks for the comments and I. Appreciate the question. There. So I would tell you nothing has really changed in terms of our expectations on the ability to expand margins.

Speaker Change: Through this through the cycle.

Mark Witkowski: I would say, you know, obviously the ability to get some additional productivity out of SG&A in a relatively soft end market is probably the bigger component that's going into our 2025 guide. You know, as we get closer to the kind of the mid-single-digit expectations on revenue, you know, allows us to be, you know, much more productive from an SG&A standpoint.

Speaker Change: Would say, obviously the ability to get some additional productivity out of SG&A and a relatively.

Speaker Change: Soft end market is probably the bigger component that's going into our 2025 guide as we get closer to the kind of a mid single digit expectations on revenue allows us to be much more productive from an SG&A standpoint.

Mark Witkowski: And, you know, we continue to make investments to, you know, grow revenue and be more productive, but, you know, we'll start seeing those pay off as we get into a little bit better, you know, market environment. Okay, that's that's helpful, Mark.

Speaker Change: We've continued to make investments to grow revenue and be more productive that we will.

Speaker Change: To start seeing those pay off.

Speaker Change: So as we get into a little bit better market environment.

Speaker Change: Yeah.

Speaker Change: Okay. That's helpful. Marc and then I guess.

Mark Witkowski: And I guess, maybe just sticking with the SG&A piece, you know, thanks for laying out, you know, the how much SG&A was actually up, I think what you said 1% year over year when you excluded the impact from the 53rd week in acquisitions, I guess, just in terms of the acquisition and your ability to get after some of that SG&A. Can you just maybe just give us some some contextualize like what the opportunity is here in 2025 from from the recently announced M&A? Yeah, yeah, Joe, as I mentioned, yeah, when you exclude the 53rd week and the acquisitions, you know, SG&A was up only about 1% for the full year.

Speaker Change: Maybe just sticking with the SG&A piece.

Speaker Change: Thanks for laying out.

Speaker Change: How much SG&A was actually up I think what you said, 1% year over year. When you excluded the impact from the 50 <unk> week in acquisitions I guess, just in terms of the acquisition and your ability to get after some of that SG&A.

Speaker Change: Can you just maybe just give us some some contextualize like what the opportunity is here in 2025 from the recently announced M&A.

Speaker Change: Yes, Joe as I mentioned, when you exclude the 50 <unk> week and the acquisitions.

Speaker Change: G&A was up only about 1% for the full year and that really reflects.

Mark Witkowski: And that really reflects, you know, a lot of continued investments that we've made in the business. In addition, you know, there's been a lot of inflation flowing through a lot of the, a lot of the cost categories, and then we were able to offset a lot of those costs, you know, with some other cost out acquisitions, cost out actions, I would say on the on the M&A side, we're typically going to work to scale those those businesses as we as we integrate them. You know, the integration of those businesses, you know, from a cost standpoint, can take a little bit longer and generally, you know, 12 to 18 months to really start driving more of the revenue synergy to scale those.

Speaker Change: A lot of continued investments that we've made in the business. In addition, there's been a lot of inflation flowing through a lot of a lot of cost categories and then we were able to offset.

Speaker Change: Out of those costs.

Speaker Change: With some other cost out acquisition cost out actions I would say on the on the M&A side, where typically.

Speaker Change: Kind of going to work to scale those businesses as we as we integrate them.

Speaker Change: The integration of those businesses from a cost standpoint.

Speaker Change: Can take a little bit longer and generally 12 to 18 months to really start driving more of the revenue synergy to scale those in.

Mark Witkowski: And, you know, if it if it turns out that, you know, we need to take some some cost out actions to right size some of that, you know, we'll certainly do that as part of the integration process. But I do expect that to be some potential upside as we go into 2025 to get some additional productivity. Okay, thanks. I'll get back. Thanks. Thank you.

Speaker Change: If it turns out that we need to take some some cost out actions to right size. Some of that we will certainly do that as part of the integration.

Speaker Change: Process, but I do expect that to be some potential upside as we go into $2025 to get some additional productivity.

Speaker Change: Okay. Thanks, I'll get back in queue.

Speaker Change: Thanks.

Speaker Change: Sure.

Nigel Coe: Our next question comes from Nigel Coe of Wolf Research.

Speaker Change: Thank you. Our next question comes from Nigel.

Nigel Coe: Your line is now open, please go ahead. Oh, good morning, thanks. Steve, congrats on a great career. And Mark, Robyn, good luck with the next step.

Speaker Change: Wolfe Research. Your line is now open. Please go ahead.

Speaker Change: Oh good morning, Thanks, Steve Congrats on a great career.

Speaker Change: And Mark Robyn.

Speaker Change: Good luck with the next the next step.

Steve LeClair: Steve, maybe start with you. I think you've been very involved in the M&A process for Core & Main. Just wondering how that cultivation process changes as you sort of move on to the next step. Thanks, Nigel. You know, obviously, we've had a really successful M&A year this last year in 24. It was kind of lumpy, honestly. We had a lot of deals that just came to fruition. Some of that is just typical of the way deals flow and when sellers are ready to go. So, you know, we continue to, you know, to see a really strong, you know, pipeline of deals that are out there.

Speaker Change: Steve maybe you can start with you I think you've been very involved in the M&A process flow core main gist.

Speaker Change: I'm wondering how thats a cultivation process changes as you sort of move on to the next steps.

Speaker Change: Thanks Nigel.

Speaker Change: <unk>.

Speaker Change: Obviously, we've had a really successful M&A year. This last year and 24. It was kind of lumpy honestly, we had a lot of deals that just came to fruition. Some of that is just typical of the way deals flow and when sellers are ready to go.

Speaker Change: So we continue to.

Speaker Change: See a really strong.

Speaker Change: Pipeline of deals that are out there.

Steve LeClair: You know, as I transitioned into this role, one of the things, you know, I've offered to help with Mark is any type of relationships that we have from an M&A standpoint. You know, I'll continue to be here as an executive chair and continue to support that, continue to work with him along those lines as he wants engagement from me on those, and I'll continue to help in that facility.

Speaker Change: <unk> transitioned into this role one of the things.

Speaker Change: <unk> offered to help with Mark as any type of relationships that we have from an M&A standpoint, we will continue to be here as an executive chair and continue to support that continue.

Speaker Change: Continue to work with them along those lines as he wants engagement for me on those and.

Speaker Change: I will continue to help in that.

Speaker Change: Facility.

Nigel Coe: Okay, great. Thanks, Steve.

Speaker Change: Okay, great. Thanks, and then just wanted to dig into the large project pipeline.

Nigel Coe: And then just want to dig into the large project pipeline. I think your large competitor, you know, talked about, you know, the acceleration, especially in some of the larger projects. So just wondering, you know, what you're seeing in both non-res, but also in municipal in terms of larger projects, you know, especially with some of this IIG funding that's starting to come through.

Speaker Change: I think your large competitor talked about the acceleration, especially in some of the larger projects. So I'm just wondering.

Speaker Change: What you're seeing in both non res, but also in municipal and some of the larger projects.

Speaker Change: Especially with some of this IAG funding some of that come through and I'm wondering on the larger projects does the margin profile change so.

Steve LeClair: And I'm wondering, you know, on the larger projects, does the margin profile change at all versus, you know, MRO? You know, what we've seen, I'll talk a little bit about some of the larger municipal projects out there, we're starting to see a lot of some of the flow down coming through from the IIJA funds, about half of them have been allocated into the states, and we're seeing about 10% of those now being allocated into specific projects. Those tend to be bigger long-term projects, they tend to be water and wastewater treatment projects, those fit right into our strike zone and the ability to leverage not only our local presence, but our national scale on that.

Speaker Change: Since MRO.

Speaker Change: What we've seen with the I'll talk a little bit about some of the larger municipal projects out there we're starting to see a lot of some of the slowdown coming through from the Iia funds about half of them and allocated into the states and we're seeing about 10% of those now being allocated into specific projects, but those tend to be bigger long term.

Speaker Change: They tend to be water and wastewater treatment projects those fit right into our strike zone.

Speaker Change: And the ability to leverage not only our local presence, but our national scale on that.

Steve LeClair: The bidding activity, when we get involved with these, particularly when we get involved right up front in these design-build applications, we tend to have a lot of opportunity there to help set some of the specifications, help coordinate some of the activity, and margins can be real positive for us in those, and can have a long tail of additional work that leads on the tails of those projects as well, too, when we get into some of the line work with those municipalities as well. So we're really encouraged by that, we're seeing some good traction in some of the large mega projects, you know, a lot of the data center projects out there, particularly with the land development that's happening, that involves a lot of storm drainage material, a lot of water, wastewater material as well, too, and so really well positioned for those as well.

Speaker Change: The bidding activity when we get involved with these particularly when we get involved right upfront in these design build applications, we tend to have a lot of.

Speaker Change: A lot of opportunity there to help set some of the specifications helped coordinate some of the activity and margins can be.

Speaker Change: A real positive for us in those and can have a long tail of additional work that leads on the tails of those projects as well too when we get into some of the line work with those municipalities as well. So we're really encouraged by that and we're seeing some good traction in some of the large mega projects and a lot of the data center projects out there, particularly with the <unk>.

Speaker Change: Land development Thats happening.

Speaker Change: While there's a lot of storm drainage material a lot of water wastewater material as well too and so really well positioned for those as well.

Nigel Coe: That's great colour, thank you.

Speaker Change: That's great color. Thank you.

Nigel Coe: Thank you.

Speaker Change: Thank you next.

Patrick Baumann: Our next question comes from Patrick Baumann of J.P. Morgan. Your line is now open, please go ahead. Oh, thanks. Hey, can you hear me? Yeah, we can. Hello? Oh, great. Okay.

Patrick Baumann: Next question comes from Patrick Baumann of Jpmorgan. Your line is now open. Please go ahead.

Speaker Change: Oh.

Patrick Baumann: Thanks, Hey can you hear me.

Speaker Change: Yes, we can.

Patrick Baumann: Well, congrats, Mark and Robyn on the new roles. I guess I just wanted to drill down a little bit with Steve. Maybe if you give any additional color on what made, you know, the timing, you know, right for this change. Obviously, I don't want to intrude too much, but I'm curious if you can give any other color. Yeah, thanks, Patrick. So I've been with the business 20 years and leading it for the last decade, and obviously I have a real passion for the business and the industry. And, you know, as I've gone through all the changes that we've gone through here, I'm just really proud of what the business has accomplished during that timeframe.

Speaker Change: Oh, great, Okay, well, congrats mark and Robyn on the new roles I guess I, just wanted to drill down a little bit with Steve.

Speaker Change: Maybe if you could give any additional color on what made the timing right for this change obviously don't want to.

Too much but curious if you can give any other color.

Speaker Change: Yes, Thanks Patrick.

Speaker Change: The business 20 years and leading it for the last decade, and obviously you have a real passion for the business in the industry.

Speaker Change: As I've gone through all the changes that we've gone through here just really proud of what the business has accomplished during that timeframe.

Steve LeClair: And, you know, when I look at all of the accomplishments we've had, the thing I'm really most proud of is really the talent that we've developed here. You know, we've had a special culture. I want to see that culture nurtured. I want to see it continue to evolve. And when I look at, you know, where we're positioned right now with the runway ahead of us, and I look at Mark and Robyn and our entire leadership team that we've had, just a real passion for the business. And it's the right time to make a transition for me, and it's the right time for this business.

Speaker Change: And when I look at all of the accomplishments we've had the thing I'm really most proud of is really the talent that we've developed here.

Speaker Change: <unk> got a special culture I want to see that culture nurture don't want to see it continue to evolve and when I look at where we're positioned right now with our runway ahead of us and I look at Mark and Rob and our entire leadership team that we've had just.

Speaker Change: Just a real passion for the business and it's the right time to make a transition.

Speaker Change: For me and it's the right time for this business and I wanted somebody that was really going to have the same level of passion for the industry. The passion for the associates and really the drive to take it to that next level and.

Steve LeClair: And, you know, I wanted somebody that was really going to have that same level of passion for the industry, the passion for the associates, and really the drive to take it to that next level. And, you know, I see that clearly with Mark, with Robyn and our executive team. You've seen some of the changes that we made even last year going into position our business for long term success with some of the additions that we made into our executive leadership team.

Speaker Change: That clearly was marked with Robin and our executive team <unk> seen some of the changes that we made even last year going into position our business for long term success with some of the.

Speaker Change: Additions that we made into our executive leadership team and this is all part of a real planned success.

Patrick Baumann: And, you know, this is all part of a real plan, successful succession plan, and real proud to be able to do that at this time. helpful caller. Thanks. And congrats.

Speaker Change: Successful succession plan and really proud to be able to do that at this time.

Speaker Change: Yes.

Speaker Change: Helpful color, Thanks, and congrats.

Mark Witkowski: A couple other quick ones. One on commodity product pricing outside of PVC. Are you seeing any suppliers reacting to, you know, recent moves and, you know, underlying commodities for the for the for those products? Maybe any color on that. And then separately on the SG&A side, any color? I mean, I guess I could try to do the math, but the SG&A growth for 25. How are you thinking about that relative to the two to 5% sales growth you're getting? Yeah, sure, Pat. First, you know, on the commodity product side, I would say for us, you know, that's primarily, you know, the steel pipe used in the fire protection product line portion of the business, and then, you know, copper pipe that we distribute into some of the, you know, goes into some of the service lines that we that we sell to.

Speaker Change: A couple of other quick ones.

Speaker Change: One on commodity product pricing outside of PVC.

Speaker Change: Are you seeing any suppliers reacting to.

Recent moves in.

Speaker Change: And in commodities.

Speaker Change: For the for those products, maybe any color on that and then.

Speaker Change: Separately on the SG&A side any.

Speaker Change: I mean, I guess I can.

Speaker Change: Do the math, but the SG&A growth for 25.

Speaker Change: About that relative to the 2% to 5% sales growth you're guiding.

Pat: Yes, sure Pat first.

Pat: The commodity product side I would say for us it's primarily the steel pipe used in fire protection product line portion of the business and then copper pipe.

Pat: We distribute into some of the.

Pat: It goes into some of the service lines that we.

Pat: That we sell to.

Mark Witkowski: You know, I would say on both of those categories, we're seeing more positive announcements. We've seen some good positive movement more recently in those categories. So, you know, viewing those as, you know, some potential upside for us. And, you know, like I said, on the non-commodity side, you know, we continue to see some price increases come through as well here early into 2025. So I would say on really all those fronts, it's been mostly positive in terms of the recent movement. What about ductile iron, ductile iron pipe? Ductile iron pipe, so that's municipal that we sell, you know, similar to municipal PVC pipe, I would say on ductile iron pipe, you know, we've seen good increases throughout 2024.

I would say on both of those categories. We are seeing more positive announcements we've seen some good positive movement.

Pat: More recently in those categories. So viewing those as some potential upside for us and like you said on the on the non commodity side, we continue to see some some price increases come through as well here early into 2025 so.

Pat: I would say in really all of those fronts. It's been mostly positive in terms of the recent movements.

Speaker Change: What about standpoints iron pipe.

Pat: Ductile iron pipe, so thats municipal.

Speaker Change: That we sell.

Pat: Similar to municipal PVC pipe I would say in ductile iron pipe.

Pat: We've seen good increases throughout 2024, and we expect that to be a very resilient product category moving forward.

Mark Witkowski: And, you know, we expect that to be a very resilient product category moving forward.

Pat: Thanks.

Mark Witkowski: You asked, too, on the SG&A... I'll answer Pat's question on SG&A for 2025, you know, as we think about, you know, the 15 basis points of EBITDA margin expansion, kind of at the midpoint, I'd say most of that we expect to come from, you know, the gross margin investments and initiatives that we have and guiding to a relatively, I'd say, flat SG&A for 2025. Okay. Thank you.

Pat: You asked two <unk>.

Pat: SG&A.

Pat: Okay.

Pat: I'll answer <unk> question on SG&A for 2025, as we think about.

Pat: The 15 basis points of EBITDA margin expansion kind of at the midpoint I would say most of that we expect to come from.

Pat: The gross margin.

Pat: Investments and initiatives that we have been guiding to a relatively I'd say flat SG&A for 2025.

Pat: Okay.

Pat: Thank you.

Mark Witkowski: Our next question comes from Mike Bell of RBC. Your line is now open. Please go ahead. Yeah, you know, I would tell you for non commodity, and, you know, the commodity buckets that we sell overall, we're expecting neutral. I mean, that's what we're going to provide in terms of the outlook. Overall, you can you can assume, you know, there's going to be puts and takes into some of those categories as we go forward. You know, I'd say from a tariff standpoint, you know, we've been closely monitoring that we're in regular discussions with all of our suppliers about how they're being impacted.

Pat: Next question comes from Mike Dahl of RBC.

Speaker Change: Please go ahead.

Speaker Change: Chris Kalata on for Mike.

Speaker Change: Just going back to the pricing.

Speaker Change: Outlook for this year.

Speaker Change: Specifically for.

Speaker Change: For non commodity price inflation.

Speaker Change: And when you're thinking about tariffs the conversations youre, having with suppliers is there any sense.

Speaker Change: You can provide on potential magnitude.

Speaker Change: Of tariff price increases, we could see this year and timing of that implementation.

Speaker Change: Yes, I would tell you for non commodity.

Speaker Change: In the commodity buckets that we sell overall were expecting neutral I mean, that's what we're going to provide in terms of the outlook. Overall, you can assume there's going to be puts and takes in to some of those.

Speaker Change: Categories as we go forward.

Speaker Change: From a tariff standpoint, we've been closely monitoring that we are in regular discussions with all of our suppliers about how they are being impacted but overall I would say.

Mark Witkowski: But overall, I would say, you know, the the import product in this sector is still relatively small, I'd say it's less than kind of 15% of the product category. So while there there can be some impact, you know, related to related to tariffs, where there are some import alternatives, we generally expect the overall impact there to be neutral to maybe slightly, slightly positive as we work through a lot of those dynamics. But you know, as you know, that's evolving, daily.

Speaker Change: The import product in this sector is still relatively small I would say, it's less than 15% of the product category. So while there can be some impact related to related to tariffs where there are some import alternatives. We generally expect the overall impact there to be neutral to maybe slightly.

Speaker Change: Slightly positive as we work through allowed those dynamics, but as you know thats evolving daily.

Mark Witkowski: And, you know, all we're focused on right now is close collaboration with our suppliers, and then early communication with our customers to make sure they're as clear as can be, and that we're being as transparent as we can on the potential impacts as we see them coming. Yeah, really no changes that we've seen going into 25. I mean, everything that we've seen, you know, we continue to gain share through this. You know, there's still, you know, a ton of opportunity out there for us in so many different markets. So really nothing that's, that's disrupted or changed the competitive environment.

Speaker Change: We're focused on right now is close collaboration with our suppliers and then.

Speaker Change: Early communication with our customers to make sure there is clear as can be.

And that we're being as transparent as we can on the potential impacts as we see them come in.

I appreciate that.

Speaker Change: Yeah.

Speaker Change: Is there any change in the competitive dynamics, you're seeing in your markets.

Speaker Change: How would you characterize.

Speaker Change: Any changes.

Speaker Change: <unk> seen year to date with a broader macro uncertainty.

Speaker Change: Yeah really no changes that we've seen going into 25, I mean everything that.

Speaker Change: What we've seen we continue to.

Speaker Change: To gain share through this.

Speaker Change: There is still.

Speaker Change: A ton of opportunity out there for us in so many different markets.

Speaker Change: So really nothing thats.

Speaker Change: Disrupted or change the competitive environment.

Speaker Change: Thank you.

Mark Witkowski: Thank you.

Speaker Change: Thank you. Our next question comes from Brian <unk>.

Brian Berros: Our next question comes from Brian Berros of Thompson Research Group. Your line is now open, please go ahead. Hey, good morning. Thank you for taking my questions. I guess further on the end market, your market outperformance and share gain expectations for this year, does that differ by end market at all? Maybe it's easier to take share in a slower market for Resi or easier in a good market like Municipal? I guess just wondering if there's any divergence there or difference to the historical trends given the outlook where we are today.

Speaker Change: Research group.

Speaker Change: Your line is now open. Please go ahead.

Speaker Change: Hey, good morning, and thank you for taking my questions I guess further on the end market.

Speaker Change: Your market outperformance and share gain expectations for this year does that differ by end market at all maybe it's easier to take share in a slower market for resi or easier in a market like municipal I guess, just wondering if there's any divergence there are different.

Speaker Change: Historical trends given the outlook, where we are today.

Speaker Change: Okay.

Mark Witkowski: Yeah, thanks for the question. You know, I would tell you, in terms of the outperformance, you know, we do expect that, you know, we've outperformed the market by a couple hundred basis points in 2024. I'd say it's generally similar across those end markets that we participate in. If I was going to weight it a little bit, I'd say we probably took a little bit more share on the municipal side, just given the strength of our, you know, smart meter performance and some of the success that we've had there. And then, you know, additionally, we saw some really good strength and growth by servicing treatment plants much better in 2024.

Speaker Change: Yes. Thanks for the question I would tell you in terms of the outperformance we do expect to.

Speaker Change: <unk> outperformed the market by a couple hundred basis points in 2024, I'd say, it's generally similar across those end markets that we participate in if that was going to wait a little bit I would say, we probably took a little bit more share on the municipal side, just given the strength of our.

Speaker Change: Smart meter.

Speaker Change: Performance in some of the success that we've had there and then.

Speaker Change: Additionally, we saw some really good strength and growth by servicing treatment plants much better in 2024.

Mark Witkowski: So I'd probably weight it a little bit more on the municipal side. But, you know, overall, you know, really good market performance across each of those end markets. Got it.

Speaker Change: Weighted a little bit more on the municipal side.

Speaker Change: Overall really good.

Speaker Change: Market performance across each of those end markets.

Speaker Change: Got it.

Mark Witkowski: And then maybe on the municipal side, or I guess really across the entire business, are you seeing any differences from the new administration on the ease of getting permitting or maybe just new projects going? I know rates aren't really helping on the financial part of the equation, but we have heard some things are getting easier or quicker out there when it comes to regulation type things, I guess. So just curious if you're seeing any of that across your business. Thank you. Yeah, Brian, we're hearing the potential for that, particularly the easing of some of the regulatory requirements for permitting.

Speaker Change: Maybe on the municipal side or I guess really across the entire business are you seeing any differences from the new administration on the ease of getting permitting or maybe you can just new projects going.

Speaker Change: It's not really helping on the financial part of the equation, but we have heard some things are getting easier or quicker out there. When it comes to regulation type things I guess I'm. Just curious have you seen any of that across your business. Thank you.

Speaker Change: Yeah.

Speaker Change: Yes, Brian we're hearing the potential for that particularly the easing of some of the regulatory requirements for permitting but but I can't tell you I have got some real specific examples where that's happening just yet so it's probably a little early to tell.

Mark Witkowski: But, but I can't tell you, I've got some real specific examples where that's happening just yet. So it's probably a little early to tell. But it does seem encouraging that we could see some acceleration of that in terms of the regulatory ease of getting some of the particularly the non residential construction up and running. Thank you.

Speaker Change: But it does seem encouraging that we could see some acceleration of that in terms of the regulatory ease of some of the particularly the nonresidential construction up and running.

Speaker Change: Yes.

Speaker Change: Okay. Thank you.

Mark Witkowski: Thank you and I'll hand it back to Mark Witkowski for any further remarks. Thank you again for joining us today. We are pleased to achieve another record sales year for Core & Main, marking our 15th consecutive year of growth. The long-term underlying trends of our end markets are strong and our products and services play a critical role in advancing reliable infrastructure. We expect to continue outperforming our end markets, even as the broader economic environment evolves. Our business is well positioned to capitalize on opportunities for growth, and we remain committed to building on our track record of delivering exceptional value to our shareholders.

Speaker Change: Thank you and I'll hand, it back to Marc what koski for any further remarks.

Speaker Change: Thank you again for joining us today we.

Speaker Change: We are pleased to achieve another record sales year for corn main <unk>.

Speaker Change: <unk>, our 15th consecutive year of growth for.

Speaker Change: The long term underlying trends of our end markets are strong and our products and services play a critical role in advancing reliable infrastructure.

Speaker Change: We expect to continue outperforming our end markets, even as the broader economic environment evolves, our business is well positioned to capitalize on opportunities for growth and we remain committed to building on our track record of delivering exceptional value to our shareholders.

Mark Witkowski: Thank you for your interest in Core & Main.

Speaker Change: Thank you for your interest in corn main operator that concludes our call.

Alex: Operator, that concludes our call. Thank you all for joining today's call.

Speaker Change: Thank you all for joining today's call you may now disconnect your lines.

Alex: You may now disconnect your lines.

Speaker Change: Yes.