Q1 2025 SiteOne Landscape Supply Inc Earnings Call

April 30, 2025

Following the formal presentation.

Unknown Attendee: A question and answer session will follow the formal presentation.

Operator: A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, John Guthrie, Executive Vice President and Chief Financial Officer. Thank you, Mr. Guthrie. You may begin.

If anyone should require operator assistance during the conference. Please press star zero from your telephone keypad.

Unknown Attendee: If anyone should require operator assistance during the conference, please press star zero from your telephone keypad.

As a reminder, this conference is being recorded.

Unknown Attendee: As a reminder, this conference is being recorded.

Speaker Change: It's now my pleasure to introduce your host John Guthrie, Executive Vice President and Chief Financial Officer.

John Guthrie: It's now my pleasure to introduce your host, John Guthrie, Executive Vice President and Chief Financial Officer.

Speaker Change: Thank you Mr. Guthrie you may begin.

Unknown Attendee: Thank you, Mr. Guthrie.

Unknown Attendee: You may begin. Thank you and good morning everyone.

John Guthrie: Thank you and good morning, everyone. We issued our first quarter 2025 earnings press release, this morning, and posted a slide presentation to the Investor relations portion of our website at investors that type one dot com.

John Guthrie: Thank you and good morning, everyone. We issued our Q1 2025 earnings press release this morning and posted a slide presentation to the Investor Relations portion of our website at investors.siteone.com. I'm joined today by Doug Black, our Chairman and Chief Executive Officer, and Scott Salmon, Executive Vice President, Strategy and Development. Before we begin, I would like to remind everyone that today's press release, slide presentation, and the statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 the earnings release and in our filings with the Securities and Exchange Commission.

John Guthrie: We issued our first quarter 2025 earnings press release this morning and posted a slide presentation to the investor relations portion of our website at investors.siteone.com I'm joined today by Doug Black, our Chairman and Chief Executive Officer, and Scott Salmon, Executive Vice President, Strategy and Development.

John Guthrie: I am joined today by Doug Black, our chairman and Chief Executive Officer, and Scott Salmon Executive Vice President strategy and development.

John Guthrie: Before we begin I would like to remind everyone that today's press release slide presentation and the statements made during this call include forward looking statements within the meaning of the private Securities Litigation Reform Act of $19 95.

John Guthrie: Before we begin, I would like to remind everyone that today's press release, slide presentation, and the statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

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

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

John Guthrie: Additionally, during today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance.

John Guthrie: Additionally, during today's call, we'll discuss non-GAAP measures, which we believe can be useful in evaluating our performance. A reconciliation of these measures can be found in our earnings release and in the slide presentation. I would now like to turn the call over to Doug Black.

John Guthrie: A reconciliation of these measures can be found in our earnings release and in the slide presentation.

I would now like to turn the call over to Doug Black.

John Guthrie: I would now like to turn the call over to Doug Black.

Doug Black: Thanks, John.

Doug Black: Good morning, and thank you for joining us today.

Doug Black: Thanks, John.

Doug Black: Thanks, John. Good morning, and thank you for joining us today. We are pleased to achieve a solid start to 2025 with 4% net sales growth and 6% growth in Adjusted EBITDA during the traditionally slower Q1. Despite the challenging weather and later spring season than last year, our teams executed well, and we benefited from our strong cost control actions in 2024. We also benefited from the continued moderation of price deflation as our overall price decline improved from -3% in the Q4 of 2024 to -1% in the Q1 of this year. Finally, we continued to execute our acquisition strategy by adding two excellent companies to SiteOne year to date, strengthening our teams, and further expanding our full product line capability.

Doug Black: Good morning, and thank you for joining us today. We are pleased to achieve a solid start to 2025 with 4% net sales growth and 6% growth in adjusted EBDA during the traditionally slower first quarter. Despite the challenging weather and later spring season than last year, our teams executed well and we benefited from our strong cost control actions in 2024. We also benefited from the continued moderation of price deflation as our overall price decline improved from negative 3% in the fourth quarter of 2024 to negative 1% in the first quarter of this year. Finally, we continue to execute our acquisition strategy by adding two excellent companies to SiteOne year-to-date.

Doug Black: We were pleased to achieve a solid start to 2025 with 4% net sales growth and 6% growth in adjusted EBITDA during the traditionally slower first quarter.

Doug Black: Despite the challenging weather and later spring season than last year, our teams executed well and we benefited from our strong cost control actions in 2024.

Doug Black: We also benefited from the continued moderation of price deflation.

Doug Black: As our overall price decline improved from negative 3% in the fourth quarter of 2024 to negative 1% in the first quarter of this year.

Doug Black: Finally, we continued to execute our acquisition strategy by adding two excellent companies.

Doug Black: One year to date.

Doug Black: Strengthening our teams and further expanding our full product line capability.

Doug Black: Strengthening our teams and further expanding our full product line capabilities.

Doug Black: Overall with strong teams, a winning strategy and excellent execution of our commercial and operational initiatives.

Doug Black: Overall, with strong teams, a winning strategy, and excellent execution of our commercial and operational initiatives, we continue to be in a good position to navigate through the market uncertainties and deliver solid performance and growth in 2025 and over the coming years. I will start today's call with a brief overview of our unique market position and our strategy, followed by some highlights from the quarter. John Guthrie will then walk you through our Q1 financial results in more detail and provide an update on our balance sheet and liquidity position. Scott Salmon will discuss our acquisition strategy, and then I will come back and address our latest outlook before taking your questions. As shown on slide 4 of the earnings presentation, we have a strong footprint of more than 690 branches and 4 distribution centers across 45 US states and 6 Canadian provinces.

Doug Black: We continue to be in a good position to navigate through the market uncertainties and deliver solid performance and growth in 2025 and over the coming years.

Doug Black: I will start today's call with a brief overview of our unique market position and our strategy followed by some highlights from the quarter.

Doug Black: I will start today's call with a brief overview of our unique market position and our strategy, followed by some highlights from the quarter. John Guthrie will then walk you through our first quarter financial results in more detail and provide an update on our balance sheet and liquidity position.

Doug Black: John Guthrie will then walk you through our first quarter financial results in more detail.

Doug Black: And provide an update on our balance sheet and liquidity position.

Doug Black: Scott Solomon will discuss our acquisition strategy and then I will come back and address our latest outlook before taking your questions.

Doug Black: Scott Salmon will discuss our acquisition strategy, and then I will come back and address our latest outlook before taking your questions. As shown on slide four of the earnings presentation, we have a strong footprint of more than 690 branches and four distribution centers across 45 U.S. states and six Canadian provinces. We are the clear industry leader, over three times the size of our nearest competitor, and larger than 2 through 10 combined. Yet we estimate that we only have about an 18 percent share of the very fragmented 25 billion wholesale landscaping products distribution market. Accordingly, our long term opportunity to grow and gain market share remains significant.

Scott Solomon: As shown on slide four of the earnings presentation, we have a strong footprint.

Scott Solomon: More than 690 branches and four distribution centers across 45 U S States and six Canadian provinces.

Scott Solomon: We are the clear industry leader over three times the size of our nearest competitor and larger than two through 10 combined.

Doug Black: We are the clear industry leader, over three times the size of our nearest competitor, and larger than 2 through 10 combined. Yet we estimate that we only have about an 18% share of the very fragmented $25 billion wholesale landscaping products distribution market. Accordingly, our long-term opportunity to grow and gain market share remains significant. We have a balanced mix of business with 65% focused on maintenance, repair, and upgrade, 21% focused on new residential construction, and 14% on new commercial and recreational construction. As the only national full product line wholesale distributor in the market, we also have an excellent balance across our product lines as well as geographically. Our strategy to fill in our product lines across the US and Canada, both organically and through acquisition, further strengthens this balance over time.

Scott Solomon: We estimate that we only have about an 18% share of the very fragmented 25 billion wholesale landscaping products distribution market.

Scott Solomon: Accordingly, our long term opportunity to grow and gain market share remains significant.

Scott Solomon: We have a balanced mix of business with 65% focused on maintenance repair and upgrade.

Doug Black: We have a balanced mix of business with 65% focused on maintenance, repair and upgrade. 21% focused on new residential construction and 14% on new commercial and recreational construction. As the only national full product line wholesale distributor in the market, we also have an excellent balance across our product lines as well as geographic. Our strategy to fill in our product lines across the U.S. and Canada, both organically and through acquisition, further strengthens this balance over time. Overall, our end market mix, broad product portfolio, and geographic coverage offer us multiple avenues to grow and create value for our customers and suppliers, while providing important resilience in softer markets.

Scott Solomon: 21% focused on new residential construction and 14% on new commercial and recreational construction.

Scott Solomon: As the only national full product line wholesale distributor in the market. We also have an excellent balance across our product lines as well as geographically.

Scott Solomon: Our strategy to fill in our product lines across the U S and Canada, both organically and through acquisition further strengthens this balance over time.

Scott Solomon: Overall, our end market mix broad product portfolio and geographic coverage offer us multiple avenues to grow and create value for our customers and suppliers, while providing important brazilians and softer markets.

Doug Black: Overall, our end-market mix, broad product portfolio, and geographic coverage offer us multiple avenues to grow and create value for our customers and suppliers while providing important resilience in softer markets. Turning to slide five, our strategy is to leverage the scale, resources, functional talent, and capabilities that we have as the largest company in our industry, all in support of our talented, experienced, and entrepreneurial local teams to consistently deliver superior value to our customers and suppliers. We have come a long way in building SiteOne and executing our strategy, but we have more work to do as we develop into a truly world-class company. In the current challenging market environment, we are adopting new processes and technologies faster, driving organic growth, improving our productivity, and mastering the unique aspects of each of our product lines.

Scott Solomon: Turning to slide five our strategy is to leverage the scale resources.

Doug Black: Turning to slide five, our strategy is to leverage the scale, resources, functional talent, and capabilities that we have as the largest company in our industry, all in support of our talented, experienced, and entrepreneurial local teams to consistently deliver superior value to our customers and suppliers. We've come a long way in building SiteOne and executing our strategy, but we have more work to do as we develop into a truly world-class company. In the current challenging market environment, we are adopting new processes and technologies faster. driving organic growth, improving our productivity, and mastering the unique aspects of each of our product lines.

Scott Solomon: Functional talent and capabilities that we have as the largest company in our industry.

Scott Solomon: All in support of our talented experienced and entrepreneurial local teams to consistently deliver superior value to our customers and suppliers.

Scott Solomon: We've come a long way in building site, one in executing our strategy, but we have more work to do as we develop into a truly world class company.

Scott Solomon: In the current challenging market environment, we are adopting new processes and technologies faster.

Scott Solomon: Driving organic growth, improving our productivity and mastering the unique aspects of each of our product lines.

Scott Solomon: Accordingly, we remain highly focused on our commercial and operational initiatives to overcome the near term headwinds, but more importantly to build a long term competitive advantage for all our stakeholders.

Doug Black: Accordingly, we remain highly focused on our commercial and operational initiatives to overcome the near term headwinds, but more importantly, to build a long term competitive advantage for all our stakeholders. These initiatives are complemented by our acquisition strategy, which fills in our product portfolio, moves us into new geographic markets, and adds terrific new talent to SiteOne. Taken all together, we believe our strategy creates superior value for our shareholders through organic growth, acquisition growth, and EBITDA margin expansion.

Doug Black: Accordingly, we remain highly focused on our commercial and operational initiatives to overcome the near-term headwinds, but more importantly, to build a long-term competitive advantage for all our stakeholders. These initiatives are complemented by our acquisition strategy, which fills in our product portfolio, moves us into new geographic markets, and adds terrific new talent to SiteOne. Taken all together, we believe our strategy creates superior value for our shareholders through organic growth, acquisition growth, and EBITDA margin expansion. On slide six, you can see our strong track record of performance and growth over the last eight years. From an Adjusted EBITDA margin perspective, we benefited from extraordinary price realization due to rapid inflation in commodity products during 2021 and 2022. In 2023 and 2024, we experienced significant headwinds as those commodity prices have come down.

Scott Solomon: These initiatives are complemented by our acquisition strategy, which fills in our product portfolio moves us into new geographic markets and adds terrific new talent to <unk>.

Scott Solomon: Taken altogether, we believe our strategy creates superior value for our shareholders through organic growth acquisition growth and EBITDA margin expansion.

Scott Solomon: On slide six you can see our strong track record of performance and growth over the last eight years.

Doug Black: On slide six, you can see our strong track record of performance and growth over the last eight years. From an adjusted EBITDA margin perspective, we benefited from extraordinary price realization due to rapid inflation in commodity products during 2021 and 2022. In 2023 and 2024, we experienced significant headwinds as those commodity prices have come down. 2024 we also experienced further adjusted EVDA dilution from the acquisition of Pioneer, a large turnaround opportunity with great strategic fit. and from our other focus branches as a result of the post COVID market headwind. We are continuing to evaluate the potential impact of recently announced tariffs, but now expect pricing to go from a strong headwind in 2024 to a slight tailwind in 2025, driven by price increases from our suppliers.

Scott Solomon: And adjusted EBITDA margin perspective, we benefited from extraordinary price realization due to rapid inflation in commodity products during 2021 and 2022.

Scott Solomon: In 2023, and 2024, we experienced significant headwinds as those commodity prices have come down.

Scott Solomon: 2024, we also experienced further adjusted EBITDA dilution from the acquisition of pioneer a large turnaround opportunity with great strategic fit.

Doug Black: In 2024, we also experienced further Adjusted EBITDA dilution from the acquisition of Pioneer, a large turnaround opportunity with great strategic fit, and from our other focus branches as a result of the post-COVID market headwinds. We are continuing to evaluate the potential impact of recently announced tariffs, but now expect pricing to go from a strong headwind in 2024 to a slight tailwind in 2025, driven by price increases from our suppliers. Furthermore, with Pioneer's systems fully integrated and operations restructured under new local management and with progress on our focus branches, we expect to achieve solid performance improvement in 2025 that is not reliant on market growth. We are pleased to have completed our 100th acquisition in March, with over $2 billion in acquired revenue added since the start of 2014. These milestones demonstrate the strength and durability of our acquisition strategy.

Scott Solomon: And from our other focused branches as a result of the post COVID-19 market headwinds.

We are continuing to evaluate the potential impact of recently announced tariffs, but now expect pricing to go from a strong headwind in 2024 to a slight tailwind in 2025, driven by price increases from our suppliers.

Scott Solomon: Furthermore, with pioneers systems fully integrated and operations restructured under new local management and with progress on our focused branches. We expect to achieve solid performance improvement in 2025 that is not reliant on market growth.

Doug Black: Furthermore, with Pioneer systems fully integrated, and operations restructured under new local management, and with progress on our focus branches, we expect to achieve solid performance improvement in 2025 that is not reliant on market growth. We are pleased to have completed our 100th acquisition in March, with over $2 billion in acquired revenue added since the start of 2014. These milestones demonstrate the strength and durability of our acquisition strategy. Our pipeline of potential deals remains robust, and we expect to continue adding more companies in 2025 to support our growth. These companies strengthen SiteOne with excellent talent and new ideas for performance and growth.

Scott Solomon: We are pleased to have completed our 100th acquisition in March with over $2 billion in acquired revenue added since the start of 2014.

These milestones demonstrate the strength and durability of our acquisition strategy.

Scott Solomon: Our pipeline of potential deals remains robust and we expect to continue adding more companies in 2025 to support our growth.

Doug Black: Our pipeline of potential deals remains robust, and we expect to continue adding more companies in 2025 to support our growth. These companies strengthen SiteOne with excellent talent and new ideas for performance and growth. Given the fragmented nature of our industry and our modest market share, we have a significant opportunity to continue growing through acquisition for many years to come. Slide 7 shows the long runway we have ahead in filling in our product portfolio, which we aim to do primarily through acquisition, especially in nursery, hardscapes, and landscape supplies categories. We are well connected with the best companies in our industry, and we expect to continue filling in these markets systematically over the next decade. I will now discuss some of the Q1 highlights as shown on Slide 8.

Scott Solomon: These companies strength insight, one with excellent talent and new ideas for performance and growth.

Scott Solomon: Given the fragmented nature of our industry and our modest market share we have a significant opportunity to continue growing through acquisition for many years to come.

Doug Black: Given the fragmented nature of our industry and our modest market share, we have a significant opportunity to continue growing through acquisition for many years to come. Slide 7 shows the long runway we have ahead in filling in our product portfolio, which we aim to do primarily through acquisition, especially in the nursery, hardscapes, and landscape supplies categories. We are well connected with the best companies in our industry and we expect to continue filling in these markets systematically over the next decade.

Scott Solomon: Slide seven shows the long runway, we have ahead and filling in our product portfolio, which we aim to do primarily through acquisition, especially in nursery hardscape and landscape supplies categories.

Scott Solomon: We are well connected with the best companies in our industry and we expect to continue filling in these markets systematically over the next decade.

Scott Solomon: I will now discuss some of the first quarter highlights as shown on slide eight.

Doug Black: I will now discuss some of the first quarter highlights as shown on slide 8. We achieved 4% net sales growth in the first quarter, with an organic daily sales decline of 1%. offset by 5% growth due to acquisition. Organic sales volume was flat during the first quarter, which we see as a good result, given the early spring season and 5% volume growth that we experienced in the first quarter of last year. Weather this year has been challenging, but our volume growth turned positive in March and that momentum has continued into April. We believe that we are outperforming the market consistently through our commercial initiatives, and our end markets, though softer, have remained resilient.

Scott Solomon: We achieved 4% net sales growth in the first quarter with an organic daily sales decline of 1%.

Doug Black: We achieved 4% net sales growth in Q1 with an organic daily sales decline of 1%, offset by 5% growth due to acquisitions. Organic sales volume was flat during Q1, which we see as a good result given the early spring season and 5% volume growth that we experienced in Q1 of last year. Weather this year has been challenging, but our volume growth turned positive in March, and that momentum has continued into April. We believe that we are outperforming the market consistently through our commercial initiatives, and our end markets, though softer, have remained resilient.

Scott Solomon: Offset by 5% growth due to acquisitions.

Scott Solomon: Organic sales volume was flat during the first quarter, which we see as a good result, given the early spring season in 5% volume growth that we experienced in the first quarter of last year.

Scott Solomon: Whether this year has been challenging but our volume growth turned positive in March and that momentum has continued into April.

Scott Solomon: We believe that we are outperforming the market consistently through our commercial initiatives and our end markets. Those softer have remained resilient.

Scott Solomon: Additionally, as I mentioned pricing was only down 1% in the first quarter and.

Doug Black: Additionally, as I mentioned, pricing was only down 1% in the first quarter, and we expect this to flatten out and turn positive during the remainder of the year, as price declines in PVC pipe and grass seed are more than offset by price increases in our other products. Gross profit increased 3% driven by our acquisitions, while our gross margin decreased by 30 basis points to 33% due to lower price realization and higher freight costs more than offsetting gains from our gross margin improvement initiative. Note that the higher freight was partially due to early purchases of inventory into our distribution centers in anticipation of tariff-driven price increases.

Doug Black: Additionally, as I mentioned, pricing was only down 1% in Q1, and we expect this to flatten out and turn positive during the remainder of the year as price declines in PVC pipe and grass seed are more than offset by price increases in our other products. Gross profit increased 3% driven by our acquisitions, while our gross margin decreased by 30 basis points to 33% due to lower price realization and higher freight cost, more than offsetting gains from our gross margin improvement initiatives. Note that the higher freight was partially due to early purchases of inventory into our distribution centers in anticipation of tariff-driven price increases. Our acquisitions, which were primarily nursery and hardscapes businesses, operated a higher gross margin but also operate with higher SG&A.

Scott Solomon: And we expect this to flatten out and turn positive during the remainder of the year.

Scott Solomon: As price declines in PVC pipe and grass seed.

Scott Solomon: Our more than offset by price increases and our other products.

Scott Solomon: Gross profit increased 3% driven by our acquisitions, while our gross margin decreased by 30 basis points to 33% due to lower price realization and higher freight costs more than offsetting gains from our gross margin improvement initiatives.

Scott Solomon: Note that the higher freight was partially due to early purchases of inventory into our distribution centers and anticipation of tariff driven price increases.

Scott Solomon: Our acquisitions, which were primarily a nursery and hardscape businesses operate at a higher gross margin, but also operate with higher SG&A.

Doug Black: Our acquisitions, which were primarily nursery and hardscape businesses, operate at a higher gross margin, but also operate with higher SG&A. Our SG&A as a percentage of net sales increased 30 basis points to 36.5% due to our acquisitions which have a larger effect on the traditionally low revenue first quarter. SG&A for the base business was down 3% as we realized the benefits of cost control actions taken in 2024. including those with Pioneer and our focus branch. We expect to achieve solid SG&A leverage on an adjusted basis in 2025, even with modest organic growth. Adjusted EBDA for the quarter increased 6% to $22.4 million and adjusted EBDA margin improved 10 basis points to 2.4% due to higher net sales and improved SG&A leverage partially offset by the absence of price realization and the dilutive effect of acquisitions.

Scott Solomon: Our SG&A as a percentage of net sales increased 30 basis points to 36, 5% due to our acquisitions, which have a larger effect on the traditionally low revenue first quarter.

Doug Black: Our SG&A, as a percentage of net sales, increased 30 basis points to 36.5% due to our acquisitions, which have a larger effect on the traditionally low revenue first quarter. SG&A for the base business was down 3% as we realized the benefits of cost control actions taken in 2024, including those with Pioneer and our focus branches. We expect to achieve solid SG&A leverage on an adjusted basis in 2025, even with modest organic growth. Adjusted EBITDA for the quarter increased 6% to $22.4 million, and adjusted EBITDA margin improved 10 basis points to 2.4% due to higher net sales and improved SG&A leverage, partially offset by the absence of price realization and the dilutive effect of acquisitions. In terms of initiatives, we are executing specific actions to improve our customer excellence, accelerate organic growth, expand gross margin, and increase SG&A leverage.

Scott Solomon: SG&A for the base business was down 3% as we realized the benefits of cost control actions taken in 2024 <unk>.

Scott Solomon: Including those with pioneer and our focused branch.

Scott Solomon: We expect to achieve solid SG&A leverage on an adjusted basis in 2025, even with modest organic growth.

Scott Solomon: Adjusted EBITDA for the quarter increased 6% to $22 4 million and.

Scott Solomon: And adjusted EBITDA margin improved 10 basis points to two 4% due to higher net sales and improved SG&A leverage partially offset by the absence of price realization and the dilutive effect of acquisitions.

Scott Solomon: In terms of initiatives, we are executing specific actions to improve our customer excellence accelerate organic growth expand gross margin and increased SG&A leverage.

Doug Black: In terms of initiatives, we are executing specific actions to improve our customer excellence, accelerate organic growth, expand gross margin, and increase SG&A leverage. For gross margin improvement, we continue to increase sales with our small customers faster than our company average, drive growth in our private label brands, and improve inbound freight costs through our transportation management system. These initiatives not only improve our gross margin, but also add to our organic growth as we gain market share in the small customer segment, as well as across product lines with our competitive private label products like ProTrade, Solstice Stone, and Portfolio.

Scott Solomon: Our gross margin improvement, we continue to increase sales with our small customers faster than our company average.

Doug Black: For gross margin improvement, we continue to increase sales with our small customers faster than our company average, drive growth in our private label brands, and improve inbound freight costs through our transportation management system. These initiatives not only improve our gross margin but also add to our organic growth as we gain market share in the small customer segment as well as across product lines with our competitive private label products like Pro-Trade, Solstice Stone, and Portfolio. Collectively, these three brands grew 30% in Q1. To further drive organic growth, we continue to increase our percentage of bilingual branches from 63% to 65% during Q1 and are executing Hispanic marketing programs to create awareness among this important customer segment.

Scott Solomon: Drive growth in our private label brands and improve inbound freight costs through our transportation management system.

Scott Solomon: These initiatives not only improve our gross margin, but also add to our organic growth as we gained market share in the small customer segment as well as across product lines with our competitive private label products like pro trade solstice stone and portfolio.

Scott Solomon: Collectively these three brands grew 30% in the first quarter.

Doug Black: Collectively, these three brands grew 30% in the first quarter. To further drive organic growth, we continue to increase our percentage of bilingual branches from 63% to 65% during the first quarter and are executing Hispanic marketing programs to create awareness among this important customer segment. We're also making great progress with our salesforce productivity as we leverage our CRM and establish more disciplined revenue-generating habits and processes among our inside sales associates and over 580 outside sales associates. Our outside sales force is covering approximately 10% more revenue this year than in 2024. with no additional headcount allowing us to economically achieve higher organic sales growth.

Scott Solomon: To further drive organic growth, we continued to increase our percentage of bilingual branches from 63% to 65% during the first quarter and are executing Hispanic marketing programs to create awareness among this important customer segment.

Scott Solomon: We're also making great progress with our sales force productivity as we leverage our CRM and establish more disciplined revenue generating habits and processes among our inside sales associates and over 580 outside sales associates.

Doug Black: We are also making great progress with our Salesforce productivity as we leverage our CRM and establish more disciplined revenue-generating habits and processes among our inside sales associates and over 580 outside sales associates. Our outside Salesforce is covering approximately 10% more revenue this year than in 2024 with no additional headcount, allowing us to economically achieve higher organic sales growth. Our digital initiative with SiteOne.com is also helping us to drive organic daily sales growth as customers who are engaged with us digitally grow significantly faster than those who are not. We grew our digital sales by 140% in Q1 on top of the 180% growth achieved in 2024. We continue to cultivate thousands of new regular users of SiteOne.com, helping customers to be more efficient and helping us to increase market share while making our associates more productive. A true win-win-win.

Scott Solomon: Our outside sales force is covering approximately 10% more revenue this year than in 2024.

Scott Solomon: With no additional head count, allowing us to economically achieve higher organic sales growth.

Scott Solomon: Our digital initiative with site, one dot com also helping us to drive organic daily sales growth.

Doug Black: Our digital initiative with SiteOne.com is also helping us to drive organic daily sales growth as customers who are engaged with us digitally grow significantly faster than those who are not. We grew our digital sales by 140% in the first quarter, on top of the 180% growth achieved in 2024. We continue to cultivate thousands of new regular users of SiteOne.com, helping customers to be more efficient and helping us to increase market share while making our associates more productive. A true win-win-win. Through SiteOne.com and our other digital tools, we are accelerating organic growth and we believe outperforming the market.

Scott Solomon: As customers, who are engaged with us digitally.

Scott Solomon: Rose significantly faster than those who are not.

Scott Solomon: We grew our digital sales by 140% in the first quarter on top of the 180% growth achieved in 2024.

Scott Solomon: We continue to cultivate thousands of new regular users of Cy, one dot com, helping customers to be more efficient and helping us to increase market share, while making our associates more productive a true win win win.

Besides one dot com and our other digital tools.

Doug Black: Through SiteOne.com and our other digital tools, we are accelerating organic growth, and we believe outperforming the market. With the benefit of DispatchTrack, which allows us to more closely manage our customer delivery, we are now able to improve both associate and equipment efficiency in our customer delivery operations. We believe that we can significantly lower our delivery expense while improving the experience for our customers. This is a major initiative, and we expect to make significant progress this year and the next two to three years. Last year, we mentioned that we are intensely managing our underperforming branches or focus branches to ensure that they have the right teams, the right support, and are executing our best practices to bring their performance up to or above the SiteOne average.

Scott Solomon: Our accelerating organic growth and we believe outperforming the market.

Scott Solomon: The benefit of dispatch track, which allows us to more closely manage our customer delivery.

Doug Black: The benefit of DispatchTrack, which allows us to more closely manage our customer delivery, we are now able to improve both associate and equipment efficiency in our customer delivery operations. We believe that we can significantly lower our delivery expense while improving the experience for our customers. This is a major initiative and we expect to make significant progress this year and the next two to three years.

Scott Solomon: We are now able to improve both associate and equipment efficiency and our customer delivery operations.

Scott Solomon: We believe that we can significantly lower our delivery expense, while improving the experience for our customers.

Scott Solomon: This is a major initiative and we expect to make significant progress this year and the next two to three years.

Scott Solomon: Last year, we mentioned that we are intensely managing our underperforming branches are focused branches to ensure that they have the right teams the right support.

Doug Black: Last year we mentioned that we are intensely managing our underperforming branches, or focus branches, to ensure that they have the right teams, the right support, and are executing our best practices to bring their performance up to or above the SiteOne average. As a part of these aggressive efforts, we consolidated or closed 22 locations in 2024. to strengthen our operations and better serve our customers at a reduced cost. In the first quarter we achieved good progress with our focus branches and we expect to gain a meaningful adjusted EBDA margin lift for SiteOne in the coming years as we improve the performance of these branches.

Scott Solomon: And are executing our best practices to bring their performance up to or above the site one average.

Scott Solomon: As a part of these aggressive efforts, we consolidated or closed 22 locations in 2024.

Doug Black: As a part of these aggressive efforts, we consolidated or closed 22 locations in 2024 to strengthen our operations and better serve our customers at a reduced cost. In Q1, we achieved good progress with our focus branches, and we expect to gain a meaningful Adjusted EBITDA margin lift for SiteOne in the coming years as we improve the performance of these branches. Taken all together, we are continuing to improve our capability to drive organic growth, increase Gross Margin, and achieve operating leverage through our initiatives. On the acquisition front, as I mentioned, we added two excellent companies to our family since the beginning of the year, with $20 million and trailing 12-month sales added to SiteOne. We are having conversations with a lot of companies, but many are focused on managing the current market uncertainties, and we are being careful given the unclear economic outlook.

Scott Solomon: To strengthen our operations and better serve our customers at a reduced cost.

In the first quarter, we achieved good progress with our focused branches and we expect to gain a meaningful adjusted EBITDA margin lift for site one in the coming years as we improve the performance of these branches.

Scott Solomon: Taken altogether, we are continuing to prove our capability to drive organic growth increased gross margin and achieve operating leverage through our initiatives.

Doug Black: Taken all together, we are continuing to improve our capability to drive organic growth, increase gross margin, and achieve operating leverage through our initiatives. On the acquisition front, as I mentioned, we added two excellent companies to our family since the beginning of the year, with $20 million and trailing 12-month sales added to SiteOne. We are having conversations with a lot of companies, but many are focused on managing the current market uncertainties, and we are being careful, given the unclear economic outlook. Accordingly, 2025 may be a lighter than normal year in terms of acquired revenue, even as we aggressively cultivate key targets for future years.

Scott Solomon: On the acquisition front as I mentioned, we added two excellent companies to our family since the beginning of the year with $20 million in trailing 12 month sales added decided one.

Scott Solomon: We are having conversations with a lot of companies, but many are focused on managing the current market uncertainties and we're being careful given the unclear economic outlook.

Scott Solomon: Accordingly, 2025, maybe a lighter than normal year in terms of acquired revenue, even as we aggressively cultivate key targets for future years.

Doug Black: Accordingly, 2025 may be a lighter than normal year in terms of acquired revenue, even as we aggressively cultivate key targets for future years. Short-term challenges aside, we remain well-positioned to grow consistently through acquisition for many years with an experienced acquisition team, broad and deep relationships with the best companies in the industry, a strong balance sheet, and an exceptional reputation for being a great long-term home for companies in our industry. In summary, our teams are doing a good job of managing through the near-term market environment, leveraging our many opportunities for improvement, prudently adding new companies to SiteOne through acquisition, and building our company for the long term. Now, John will walk you through the quarter in more detail. John? Thanks, Doug. I'll begin on slide nine with some highlights from our Q1 results.

Scott Solomon: Short term challenges aside we remain well positioned to grow consistently through acquisition for many years with an experienced acquisition team broad and deep relationships with the best companies in the industry.

Doug Black: Short-term challenges aside, we remain well-positioned to grow consistently through acquisition for many years with an experienced acquisition team, broad and deep relationships with the best companies in the industry, a strong balance sheet, and an exceptional reputation for being a great long-term home for companies in our industry.

Scott Solomon: <unk> balance sheet, and an exceptional reputation for being a great long term home for companies in our industry.

Scott Solomon: In summary, our teams are doing a good job of managing through the near term market environment.

Doug Black: In summary, our teams are doing a good job of managing through the near-term market environment, leveraging our many opportunities for improvement. prudently adding new companies to SiteOne through acquisition and building our company for the long term.

Scott Solomon: Leveraging our many opportunities for improvement.

Scott Solomon: Prudently, adding new companies to cite one through acquisition and building our company for the long term.

Scott Solomon: Now John will walk you through the quarter in more detail John.

John Guthrie: Now, John will walk you through the quarter in more detail. Thanks, Doug. I'll begin on slide nine with some highlights from our first quarter results. There were 64 selling days in the first quarter, which is the same as the prior year period. Organic daily sales decreased 1% in the first quarter compared to the prior year due to colder weather, which resulted in a later start to the spring selling season, a softer repair and remodel and market, and lower prices for commodity products. Overall, we saw flat volume and 1% price deflation. Price deflation continues to be driven by commodity products like PVC pipe, which was down approximately 21% in the first quarter and grass seed which was down approximately 10%.

John Guthrie: Thanks, Doug I'll begin on slide nine with some highlights from our first quarter results.

John Guthrie: John? Thanks, Doug. I'll begin on slide nine with some highlights from our Q1 results.

John Guthrie: Were 64 selling days in the first quarter, which was the same as the prior year period.

Doug Black: There were 64 selling days in Q1, which is the same as the prior year period. Organic daily sales decreased 1% in Q1 compared to the prior year due to colder weather, which resulted in a later start to the spring selling season, a softer repair and remodel end market, and lower prices for commodity products. Overall, we saw flat volume and 1% price deflation. Price deflation continues to be driven by commodity products like PVC pipe, which was down approximately 21% in Q1, and grass seed, which was down approximately 10%. As mentioned on the last call, we estimate our exposure to tariffs is approximately 10% to 15% of sales. While our Q1 results were not impacted, we are starting to see some tariff-related cost increases from suppliers, which we expect the market to pass through.

John Guthrie: There were 64 selling days in Q1, which is the same as the prior year period. Organic daily sales decreased 1% in Q1 compared to the prior year due to colder weather, which resulted in a later start to the spring selling season, a softer repair and remodel end market, and lower prices for commodity products. Overall, we saw flat volume and 1% price deflation. Price deflation continues to be driven by commodity products like PVC pipe, which was down approximately 21% in Q1, and grass seed, which was down approximately 10%. As mentioned on the last call, we estimate our exposure to tariffs is approximately 10% to 15% of sales. While our Q1 results were not impacted, we are starting to see some tariff-related cost increases from suppliers, which we expect the market to pass through.

John Guthrie: Organic daily sales decreased 1% in the first quarter compared to the prior year due to colder weather, which resulted in a later start to the spring selling season.

John Guthrie: After repair and remodel end market and lower prices for commodity products overall, we saw flat volume and 1% price deflation.

John Guthrie: Price deflation continues to be driven by commodity products like PVC pipe, which was down approximately 21% in the first quarter and grass seed, which was down approximately 10%.

John Guthrie: As mentioned on the last call we estimate our exposure to tariffs is approximately 10% to 15% of sales.

John Guthrie: As mentioned on the last call, we estimate our exposure to tariffs is approximately 10 to 15% of sales. While our first quarter results were not impacted, we are starting to see some tariff-related cost increases from suppliers, which we expect the market to pass through. As a result, our revised 2025 Outlook for Pricing is flat to up 1%, which is a 100 basis point increase from last quarter. A revised outlook reflects current prices and announced increases from suppliers. Given the changing nature of tariffs, there is greater uncertainty than normal in our outlook. Organic daily sales for agronomic products, which include fertilizer, control products, ice melt, and equipment, increased 7% for the first quarter due to solid demand and strong volume growth for ice melt and pest control products.

John Guthrie: While our first quarter results were not impacted we are starting to see some tariff related cost increases from suppliers, which we expect the market to pass through.

John Guthrie: As a result, our revised 2025 outlet for our pricing is flat to up 1%, which is a 100 basis point increase from last quarter.

Doug Black: As a result, our revised 2025 outlook for pricing is flat to up 1%, which is a 100 basis point increase from last quarter. Our revised outlook reflects current prices and announced increases from suppliers. Given the changing nature of tariffs, there is greater uncertainty than normal in our outlook. Organic daily sales for agronomic products, which include fertilizer, control products, ice melt, and equipment, increased 7% for Q1 due to solid demand and strong volume growth for ice melt and pest control products. Organic daily sales for landscaping products, which includes irrigation, nursery, hardscapes, outdoor lighting, and landscape accessories, decreased 4% for Q1 due to lower prices, a softer repair and remodel end market, and colder weather across most regions.

John Guthrie: As a result, our revised 2025 outlook for pricing is flat to up 1%, which is a 100 basis point increase from last quarter. Our revised outlook reflects current prices and announced increases from suppliers. Given the changing nature of tariffs, there is greater uncertainty than normal in our outlook. Organic daily sales for agronomic products, which include fertilizer, control products, ice melt, and equipment, increased 7% for Q1 due to solid demand and strong volume growth for ice melt and pest control products. Organic daily sales for landscaping products, which includes irrigation, nursery, hardscapes, outdoor lighting, and landscape accessories, decreased 4% for Q1 due to lower prices, a softer repair and remodel end market, and colder weather across most regions.

John Guthrie: The outlook reflects current prices and announced increases from suppliers give.

John Guthrie: Given the changing nature of tariffs there is greater uncertainty than normal and our outlook.

John Guthrie: Organic daily sales for agronomic products, which includes fertilizer control product ice melt and equipment increased 7% for the first quarter due to solid demand and strong volume growth for ice melt and pest control products.

Organic daily sales for landscaping products, which includes irrigation nursery hardscape outdoor lighting and landscape accessories decreased 4% for the first quarter due to lower prices.

John Guthrie: Organic daily sales for landscaping products, which includes irrigation, nursery, hardscapes, outdoor lining, and landscapes accessories, decreased 4% for the first quarter due to lower prices. a software repair and remodel and market and colder weather across most regions. Geographically, four out of our nine regions achieved positive organic daily sales growth in the first quarter, with weather and tough comps being the primary differentiator between regions.

John Guthrie: Softer repair and remodel end market and colder weather across most regions.

John Guthrie: Geographically.

John Guthrie: Out of our nine regions achieved positive organic daily sales growth in the first quarter with weather and tough comps being the primary differentiator between region.

Doug Black: Geographically, 4 out of our 9 regions achieved positive organic daily sales growth in Q1, with weather and tough comps being the primary differentiator between regions. Acquisition sales, which reflect sales attributable to acquisitions completed in 2024 and 2025, contributed approximately $45 million or 5% to net sales growth. Gross profit increased 3% to approximately $310 million for Q1 2025 compared to approximately $301 million for the prior year period. Gross margin for Q1 contracted 30 basis points to 33% due to lower price realization and higher freight costs, partially offset by a positive impact from acquisitions. Selling, general, and administrative expenses, or SG&A, increased 5% to approximately $343 million for Q1. SG&A, as a percentage of net sales, increased 30 basis points in the quarter to 36.5%.

John Guthrie: Geographically, 4 out of our 9 regions achieved positive organic daily sales growth in Q1, with weather and tough comps being the primary differentiator between regions. Acquisition sales, which reflect sales attributable to acquisitions completed in 2024 and 2025, contributed approximately $45 million or 5% to net sales growth. Gross profit increased 3% to approximately $310 million for Q1 2025 compared to approximately $301 million for the prior year period. Gross margin for Q1 contracted 30 basis points to 33% due to lower price realization and higher freight costs, partially offset by a positive impact from acquisitions. Selling, general, and administrative expenses, or SG&A, increased 5% to approximately $343 million for Q1. SG&A, as a percentage of net sales, increased 30 basis points in the quarter to 36.5%.

John Guthrie: Acquisition sales.

John Guthrie: Acquisition failed. would reflect sales attributable to acquisitions completed in 2024 and 2025 contributed approximately 45 million or 5% to net sales growth. Gross profit increased 3% to approximately $310 million for the first quarter 2025, compared to approximately $301 million for the prior year period. Gross margin for the first quarter contracted 30 basis points to 33% due to lower price realization and higher freight costs, partially offset by a positive impact from acquisitions. Selling General and Administrative Expenses, or SG&A, increased 5% to approximately $343 million for the first quarter. SG&A, as a percentage of net sales, increased 30 basis points in the quarter to 36.5%.

John Guthrie: With reflect sales attributable to acquisitions completed in 2024, and 2025 contributed approximately $45 million of 5% to net sales growth.

John Guthrie: Gross profit increased 3% to approximately $310 million for the first quarter of 2025 compared to approximately $301 million for the prior year period.

John Guthrie: Gross margin for the first quarter contracted 30 basis points to 33% due to lower price realization and higher freight costs.

John Guthrie: Actually offset by a positive impact from acquisitions.

John Guthrie: Selling general and administrative expenses or SG&A increased 5% to approximately $343 million for the first quarter.

John Guthrie: SG&A as a percentage of net sales increased 30 basis points in the quarter to 36, 5%.

John Guthrie: The increase in both SG&A and SG&A as a percentage of net sales primarily reflects the impact of acquisition.

John Guthrie: The increase in both SG&A and SG&A as a percentage of net sales primarily reflects the impact of acquisitions.

Doug Black: The increase in both SG&A and SG&A as a percentage of net sales primarily reflects the impact of acquisitions. Base business adjusted SG&A decreased approximately 3% this quarter, reflecting the actions we took last year to right-size our business for the current market environment. For Q1, we reported an income tax benefit of approximately $9 million compared to the approximately $10 million for the prior year period. The effective tax rate was 25.5% for Q1 of 2025 compared to 33.4% for the prior year period. The decrease in the effective tax rate was primarily due to a decrease in the amount of excess tax benefits from stock-based compensation. We continue to expect 2025 fiscal year effective tax rate will be between 25% and 26%, excluding discrete items such as excess tax benefits and tax deficiencies.

John Guthrie: The increase in both SG&A and SG&A as a percentage of net sales primarily reflects the impact of acquisitions. Base business adjusted SG&A decreased approximately 3% this quarter, reflecting the actions we took last year to right-size our business for the current market environment. For Q1, we reported an income tax benefit of approximately $9 million compared to the approximately $10 million for the prior year period. The effective tax rate was 25.5% for Q1 of 2025 compared to 33.4% for the prior year period. The decrease in the effective tax rate was primarily due to a decrease in the amount of excess tax benefits from stock-based compensation. We continue to expect 2025 fiscal year effective tax rate will be between 25% and 26%, excluding discrete items such as excess tax benefits and tax deficiencies.

John Guthrie: Base business adjusted SG&A decreased approximately 3% this quarter, reflecting the actions we took last year to right size our business for the current market environment.

John Guthrie: A business adjusted SG&A decreased approximately 3% this quarter, reflecting the actions we took last year to right size our business for the current market environment. For the first quarter, we recorded an income tax benefit of approximately $9 million compared to the approximately $10 million for the prior year period. The effective tax rate was 25.5% for the first quarter of 2025, compared to 33.4% for the prior year period. The decrease in the effective tax rate was primarily due to a decrease in the amount of excess tax benefits from stock-based compensation. We continue to expect 2025 fiscal year effective tax rate will be between 25 and 26%, excluding discrete items such as excess tax benefits and tax deficiencies.

John Guthrie: For the first quarter, we reported an income tax benefit of approximately $9 million compared to debt of approximately $10 million for the prior year period.

John Guthrie: The effective tax rate was 25, 5% for the first quarter of 2025 compared to 33, 4% for the prior year period to.

John Guthrie: The decrease in the effective tax rate was primarily due to a decrease in the amount of excess tax benefits from stock based compensation.

John Guthrie: We continue to it throughout 2025 fiscal year effective tax rate will be between 25, and 26% excluding discrete items, such as excess tax benefits and tax deficiencies.

John Guthrie: We recorded a net loss attributable to <unk>, one of $27 3 million for the first quarter of 2025 compared to $19 3 million for the prior year period.

John Guthrie: We recorded a net loss attributable to SiteOne of $27.3 million for the first quarter of 2025 compared to $19.3 million for the prior year period. The increase in the net loss was primarily attributable to higher SG&A expense, partially offset by higher net sale. Our weighted average diluted share count was approximately 45.1 million for the three months ended March 30, 2025, compared to approximately 45.3 million for the prior year period. We repurchased approximately 29,000 shares for $3.4 million in the first quarter. In addition, we purchased an additional 142,000 shares for $16.6 million subsequent to quarter end.

Doug Black: We recorded a net loss attributable to SiteOne of $27.3 million for Q1 2025 compared to $19.3 million for the prior year period. The increase in the net loss was primarily attributable to higher SG&A expense, partially offset by higher net sales. Our weighted average diluted share count was approximately 45.1 million for the three months ended March 30, 2025, compared to approximately 45.3 million for the prior year period. We repurchased approximately 29,000 shares for $3.4 million in Q1. In addition, we purchased an additional 142,000 shares for $16.6 million subsequent to quarter end. Adjusted EBITDA increased 6% to $22.4 million for Q1 compared to $21.1 million for the prior year period. Adjusted EBITDA margin improved approximately 10 basis points to 2.4%. Adjusted EBITDA includes adjusted EBITDA attributable to a non-controlling interest of $0.3 million for Q1.

John Guthrie: We recorded a net loss attributable to SiteOne of $27.3 million for Q1 2025 compared to $19.3 million for the prior year period. The increase in the net loss was primarily attributable to higher SG&A expense, partially offset by higher net sales. Our weighted average diluted share count was approximately 45.1 million for the three months ended March 30, 2025, compared to approximately 45.3 million for the prior year period. We repurchased approximately 29,000 shares for $3.4 million in Q1. In addition, we purchased an additional 142,000 shares for $16.6 million subsequent to quarter end. Adjusted EBITDA increased 6% to $22.4 million for Q1 compared to $21.1 million for the prior year period. Adjusted EBITDA margin improved approximately 10 basis points to 2.4%. Adjusted EBITDA includes adjusted EBITDA attributable to a non-controlling interest of $0.3 million for Q1.

John Guthrie: The increase in the net loss was primarily attributable to higher SG&A expense, partially offset by higher net sales.

John Guthrie: Our weighted average diluted share count was approximately $45 1 million for the three months ended March 32025.

John Guthrie: <unk> approximately $45 3 million for the prior year period.

John Guthrie: We repurchased approximately 29000 shares for $3 4 million in the first quarter. In addition, we purchased an additional 142000 shares for $16 6 million subsequent to quarter end.

John Guthrie: Adjusted EBITDA increased 6% to $22 4 million for the first quarter compared to 21 1 million for the prior year period.

John Guthrie: Adjusted EBITDA increased 6% to $22.4 million for the first quarter compared to $21.1 million for the prior year period. adjusted EBITDA margin improved approximately 10 basis points to 2.4 percent. Adjusted EBITDA includes adjusted EBITDA attributable to a non-controlling interest of $0.3 million for the first quarter.

John Guthrie: Adjusted EBITDA margin improved approximately 10 basis points to two 4%.

John Guthrie: Adjusted EBITDA includes adjusted EBITDA attributable to our non controlling interest of <unk> 3 million for the first quarter.

John Guthrie: Now I would like to provide a brief update on our balance sheet and cash flow statement as shown on slide 10.

John Guthrie: Now I would like to provide a brief update on our balance sheet and cash flow statement as shown on slide 10. Working capital at the end of the first quarter was approximately $1 billion compared to $910 million at the end of the same period prior year. The increase in working capital is primarily due to the additional working capital from acquisitions and increased purchases of inventory ahead of potential tariffs. Cash used in operating activities increased approximately $30 million to approximately $130 million in the first quarter. The increase primarily reflects our early purchases of inventory ahead of potential tariffs.

Doug Black: Now, I would like to provide a brief update on our balance sheet and cash flow statement as shown on slide 10. Working capital at the end of the first quarter was approximately $1 billion compared to $910 million at the end of the same period, prior year. The increase in working capital is primarily due to the additional working capital from acquisitions, and increased purchases of inventory ahead of potential tariffs. Cash used in operating activities increased approximately $30 million to approximately $130 million in the first quarter. The increase primarily reflects our early purchases of inventory ahead of potential tariffs. We made cash investments of approximately $21 million for the first quarter compared to approximately $7 million for the same period in 2024. The increase primarily reflects higher acquisition investment, and capital expenditures.

John Guthrie: Now, I would like to provide a brief update on our balance sheet and cash flow statement as shown on slide 10. Working capital at the end of the first quarter was approximately $1 billion compared to $910 million at the end of the same period, prior year. The increase in working capital is primarily due to the additional working capital from acquisitions, and increased purchases of inventory ahead of potential tariffs. Cash used in operating activities increased approximately $30 million to approximately $130 million in the first quarter. The increase primarily reflects our early purchases of inventory ahead of potential tariffs. We made cash investments of approximately $21 million for the first quarter compared to approximately $7 million for the same period in 2024. The increase primarily reflects higher acquisition investment, and capital expenditures.

John Guthrie: Working capital at the end of the first quarter was approximately $1 billion compared to $910 million at the end of the same period prior year.

John Guthrie: The increase in working capital is primarily due to the additional working capital from the acquisitions and increased purchases of inventory ahead of potential tariffs.

John Guthrie: Cash used in operating activities increased approximately $30 million to approximately 130 million in the first quarter.

John Guthrie: The increase primarily reflects our early purchases of inventory ahead of potential tariffs.

John Guthrie: We made cash investments of approximately 21 billion for the first quarter compared to approximately $7 million for the same period in 2020 for the.

John Guthrie: made cash investments of approximately 21 million for the first quarter compared to approximately 7 million for the same period in 2024. The increase primarily reflects higher acquisition investment and capital expenditures. Capital expenditures for the quarter were approximately $15 million compared to approximately $9 million for the prior year period due to increased investment in branch equipment and branch improvement. That debt at the end of the quarter was approximately $580 million compared to approximately $508 million at the end of the first quarter of last year. Leverage increased to 1.5 times our trailing 12-month adjusted EBITDA compared to 1.3 times for the same period prior year.

John Guthrie: The increase primarily reflects higher acquisition investment and capital expenditures.

John Guthrie: Capital expenditures for the quarter or approximately $15 million compared to approximately $9 million for the prior year period due to increased investments in branch equipment branch improvements.

Doug Black: Capital expenditures for the quarter were approximately $15 million compared to approximately $9 million for the prior year period due to increased investment in branch equipment and branch improvements. Net Debt at the end of the quarter was approximately $580 million compared to approximately $508 million at the end of the first quarter of last year. Leverage increased to 1.5 times our trailing 12-month Adjusted EBITDA compared to 1.3 times for the same period, prior year. As a reminder, our target year-end Net Debt to Adjusted EBITDA leverage range is one to two times. At the end of the quarter, we had available liquidity of approximately $524 million, which consisted of approximately $57 million cash on hand and approximately $468 million in available capacity under our ABL Facility.

John Guthrie: Capital expenditures for the quarter were approximately $15 million compared to approximately $9 million for the prior year period due to increased investment in branch equipment and branch improvements. Net Debt at the end of the quarter was approximately $580 million compared to approximately $508 million at the end of the first quarter of last year. Leverage increased to 1.5 times our trailing 12-month Adjusted EBITDA compared to 1.3 times for the same period, prior year. As a reminder, our target year-end Net Debt to Adjusted EBITDA leverage range is one to two times. At the end of the quarter, we had available liquidity of approximately $524 million, which consisted of approximately $57 million cash on hand and approximately $468 million in available capacity under our ABL Facility.

John Guthrie: Net debt at the end of the quarter was approximately $580 million compared to approximately $508 million at the end of the first quarter of last year.

John Guthrie: Leverage increased to one five times, our trailing 12 month adjusted EBITDA compared to one three times for the same period prior year.

John Guthrie: As a reminder, our target year end net debt to adjusted EBITDA leverage range is one to two times.

John Guthrie: As a reminder, our target year-end net debt to adjusted EBITDA leverage range is one to two times. At the end of the quarter, we had available liquidity of approximately 524 million, which consisted of approximately 57 million cash on hand and approximately 468 million in available capacity under our ABL facility. A priority from a balance sheet and funding perspective is to maintain our financial strength and flexibility so we can execute our growth strategy in all market environments.

John Guthrie: At the end of the quarter, we had available liquidity of approximately $524 million.

John Guthrie: Which consisted of approximately $57 million cash on hand, and approximately $468 million and available capacity under our ABL facility.

John Guthrie: Our priority from a balance sheet and funding perspective is to maintain our financial strength and flexibility. So we can execute our growth strategy and our market environment.

Doug Black: Our priority from a balance sheet and funding perspective is to maintain our financial strength and flexibility so we can execute our growth strategy in all market environments. I will now turn the call over to Scott for an update on our acquisition strategy. Thanks, John. As shown on slide 11, we acquired one company in Q1 and one post-quarter for a combined trailing 12-month net sales of approximately $20 million year to date. Since 2014, we have acquired 100 companies with approximately $2 billion in trailing 12-month net sales added to SiteOne. Turning to slides 12 and 13, you will find information on our most recent acquisitions. On 2 January, Devil Mountain, SiteOne's majority-owned joint venture, acquired Pacific Nurseries, a single-location wholesale distributor of nursery products in Colma, California.

John Guthrie: Our priority from a balance sheet and funding perspective is to maintain our financial strength and flexibility so we can execute our growth strategy in all market environments. I will now turn the call over to Scott for an update on our acquisition strategy. Thanks, John. As shown on slide 11, we acquired one company in Q1 and one post-quarter for a combined trailing 12-month net sales of approximately $20 million year to date. Since 2014, we have acquired 100 companies with approximately $2 billion in trailing 12-month net sales added to SiteOne. Turning to slides 12 and 13, you will find information on our most recent acquisitions. On 2 January, Devil Mountain, SiteOne's majority-owned joint venture, acquired Pacific Nurseries, a single-location wholesale distributor of nursery products in Colma, California.

John Guthrie: I will now turn the call over to Scott for an update on our acquisition strategy.

Scott Salmon: I will now turn the call over to Scott for an update on our acquisition strategy. Thanks, John. As shown on slide 11, we acquired one company in the first quarter and one post-quarter for a combined trailing 12-month net sales of approximately $20 million year-to-date. Since 2014, we have acquired 100 companies with approximately $2 billion in trailing 12-month net sales added to SiteOne.

Scott: Thanks, John as shown on Slide 11, we acquired one company in the first quarter and one post quarter for a combined trailing 12 month net sales of approximately $20 million year to date.

Scott: Since 2014, we have acquired 100 companies with approximately $2 billion and trailing 12 month net sales added to cite one.

Scott: Turning to slide 12, and 13, you will find information on our most recent acquisitions.

Scott Salmon: Turning to slides 12 and 13, you will find information on our most recent acquisition. On January 2nd, Devil Mountain, SiteOne's majority-owned joint venture, acquired Pacific Nurseries, a single-location wholesale distributor of nursery products in Colma, California. This acquisition improves our capability to serve our customers in the San Francisco Bay Area and extends our leading wholesale nursery presence in California. This is the first acquisition for Devil Mountain since we joined forces in April 2024 and we anticipate more opportunities to expand this strong wholesale nursery platform going forward. On March 31st, we acquired Green Trade Nursery, a single-location wholesale distributor of nursery products in Jasper, Georgia.

Scott: On January 2nd that will mountain site one's majority owned joint venture acquired Pacific Nurseries.

Single location wholesale distributor of nursery products in Colma, California.

Scott: This acquisition improves our capability to serve our customers in the San Francisco Bay area and extends our leading wholesale nursery presence in California.

Doug Black: This acquisition improves our capability to serve our customers in the San Francisco Bay Area and extends our leading wholesale nursery presence in California. This is the first acquisition for Devil Mountain since we joined forces in April 2024, and we anticipate more opportunities to expand this strong wholesale nursery platform going forward. On 31 March, we acquired Green Trade Nursery, a single-location wholesale distributor of nursery products in Jasper, Georgia. The addition of Green Trade extends our leading nursery position further into the fast-growing North Atlanta markets, providing our customers in these markets with greater access to high-quality nursery products. Summarizing on slide 14, our acquisition strategy continues to create significant value for SiteOne by adding excellent talent and moving us forward toward our goal of providing a full line of landscape products and services to our customers in all major US and Canadian markets.

John Guthrie: This acquisition improves our capability to serve our customers in the San Francisco Bay Area and extends our leading wholesale nursery presence in California. This is the first acquisition for Devil Mountain since we joined forces in April 2024, and we anticipate more opportunities to expand this strong wholesale nursery platform going forward. On 31 March, we acquired Green Trade Nursery, a single-location wholesale distributor of nursery products in Jasper, Georgia. The addition of Green Trade extends our leading nursery position further into the fast-growing North Atlanta markets, providing our customers in these markets with greater access to high-quality nursery products. Summarizing on slide 14, our acquisition strategy continues to create significant value for SiteOne by adding excellent talent and moving us forward toward our goal of providing a full line of landscape products and services to our customers in all major US and Canadian markets.

Scott: This is the first acquisition for Devil Mountain since we joined forces in April 2024, and we anticipate more opportunities to expand this strong wholesale nursery platform going forward.

Scott: On March 30, <unk>, we acquired Green trade nursery, a single location wholesale distributor of nursery products and Jasper Georgia.

The addition of Green trade extends our leading nursery position further into the fast growing north Atlanta markets, providing our customers in these markets with greater access to high quality nursery products.

Scott Salmon: The addition of Green Trade extends our leading nursery position further into the fast-growing North Atlanta markets, providing our customers in these markets with greater access to high-quality nursery products.

Scott: Summarizing on slide 14, our acquisition strategy continues to create significant value for <unk> by adding excellent talent and moving us forward toward our goal of providing a full line of landscape products and services to our customers in all major U S and Canadian markets.

Scott Salmon: Summarizing on slide 14, our acquisition strategy continues to create significant value for SiteOne by adding excellent talent and moving us forward toward our goal of providing a full line of landscape products and services to our customers in all major U.S. and Canadian markets.

Doug Black: As Doug mentioned, the ongoing macroeconomic uncertainty tends to have a dampening effect on acquisition activity.

Scott Salmon: As Doug mentioned, the ongoing macroeconomic uncertainty tends to have a dampening effect on acquisition activity.

Doug Black: As Doug mentioned, the ongoing macroeconomic uncertainty tends to have a dampening effect on acquisition activity. Accordingly, our acquired revenue may be lower this year. That said, we have a large pipeline of potential deals that we are actively cultivating and significant runway to grow and create value through acquisitions this year and in the years to come. As always, I want to thank the entire SiteOne team for their passion and commitment to making SiteOne a great place to work and for welcoming the newly acquired teams when they join the SiteOne family. I will now turn the call back to Doug. Thanks, Scott. I'll wrap up on slide 15. There remains significant macroeconomic uncertainty associated with tariffs, inflation, and interest rates that could negatively affect consumer confidence and the demand in our end markets.

John Guthrie: As Doug mentioned, the ongoing macroeconomic uncertainty tends to have a dampening effect on acquisition activity. Accordingly, our acquired revenue may be lower this year. That said, we have a large pipeline of potential deals that we are actively cultivating and significant runway to grow and create value through acquisitions this year and in the years to come. As always, I want to thank the entire SiteOne team for their passion and commitment to making SiteOne a great place to work and for welcoming the newly acquired teams when they join the SiteOne family. I will now turn the call back to Doug. Thanks, Scott. I'll wrap up on slide 15. There remains significant macroeconomic uncertainty associated with tariffs, inflation, and interest rates that could negatively affect consumer confidence and the demand in our end markets.

Doug Black: Accordingly, our acquired revenue may be lower this year.

Scott Salmon: Accordingly, our acquired revenue may be lower this year. That said, we have a large pipeline of potential deals that we are actively cultivating and significant runway to grow and create value through acquisitions this year and in the years to come.

Doug Black: That said, we have a large pipeline of potential deals that we are actively cultivating and significant runway to grow and create value through acquisitions. This year and in the years to come as always I want to thank the entire site one team for their passion and commitment to making site one a great place to work and for welcoming the newly acquired teams when they joined the site one family.

Scott Salmon: As always, I want to thank the entire SiteOne team for their passion and commitment to making SiteOne a great place to work and for welcoming the newly acquired teams when they join the SiteOne family. I will now turn the call back to Doug.

Doug Black: I will now turn the call back to Doug.

Doug Black: Thanks, Scott I'll wrap up on slide 15.

Doug Black: Thanks, Scott.

Doug Black: I'll wrap up on slide 15. There remains significant macroeconomic uncertainty associated with tariffs, inflation, and interest rates that could negatively affect consumer confidence and the demand in our end markets. Against this backdrop, we expect commodity price deflation to continue moderating in 2025 with declines in products like PVC pipe and grass feed mitigated by price increases across our other products. As John mentioned, with the recently announced increases from suppliers due to tariffs, we currently expect prices to be flat to up 1% for the full year 2025. This is an increase from our beginning of the year outlook.

Doug Black: There remains significant macroeconomic uncertainty associated with tariffs and inflation and interest rates that could negatively affect <unk>.

Doug Black: Sumer confidence and the demand in our end markets.

Doug Black: Against this backdrop, we expect commodity price deflation to continue moderating in 2025 with declines in products like PVC pipe and grass seed mitigated by price increases across our other products. As John mentioned, with the recently announced increases from suppliers due to tariffs, we currently expect prices to be flat to up 1% for the full year, 2025. This is an increase from our beginning of the year outlook. In terms of end markets, our current outlook is a bit more pessimistic compared to the beginning of the year. We continue to expect new residential single-family completions, which comprise 21% of our sales, to be roughly flat in 2025. Continued high interest rates, elevated home values, and lower consumer confidence are constraining demand. But with inventory being low, builders are continuing to build new homes.

John Guthrie: Against this backdrop, we expect commodity price deflation to continue moderating in 2025 with declines in products like PVC pipe and grass seed mitigated by price increases across our other products. As John mentioned, with the recently announced increases from suppliers due to tariffs, we currently expect prices to be flat to up 1% for the full year, 2025. This is an increase from our beginning of the year outlook. In terms of end markets, our current outlook is a bit more pessimistic compared to the beginning of the year. We continue to expect new residential single-family completions, which comprise 21% of our sales, to be roughly flat in 2025. Continued high interest rates, elevated home values, and lower consumer confidence are constraining demand. But with inventory being low, builders are continuing to build new homes.

Doug Black: As John mentioned with the recently announced increases from suppliers due to tariffs. We currently expect prices to be flat to up 1% for the full year 2025.

Doug Black: This is an increase from our beginning of the year outlook.

Doug Black: In terms of end markets. Our current outlook is a bit more pessimistic compared to the beginning of the year.

Doug Black: In terms of end markets, our current outlook is a bit more pessimistic compared to the beginning of the year. We continue to expect new residential single-family completions, which comprise 21% of our sales, to be roughly flat in 2025. continued high interest rates, elevated home values and lower consumer confidence are constraining demand. But with inventory being low, builders are continuing to build new homes. Feedback from our customers in this segment is mixed, and we expect stable demand for landscaping products in this end market during the remainder of the year. new commercial construction, which represents 14% of our sales was solid in 2024.

Doug Black: We continue to expect new residential single family completions, which comprised 21% of our sales to be roughly flat in 2025.

Doug Black: Continued high interest rates elevated home values and lower consumer confidence are constraining demand, but with inventory being low builders are continuing to build new homes.

Doug Black: Feedback from our customers in this segment is mixed and we expect stable demand for landscaping products in this end market during the remainder of the year.

Doug Black: Feedback from our customers in this segment is mixed, and we expect stable demand for landscaping products in this end market during the remainder of the year. New commercial construction, which represents 14% of our sales, was solid in 2024, and we believe it will remain steady in 2025. Bidding activity from our project services teams continues to be positive compared to prior year, which is a good indicator of continued demand. Our customer backlogs remain solid, and we believe the commercial end market will be flat this year. The repair and upgrade market, which represents 30% of our sales, was our weakest end market in 2024 with high single-digit volume declines. During the second half of last year, we saw this end market stabilize, but we are off to a soft start with repair and upgrade in 2025.

John Guthrie: Feedback from our customers in this segment is mixed, and we expect stable demand for landscaping products in this end market during the remainder of the year. New commercial construction, which represents 14% of our sales, was solid in 2024, and we believe it will remain steady in 2025. Bidding activity from our project services teams continues to be positive compared to prior year, which is a good indicator of continued demand. Our customer backlogs remain solid, and we believe the commercial end market will be flat this year. The repair and upgrade market, which represents 30% of our sales, was our weakest end market in 2024 with high single-digit volume declines. During the second half of last year, we saw this end market stabilize, but we are off to a soft start with repair and upgrade in 2025.

Doug Black: New commercial construction, which represents 14% of our sales was solid in 2024, and we believe it will remain steady in 2025.

Doug Black: And we believe it will remain steady in 2025. Beating activity from our project services teams continues to be positive compared to prior year, which is a good indicator of continued demand. Our customer backlogs remain solid, and we believe the commercial end market will be flat this year.

Doug Black: Bidding activity from our project services teams continues to be positive compared to prior year, which is a good indicator of continued demand.

Doug Black: Our customer backlogs remained solid and we believe the commercial end market will be flat this year.

Doug Black: The repair and upgrade market, which represents 30% of ourselves was our weakest end market in 2024 with high single digit volume declines.

Doug Black: The repair and upgrade market, which represents 30% of our sales was our weakest end market in 2024, with high single digit volume decline. During the second half of last year, we saw this end market stabilize, but we are off to a soft start with repair and upgrade in 2025. lower consumer confidence, reduced existing home sales, and high economic uncertainty. We believe that repair and upgrade will be down those single digits in 2025.

Doug Black: During the second half of last year. We saw this end market stabilized, but we are off to a soft start with repair and upgrade in 2025.

Doug Black: Lower consumer confidence reduced existing home sales and high economic uncertainty, we believe that repair and upgrade will be down low single digits in 2025.

Doug Black: With lower consumer confidence, reduced existing home sales, and high economic uncertainty, we believe that repair and upgrade will be down low single digits in 2025. Lastly, in the maintenance end market, which represents 35% of our sales, we achieved good sales growth in Q1 as our teams gained profitable market share. We expect the maintenance end market to continue growing steadily in 2025. Taken all together, we expect our end markets to be flat to slightly down for the full year. With this backdrop and with the benefit of our commercial initiatives, we expect sales volume to be positive in 2025. When coupled with modest price inflation, we expect low single-digit organic daily sales growth for the full year, 2025. Our current sales volume through April so far supports this trend.

John Guthrie: With lower consumer confidence, reduced existing home sales, and high economic uncertainty, we believe that repair and upgrade will be down low single digits in 2025. Lastly, in the maintenance end market, which represents 35% of our sales, we achieved good sales growth in Q1 as our teams gained profitable market share. We expect the maintenance end market to continue growing steadily in 2025. Taken all together, we expect our end markets to be flat to slightly down for the full year. With this backdrop and with the benefit of our commercial initiatives, we expect sales volume to be positive in 2025. When coupled with modest price inflation, we expect low single-digit organic daily sales growth for the full year, 2025. Our current sales volume through April so far supports this trend.

Doug Black: Lastly, in the maintenance end market, which represents 35% of our sales we achieved good sales growth in the first quarter as our teams gained profitable market share.

Doug Black: Lastly, in the maintenance and market, which represents 35% of our sales, we achieved good sales growth in the first quarter as our teams gained profitable market share. We expect the maintenance and market to continue growing steadily in 2025. taken all together, we expect our end markets to be flat to slightly down for the full year. This backdrop and with the benefit of our commercial initiatives, we expect sales volume to be positive in 2025. When coupled with modest price inflation, we expect low single-digit organic daily sales growth for the full year 2025. Our current sales volume through April so far supports this trend.

Doug Black: We expect the maintenance end market to continue growing steadily in 2025.

Doug Black: Taken altogether, we expect our end markets to be flat to slightly down for the full year.

Doug Black: This backdrop and with the benefit of our commercial initiatives, we expect sales volume to be positive in 2025.

Doug Black: When coupled with modest price inflation, we expect low single digit organic daily sales growth for the full year 2025.

Doug Black: Our current sales volume through April so far supports this trend.

Doug Black: We expect gross margin in 2025, it would be similar to 2024, driven by our initiatives and the contribution from acquisitions offsetting higher freight costs.

Doug Black: We expect gross margin in 2025 to be similar to 2024, driven by our initiatives and the contribution from acquisitions offsetting higher freight costs. With strong actions taken in 2024 to reduce SG&A and continued focus on branch improvement, sales productivity, and delivery efficiency, we expect to achieve operating leverage in 2025 yielding solid improvement in our adjusted EBITDA margin. In terms of acquisitions, as Scott mentioned, we expect to add more excellent companies to the SiteOne family during the remainder of the year, though potentially less acquired revenue compared to 2024. With all these factors in mind, we continue to expect our full-year adjusted EBITDA for fiscal 2025 to be in the range of $400 million to 430 million. This range does not factor in any contribution from unannounced acquisitions.

John Guthrie: We expect gross margin in 2025 to be similar to 2024, driven by our initiatives and the contribution from acquisitions offsetting higher freight costs. With strong actions taken in 2024 to reduce SG&A and continued focus on branch improvement, sales productivity, and delivery efficiency, we expect to achieve operating leverage in 2025 yielding solid improvement in our adjusted EBITDA margin. In terms of acquisitions, as Scott mentioned, we expect to add more excellent companies to the SiteOne family during the remainder of the year, though potentially less acquired revenue compared to 2024. With all these factors in mind, we continue to expect our full-year adjusted EBITDA for fiscal 2025 to be in the range of $400 million to 430 million. This range does not factor in any contribution from unannounced acquisitions.

Doug Black: We're strong actions taken in 2024 to reduce SG&A and continued focus on branch improvement sales productivity and delivery efficiency, we expect to achieve operating leverage in 2025, yielding solid improvement in our adjusted EBITDA margin.

Doug Black: In terms of acquisitions as Scott mentioned, we expect to add more excellent companies to decide one family during the remainder of the year, though potentially less acquired revenue compared to 2024.

Doug Black: In terms of acquisitions, as Scott mentioned, we expect to add more excellent companies to the SiteOne family during the remainder of the year, though potentially less acquired revenue compared to 2024. With all these factors in mind, we continue to expect our full-year adjusted EBDA for fiscal 2025 to be in the range of $400 million to $430 million. This range does not factor in any contribution from unannounced acquisition.

Doug Black: But all of these factors in mind, we continue to expect our full year adjusted EBITDA for fiscal 2025 to be in the range of 400 million to $430 million.

Doug Black: This range does not factor in any contribution from unannounced acquisitions.

Doug Black: In closing I would like to sincerely. Thank all of our site. One associates continue to amaze me with their passion commitment teamwork and selfless service.

Doug Black: In closing, I would like to sincerely thank all our SiteOne associates who continue to amaze me with their passion, commitment, teamwork, and selfless service. We have a tremendous team, and it is an honor to be joined with them as we deliver increase in value for all our stakeholders. I would also like to thank our suppliers for supporting us so strongly and our customers for allowing us to be their partner. Operator, please open the line for questions. Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question at this time, you may press star one from your telephone keypad, and a confirmation tone to indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

John Guthrie: In closing, I would like to sincerely thank all our SiteOne associates who continue to amaze me with their passion, commitment, teamwork, and selfless service. We have a tremendous team, and it is an honor to be joined with them as we deliver increase in value for all our stakeholders. I would also like to thank our suppliers for supporting us so strongly and our customers for allowing us to be their partner. Operator, please open the line for questions.

Doug Black: Have a tremendous team and it is an honor to be joined with them as we deliver increasing value for all our stakeholders.

Doug Black: I would also like to thank our suppliers for supporting that so strongly and our customers for allowing us to be their partner.

Doug Black: I would also like to thank our suppliers for supporting us so strongly and our customers for allowing us to be their partner.

Speaker Change: Operator, please open the line for questions.

Unknown Attendee: Operator, please open the line for questions. Thank you.

Speaker Change: Thank you.

Speaker Change: We'll be conducting a question and answer session.

Operator: Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question at this time, you may press star one from your telephone keypad, and a confirmation tone to indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

Unknown Attendee: We'll now be conducting a question and answer session. If you'd like to ask a question at this time, you may press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you.

Speaker Change: To ask a question at this time you May press Star one from your telephone keypad.

Speaker Change: Your line is in the question queue.

Chris: Chris There too if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star.

Doug Black: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question today comes from the line of David Manthey with Baird. Please receive their questions. Thank you. Good morning, everyone. First question. Doug, you mentioned DispatchTrack and your focus branch efforts. I was just wondering, just to level set, if you could define and kind of give us recent wins in each of those, just to give us an idea of how those are progressing and what we might expect going forward. Yeah. So we've got significant efforts on both of those, as you know, taking DispatchTrack first. DispatchTrack, we installed over the last couple of years at SiteOne. It's our tracking software where we can track our trucks and route, etc.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question today comes from the line of David Manthey with Baird. Please receive their questions.

Chris: Keith.

Chris: Please poll for questions. Thank you.

Chris: Yeah.

Speaker Change: Our first question today comes from the line of David Manthey with Baird.

David Manthey: Our first question today comes from the line of David Manthey with Baird. Please receive your question. Thank you.

Speaker Change: With your question.

Speaker Change: Thank you and good morning, everyone.

David Manthey: Thank you. Good morning, everyone. First question. Doug, you mentioned DispatchTrack and your focus branch efforts. I was just wondering, just to level set, if you could define and kind of give us recent wins in each of those, just to give us an idea of how those are progressing and what we might expect going forward.

Speaker Change: First question.

Doug Black: Good morning, everyone. First question, Doug, you mentioned the dispatch track and your focus branch efforts, I was just wondering, just to level set, if you could define and kind of give us recent wins in each of those, just to give us an idea of how those are progressing and what we might expect going forward. Yeah, so, you know, we've got significant efforts on both those, as you know, taking dispatch track first. You know, dispatch track we installed over the last couple of years at SiteOne. It's our tracking software where we can, you know, track our trucks and route, et cetera.

Speaker Change: Doug you mentioned the dispatch track and your focus branch efforts I was just wondering just to level set if you could define and kind of give us recent wins in each of those just to give us an idea of how those are progressing and what we might expect going forward.

Speaker Change: Yeah. So you know we've got significant efforts on both of those as you know taking this fast track first.

Doug Black: Yeah. So we've got significant efforts on both of those, as you know, taking DispatchTrack first. DispatchTrack, we installed over the last couple of years at SiteOne. It's our tracking software where we can track our trucks and route, etc.

Speaker Change: <unk>.

Speaker Change: We are installed over the last couple of years at site. One is our which are tracking software where we can.

Speaker Change: Track, our trucks and route et cetera.

Speaker Change: We did also notify customers when their deliveries are coming in and he is a great customer service tool.

Doug Black: We can also notify customers when their deliveries are coming, and, you know, it's a great customer service tool. We've gotten the customer service benefit out of it, but in terms of really consolidating our last leg of delivery, we're continuing to move forward there in terms of going from dispatch from each branch to central dispatch in a main market and in driving the efficiency of those trucks and the drivers associated with them. So, we track our delivery expense, and without specific numbers, you know, we can see the progress that, you know, it's a significant part of our SG&A.

Doug Black: We can also notify customers when their deliveries are coming, and it's a great customer service tool. We've gotten the customer service benefit out of it. But in terms of really consolidating our last leg of delivery, we're continuing to move forward there in terms of going from dispatch from each branch to a central dispatch in a main market and in driving the efficiency of those trucks and the drivers associated with them. So we track our delivery expense, and without specific numbers, we can see the progress, that it's a significant part of our SG&A. We can see the progress that we're making in the first quarter. We make good progress in driving that expense down. And so that's a multi-year effort to get SG&A leverage out of the business. The second one, our focus branches, we've talked about that.

Speaker Change: We've gotten the customer service benefit out of it but in terms of really consolidating our last leg of delivery.

Speaker Change: We're continuing to move forward there in terms of going from a dispatch from each branch to a central dispatch in Maine.

Speaker Change: Market.

Speaker Change: And in driving the efficiency of those trucks and the drivers associated with them. So we've got.

Speaker Change: We track our delivery expense.

Speaker Change: And without specific numbers, we can see the progress that.

Speaker Change: It's a significant part of our SG&A and we can see the progress that we're making in the first quarter. We made good good progress in driving that expense down.

Doug Black: We can see the progress that we're making in the first quarter. We made good progress in driving that expense down, and so, you know, that's a multiyear effort to get SG&A, you know, leverage out of the business. The second one, our focus branches, we've talked about that. We're very pleased with the progress we made in the first quarter. Obviously, Pioneer was a big part of that. We consolidated and closed the 22 branches. We've taken a lot of overhead out of Pioneer, and now we're comping against, you know, last year. We're seeing that overhead savings come through.

Speaker Change: And so that's a multi year effort.

Speaker Change: To get SG&A.

Speaker Change: You know leverage out of the business.

Speaker Change: The second one our focus branches, we've talked about that.

Speaker Change: Very pleased with the progress we made in the first quarter, obviously pioneer was a big part of that we consolidated in close to the 22 branches. We've taken a lot of overhead out of pioneer and now we're comping against last year, we're seeing that overhead savings come through we mentioned in the base business overhead.

Doug Black: We're very pleased with the progress we made in Q1. Obviously, Pioneer was a big part of that. We consolidated and closed the 22 branches. We've taken a lot of overhead out of Pioneer, and now we're comping against last year. We're seeing that overhead savings come through. We mentioned the base business overhead was down 3%. A big part of that is Pioneer. Another part of that is the focus branches, right? We consolidate or close some of those focus branches, but there is some SG&A takeout in those focus branches, and we're seeing that work that was done in 2024 come through comping against our year last year. So with the focus branches, a big part of that also is just improving their customer service, driving more revenue growth, and improving their gross margin.

Doug Black: We mentioned the base business overhead was down 3%. You know, a big part of that is Pioneer. Another part of that is the focus branches, right? We consolidated or closed some of those focus branches, but there is some, you know, SG&A takeout in those focus branches, and we're seeing that, you know, work that was done in 24 come through, comping against, you know, our year last year. So, with the focus branches, a big part of that also is just improving their customer service, driving more revenue growth, improving their gross margin. So, it's more of a total turnaround situation, but certainly SG&A was a part of that.

Speaker Change: Was down 3%.

Speaker Change: Hum.

Speaker Change: Part of that is at pioneer another part of that is the focus branches right, we consolidated or closed some of those focused branches.

Speaker Change: But there is some SG&A takeout and those focused branches and we're seeing that.

Speaker Change: Work that was done in 24 come through Comping against.

Speaker Change: Our our year last year, so with a focused branches a big part of that also is just improving their customer service are driving more revenue growth improving the gross margin. So it's more of a total turnaround situation, but certainly SG&A. It was a part of that in early in the year as you know it's harder to see.

Doug Black: So it's more of a total turnaround situation, but certainly, SG&A is a part of that. And early in the year, it's harder to see the organic sales and margin improvement, but the SG&A improvement is coming through so far. Yeah. Thanks for that. It sounds good. I believe you have about 430,000 customers. I know you're always trying to get more, and you're trying to get additional lines cross-sold into those customers. But beyond that, could you talk about what efforts you're targeting in the coming year to try to get a larger share of wallet of those customers? Right. Well, we're constantly driving to gain share. We've got two ways to do that. One is that existing customers, we increase their share of wallet by adding product lines. And two, going after new customers that we don't have. To divide that up, we're underserved with the small customer.

Doug Black: And early in the year, you know, it's harder to see the organic sales and margin improvement, but the SG&A improvement is coming through so far.

Speaker Change: The organic sales.

Speaker Change: Margin improvement.

Speaker Change: But the SG&A improvement is coming through so far.

Speaker Change: Yes, thanks for that sounds good.

Doug Black: Yeah, thanks for that. Sounds good. I believe you have about 430,000 customers. And I know you're you're always trying to get more and you're trying to get get additional lines cross sold into those customers. But beyond that, could you talk about what efforts you're targeting in the coming year to try to get a larger share of wallet of those customers? Right. Well, you know, we're constantly driving to gain share. We've got two ways to do that. One is that existing customers, we increase their share wallet by adding product lines. And two, going after new customers that we don't have.

David Manthey: Yeah. Thanks for that. It sounds good. I believe you have about 430,000 customers. I know you're always trying to get more, and you're trying to get additional lines cross-sold into those customers. But beyond that, could you talk about what efforts you're targeting in the coming year to try to get a larger share of wallet of those customers?

Speaker Change: I believe you have about.

Speaker Change: 430000 customers.

I know youre always trying to get more and Youre trying to get additional lines cross sold into those customers, but beyond that can you talk about what efforts youre targeting.

Speaker Change: In the coming year to try to get a larger share of wallet of those customers.

Speaker Change: Right well you know we're.

Doug Black: Right. Well, we're constantly driving to gain share. We've got two ways to do that. One is that existing customers, we increase their share of wallet by adding product lines. And two, going after new customers that we don't have. To divide that up, we're underserved with the small customer.

Speaker Change: Constantly drive into to gain share we've got.

Speaker Change: Two ways to do that one is that existing customers. When we increased our share of wallet wallet by adding product lines.

Speaker Change: And to going after new customers customers that we don't have.

Speaker Change: To divide that up.

Speaker Change: We're we're underserved with the small customer, but if you look at our market share 18% overall.

Doug Black: To divide that up, we're underserved with the small customer. If you look at our market share, 18% overall, our large customer share would be significantly above that. Our small customer share would be, you know, high single digits. And that segment, you know, shops all over, you know, there's shops in Home Depot, Lowe's, shops that are, you know, our competitors, et cetera. And we've seen steady gains with that, where the growth of those small customers is, you know, significantly higher than our company average that continued into the first quarter. And so that's a big area to gain share.

Doug Black: If you look at our market share, 18% overall. Our large customer share would be significantly above that. Our small customer share would be high single digits. That segment shops all over. There's shops in Home Depot, Lowe's, shops that are our competitors, etc. We've seen steady gains with that, where the growth of those small customers is significantly higher than our company average that continued into Q1. So that's a big area to gain share. If we can take that high single digit share of that small customer up to our average, which is 18%, and that won't happen this year. Obviously, it'll happen over multiple years. That's a huge growth engine for SiteOne. Our Hispanic marketing and our bilingual branches, by the way, are a part of that, right, because a lot of those customers are Hispanic.

Speaker Change: Our large customer share would be significantly up above that are small customer share would be high single digits.

Speaker Change: And that segment shops, all over you know the shops in home depot Lowe's home shops at R.

Speaker Change: Our competitors et cetera.

Speaker Change: And we've seen steady gains with that where there the growth of those small customers.

Speaker Change: As you know significantly higher than our company average that continued into the first quarter.

Speaker Change: And so that's a that's a big area to gain share.

Speaker Change: You can take that high single digit there that small customer up to our average which is which is 18%.

Doug Black: You know, if we can take that high single digit there of that small customer up to our average, which is 18%. And that, you know, that won't happen this year. I wish it will happen over multi years. You know, that's a huge growth engine for SiteOne. Our Hispanic marketing and our bilingual branches, by the way, are a part of that, right? Because a lot of those customers are Hispanic. On the other side, you know, gain share with the, you know, kind of call it our midsize and larger customers. You know, we've really focused on our Salesforce productivity, where we divide our sales into kind of two sets.

Speaker Change: That won't happen this year I would say it'll happen over multiple multi years.

Speaker Change: That's a huge growth engine for say one our Hispanic marketing and our bilingual branches by the way are a part of that right because a lot of those customers are Hispanic.

Speaker Change: On the other side, you know gaining share with it you know kind of call it our midsize and larger customers.

Doug Black: On the other side, gaining share with, kind of, call it, our midsize and larger customers, we've really focused on our salesforce productivity, where we divide our sales into kind of two sets. We have our key account managers that manage large books of business, our existing customers, and they're working to gain share with those customers. But we have business development managers that we deploy to go after new business. And they're kind of the big game hunters, if you will. They have smaller books. They're highly trained, and they go after new business. We've seen increasing success with those BDMs in driving our growth. And we have our CRM now. We have better sales management. And so we're seeing increased productivity out of those. And I mentioned on the call, we're now covering more sales with our salesforce than we did before.

Speaker Change: We've really focused on our sales force productivity, where we divide our sales.

Speaker Change: It kind of two sets we have our key account managers that manage large books of business, our existing customers and theyre working to gain share with those customers, but we have business development managers that we deploy to go after new business and there are kind of the the big game hunters. If you will they have smaller boats.

Doug Black: We have our key account managers that manage large books of business, our existing customers, and they're working to gain share with those customers. But we have business development managers that we deploy to go after new business. And they're kind of the big game hunters, if you will. They have smaller books. They're highly trained and they go after new business. We've seen increasing success with those BDMs and driving our growth. And, you know, we have our CRM now, we have better sales management. And so we're seeing increased productivity out of those. And I mentioned on the call, we're now covering more sales with our Salesforce than we did before.

Speaker Change: They're highly trained and they go after new business.

Speaker Change: Seen increasing success with those mediums and driving our growth.

Speaker Change: And we have our CRM now we have better sales management.

Speaker Change: And so we're seeing increased productivity out of those and I mentioned on the call. We're now covering more sales with our sales force.

Speaker Change: Than we did before last year, we cover 65% of our sales this year were covering 72% of our sales with our sales force.

Doug Black: Last year, we covered 65% of our sales. This year, we're covering 72% of our sales with our Salesforce with no added, you know, I'm sorry, 52 or 62 last year, 72 this year, with no added headcount, right? And so, and our sales that are covered by sellers tends to grow faster than the averages I want. And so that's a great progression as we're getting more coverage, but also as we're training and getting more out of those BDMs. Last initiative I'll talk about is we have an initiative with our inside sales associates, which we have a force that is inside that does two things.

Doug Black: Last year, we covered 65% of our sales. This year, we're covering 72% of our sales with our sales force with no added. I'm sorry, 52 or 62 last year, 72 this year, with no added headcount, right? Our sales that are covered by sellers tends to grow faster than the average of SiteOne. So that's a great progression as we're getting more coverage, but also as we're training and getting more out of those BDMs. Last initiative I'll talk about is we have an initiative with our inside sales associates, which we have a force that is inside that does two things. One, it calls customers and welcomes them when they join SiteOne, kind of gets to know their business, profiles them so that we can serve them better. That's new. We've typically done that at the branch, but the branch associates are busy.

With no added.

Speaker Change: I'm, sorry, 70, 52, or <unk> 62 last years 72 this year.

Speaker Change: With no added head count right and so and of our sales that are covered by sellers.

Speaker Change: Is to grow faster than the averages I want and so that's a great progression.

Speaker Change: As we're getting more coverage, but also as we're training and getting more out of those pbms less initiatives I'll talk about it as.

Speaker Change: We have an initiative with our inside sales.

Speaker Change: Associates, which we have a force that is inside that does two things one that calls customers and welcomed when they joined <unk>.

Doug Black: One, it calls customers and welcomes them when they join site one, kind of gets to know their business profiles them so that we can serve them better. That's new. We've typically done that at the branch, but the branch associates are busy. And so we found now that calling them with a separate individual that's tied to that local market does a better job of welcoming them. And then those inside sales associates also go and call customers that have left us or are leaving us to win them back and find out what their issue is, solve that issue and win them back.

Speaker Change: Hum.

Speaker Change: To know their business profile, so that we can serve them better that's new.

Speaker Change: But typically done at the branch, but the branch associates are busy and so we found now that calling them with a separate individual that's tied to that local market does.

Doug Black: And so we found now that calling them with a separate individual that's tied to that local market does a better job of welcoming them. And then those inside sales associates also go and call customers that have left us or are leaving us to win them back, find out what their issue is, solve that issue, and win them back. And so we're seeing some success there in welcoming and getting more new customers in, having them stick, having less turnover with those customers, and going and winning back customers. So I know that's a lot, but it just gives you the breadth of efforts that we're using organically to go gain share. And we're making gains with all of those. And that's how we can outperform the market consistently. That all sounds great, Doug. Thanks very much.

Speaker Change: Does a better job of woken up and then those inside sales associates also go and call on customers that have left us or are leaving us.

Speaker Change: To win them back you'll find out what their what their issue is solved.

Speaker Change: Solve that issue and win them back and so we're seeing some success there.

Speaker Change: And welcome, Maine, and getting more new customers and having them stick.

Doug Black: And so we're seeing some success there in welcoming and getting more new customers in, having them stick, having less turnover with those customers and going and winning that customer.

Having less turnover with those customers and going and winning back customers. So I know that's a lot but it just gives you the breadth of efforts that were.

Doug Black: So I know that's a lot, but it just gives you the breadth of efforts that we're using organically to go gain share. And we're making gains with all of those. And that's how we can outperform the market consistently.

Speaker Change: Using organically two to go gain share and we're making bank because all of those and that's that's how we can outperform the market consistently.

That all sounds great Doug Thanks, very much.

David Manthey: That all sounds great, Doug. Thanks very much.

Unknown Attendee: That all sounds great, Doug. Thanks very much.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Ryan Merkel with William Blair. Please proceed with your question.

Ryan Merkel: Our next question comes from the line of Ryan Merkel with William Blair. Please issue your question. Hey, everyone. Good morning. I wanted to start with your expectation for organic sales growth in the second quarter. And it was great to hear that April, I think, is positive. And, you know, I'm curious, can you do low single digit organic growth in the second quarter just based on what you see today? And it would also be helpful to know how much price you expect to see in the second quarter. We think we can hit a low single-digit organic growth in the second quarter.

Doug Black: Our next question is coming from the line of Ryan Merkel with William Blair. Please receive your questions. Hey, everyone. Good morning. I wanted to start with your expectation for organic sales growth in Q2. It was great to hear that April, I think, is positive. I'm curious, can you do low single digit organic growth in Q2 just based on what you see today? It would also be helpful to know how much price you expect to see in Q2. We think we can hit low single digit organic growth in Q2. Certainly, things, as Doug alluded to on the call, are trending in that direction, really, as we've started to hit the spring season. With regards to price, I would expect it would be roughly negative 1 to flat in Q2.

Operator: Our next question is coming from the line of Ryan Merkel with William Blair. Please receive your questions.

Ryan Merkel: Hey, everyone. Good morning wanted to start with.

Ryan Merkel: Hey, everyone. Good morning. I wanted to start with your expectation for organic sales growth in Q2. It was great to hear that April, I think, is positive. I'm curious, can you do low single digit organic growth in Q2 just based on what you see today? It would also be helpful to know how much price you expect to see in Q2.

Ryan Merkel: Your expectation for organic sales growth in the second quarter.

Speaker Change: Great to hear that April I think is positive and I'm curious can you do low single digit organic growth in the second quarter just based on what you see today and would also be helpful to know how much price you expect to see in the second quarter.

Ryan Merkel: We think we can hit.

John Guthrie: We think we can hit low single digit organic growth in Q2. Certainly, things, as Doug alluded to on the call, are trending in that direction, really, as we've started to hit the spring season. With regards to price, I would expect it would be roughly negative 1 to flat in Q2.

Ryan Merkel: Low single digit organic growth in the second quarter.

Ryan Merkel: Certainly.

Speaker Change: Things as Doug alluded to on the call things are trending in that direction.

John Guthrie: Certainly, things, as Doug alluded to on the call, things are trending in that direction, really, as we've started to hit the spring season. With regards to price, I would expect it would be roughly, you know, negative one to flat from the second quarter. A lot of the, as Doug alluded to, some of the supplier increases as a result of tariffs are going into effect, probably, midway through the second quarter. Probably we'll see more of those in the second half of the year, but, you know, flat-ish would probably be our estimate for right now for price in the second quarter.

Ryan Merkel: <unk> really as we've started to the spring season.

Ryan Merkel: With regards to price I would expect it to be roughly.

Ryan Merkel: Negative 1% to flat I'm off.

Ryan Merkel: And that from the second quarter a lot of the as.

Ryan Merkel: As Doug alluded to some of the Hum supplier increases as a result of tariffs are going into effect elderly.

Doug Black: A lot of the, as Doug alluded to, some of the supplier increases as a result of tariffs are going into effect, probably, midway through Q2. Probably we'll see more of those in the second half of the year. But flat-ish would probably be our estimate right now for price in Q2. Okay. That's helpful. And then you mentioned 10% to 15%. I think that was the direct impact from tariffs. That's what you're directly importing. Just, can you give us a few more details there? What products are you importing? Where are they coming from? And how much price is included now in the 2025 guide from tariffs specifically? 10% to 15% is primarily indirect from suppliers, not that we're directly importing. Our direct importing is probably less than 1% or 2% from that standpoint.

John Guthrie: A lot of the, as Doug alluded to, some of the supplier increases as a result of tariffs are going into effect, probably, midway through Q2. Probably we'll see more of those in the second half of the year. But flat-ish would probably be our estimate right now for price in Q2.

Midway through the second quarter.

Ryan Merkel: Probably we'll see more of those in the in the in the Hum in the second half of the year, but but you know flattish would probably would be our estimate for right now for price in the second quarter.

Ryan Merkel: Okay. That's helpful.

Ryan Merkel: And then you mentioned, 10% to 15% I think that was the direct impact from tariffs if thats what youre directly importing just can you give us a few more details there what what products are you importing where are they coming from and how much how much price is included now in the 25 guide from tariffs.

John Guthrie: Okay, that's helpful. And then you mentioned 10 to 15%. I think that was the direct impact from tariffs. That's what you're directly importing. Just can you give us a few more details there? What what products are you importing? Where are they coming from? And how much how much price is is included now in the 25 guide from tariffs specifically? 10 to 15% is primarily indirect from suppliers, not that we're directly importing. Our direct importing is probably less than 1 or 2% from that standpoint, but we know our suppliers have sourcing relationships in Mexico, China, for instance, would be the two largest by far.

Ryan Merkel: Okay. That's helpful. And then you mentioned 10% to 15%. I think that was the direct impact from tariffs. That's what you're directly importing. Just, can you give us a few more details there? What products are you importing? Where are they coming from? And how much price is included now in the 2025 guide from tariffs specifically?

Ryan Merkel: Specifically.

Ryan Merkel: 10% to 15% is primarily indirect brown supplier is not that we're directly importing our direct importing is probably less than one or 2%.

John Guthrie: 10% to 15% is primarily indirect from suppliers, not that we're directly importing. Our direct importing is probably less than 1% or 2% from that standpoint.

From that standpoint, but we know our suppliers has have sourcing relationships and in Mexico, China for instance would be the two largest by far and that's what we're starting to see primarily coming through so our direct importing where we're paying tariffs is a very very small.

Doug Black: But we know our suppliers have sourcing relationships in Mexico, China, for instance, would be the two largest by far. And that's what we're starting to see primarily coming through. So our direct importing, where we're paying tariffs, is a very, very small component of our business, honestly, less than 1%. And the price increases. Yeah. The price increases we're seeing, most of them are less than 10%, probably more in the 4% to 8%. A lot of it's targeted at specific lines that have our source from overseas, from those suppliers. There are a couple of outliers, but it's relatively small business from that standpoint. So I would say almost everything's primarily single digit would be the bulk of the volume. It tends to be irrigation and lighting. Lighting would be some impact.

John Guthrie: But we know our suppliers have sourcing relationships in Mexico, China, for instance, would be the two largest by far. And that's what we're starting to see primarily coming through. So our direct importing, where we're paying tariffs, is a very, very small component of our business, honestly, less than 1%. And the price increases. Yeah. The price increases we're seeing, most of them are less than 10%, probably more in the 4% to 8%. A lot of it's targeted at specific lines that have our source from overseas, from those suppliers. There are a couple of outliers, but it's relatively small business from that standpoint. So I would say almost everything's primarily single digit would be the bulk of the volume. It tends to be irrigation and lighting. Lighting would be some impact.

John Guthrie: And that's what we're starting to see primarily coming through. So our direct importing, where we're paying tariffs, is a very, very small component of our business, honestly less than 1%. And the price increases. Yeah, the price increases we're seeing, most of them are less than 10%, probably more in the 4% to 8%. A lot of it's targeted at specific lines that have our source from overseas from those suppliers. There are a couple of outliers, but it's relatively small business from that standpoint. So I would say almost everything's primarily single digit, would be the bulk of the volume.

Ryan Merkel: <unk> of our business.

Ryan Merkel: Honest way less than 1%.

Ryan Merkel:

Ryan Merkel: And.

Ryan Merkel: The price increases the price increases we are seeing.

Ryan Merkel: Most of them are less than 10%.

Ryan Merkel: Or are they more in the 4% to 8%.

Ryan Merkel: So a lot of it's targeted at specific lines that have are sourced from overseas for most suppliers are a couple of outliers, but it's relatively small a small business from that standpoint.

Ryan Merkel: I would say almost everything's primarily single digit would be the bulk of the volume it tends to be irrigation and lighting lighting.

John Guthrie: It tends to be irrigation and lighting. Some landscape supplies. Irrigation, lighting, and some landscape supplies like drainage, etc. Okay, and you're passing on the price with your margin? That's my last question. Just want to make sure. We plan on doing it. We expect the market historically is priced that way. Awesome.

Ryan Merkel: The impact some landscape supplies, but irrigation lighting and some landscape supplies like draining etc.

Doug Black: Some landscape supplies, but irrigation, lighting, and some landscape supplies like drainage, etc. Okay. And you're passing on the price with your margin. That's my last question. Just want to make sure. We plan on doing it. We expect the market historically is priced that way. Awesome. All right. Thanks. Pass it on. Our next question is from the line of Damian Karas with UBS. Please proceed with your question. Hey. Good morning, everyone. Just a follow-up question on the tariffs. So correct me if I'm wrong, but I think not an insignificant chunk of your supplies are coming from Mexico, that 10% to 15%. I think it's a decent amount coming from there. So just curious, do you know if a lot of those are meeting the USMCA certification, or is kind of the 25% tariff being applied to the majority of that?

John Guthrie: Some landscape supplies, but irrigation, lighting, and some landscape supplies like drainage, etc.

Speaker Change: Okay, you're passing on the price with your margin.

Ryan Merkel: Okay. And you're passing on the price with your margin. That's my last question. Just want to make sure. We plan on doing it.

Speaker Change: Last question just want to make sure we plan on doing it and we expect the market historically is priced that way.

John Guthrie: We expect the market historically is priced that way.

Speaker Change: Alright, Thanks pass it on.

Ryan Merkel: Awesome. All right. Thanks. Pass it on.

Unknown Attendee: All right. Thanks. Pass it on.

Operator: Our next question is from the line of Damian Karas with UBS. Please proceed with your question.

Speaker Change: Our next question is from the line of Damian Karas with UBS. Please proceed with your question.

Damian Karas: Our next questions are from the line of Damian Karas with EVF. Please proceed with your questions. Hey, good morning, everyone. Just a follow up question on the terrace. So correct me if I'm wrong, but I think like, not an insignificant chunk of your supplies are coming from Mexico, you know, of that 10 to 15%, I think it's a decent amount are coming from there. So just curious, like, do you know if a lot of those are meeting like the USMCA certification and, or is kind of like the 25% tariff being applied to the majority of that?

Damian Karas: Hey, good morning, everyone. Just a follow up question on the tariffs.

Damian Karas: Hey. Good morning, everyone. Just a follow-up question on the tariffs. So correct me if I'm wrong, but I think not an insignificant chunk of your supplies are coming from Mexico, that 10% to 15%. I think it's a decent amount coming from there. So just curious, do you know if a lot of those are meeting the USMCA certification, or is kind of the 25% tariff being applied to the majority of that?

Speaker Change: So correct me, if I'm wrong, but I think like not an insignificant chunk of your supplies are.

Speaker Change: Coming from Mexico that 10% to 15%.

Speaker Change: It's a decent amount are coming from there. So just curious like do you do you know if a lot of those are meeting like the U S. MCA.

Speaker Change: Certification and or is kind of like the 25% tariffs being applied to the majority of that.

Speaker Change: So we don't.

John Guthrie: We, so we don't directly pay any, or I would say bring in import stuff from Mexico. So I think my guess is suppliers have a mixture and what's coming through to us is a blend of those as they try to estimate that. Okay, all right.

Speaker Change: Directly.

Doug Black: So we don't directly pay any, or I would say bring in, import stuff from Mexico. So I think my guess is suppliers have a mixture, and what's coming through to us is a blend of those as they try to estimate that. Okay. All right. Well, I guess just thinking about the gross margins outlook now that you are seeing commodity prices stabilize and you're actually getting some positive price elsewhere in the business, how are you thinking about that outlook for your gross margins? It hasn't changed that much for the year yet. I mean, I think we said we expect kind of steady for the full year. So we would expect there's going to be more positive position, I would think, pricing relative to last year. But as Doug alluded to, there is some offset in freight.

John Guthrie: So we don't directly pay any, or I would say bring in, import stuff from Mexico. So I think my guess is suppliers have a mixture, and what's coming through to us is a blend of those as they try to estimate that.

Speaker Change: <unk>.

Speaker Change: Pay any.

Speaker Change: I would say bring in important step from Mexico. So I think I think my guess is suppliers or have a mixture.

Speaker Change: And there and what's coming through to us.

Speaker Change: Is it a blend of those as they as they try to estimate that.

Speaker Change: Okay, all right well I guess, just thinking about the gross margins outlook now that you are seeing commodity prices stabilize and you're actually getting some positive price elsewhere in the business.

Damian Karas: Okay. All right. Well, I guess just thinking about the gross margins outlook now that you are seeing commodity prices stabilize and you're actually getting some positive price elsewhere in the business, how are you thinking about that outlook for your gross margins?

John Guthrie: Well, I guess just thinking about the gross margins outlook now that you are seeing commodity prices stabilize and you're actually, you know, getting some positive price elsewhere in the business. How are you thinking about that outlook for your gross margins? It hasn't changed that much for the year yet. I mean, I think we said we expect kind of steady for the full year. So we would expect, you know, there's some going to be more positive position, I would think, pricing relative to last year. But, you know, as Doug alluded to, there is some offset in freight.

Speaker Change: How are you thinking about that that outlook for you for your gross margins.

Speaker Change: It hasn't changed that much for the year, Yeah. I mean, I think we said, we expect kind of steady for the full year.

John Guthrie: It hasn't changed that much for the year yet. I mean, I think we said we expect kind of steady for the full year. So we would expect there's going to be more positive position, I would think, pricing relative to last year. But as Doug alluded to, there is some offset in freight.

Speaker Change: So we would expect there's going to be more positive position I would think pricing relative to last.

Speaker Change: Last year, but.

Speaker Change: But you know as we as Doug alluded to there is some offset in freight so most of the improvement in this year as we've talked about is going to come on the SG&A leverage line Antoine that we'll have to see where as gross margins progress throughout the year.

Unknown Attendee: So most of the improvement this year, as we've talked about, is going to come on the SG&A leverage line. On from that, we'll have to see where as gross margins progress throughout the year. Understood. All right. Well, good luck. Thanks so much.

Doug Black: So most of the improvement this year, as we've talked about, is going to come on the SG&A leverage line from that. And we'll have to see as gross margins progress throughout the year. Understood. All right. Well, good luck. Thanks so much. Our next question is coming from the line of Charles Perron-Pich with Goldman Sachs. Please proceed with your question. Thank you. Good morning, everyone. First, I want to talk about the inventory levels at the end of the quarter. I think you alluded that they were higher as you're preparing for some price increases across the different products. Can you talk about your approach to inventory management when you're balancing this inflationary pressure against the willingness to pull forward some of that versus the uncertainty on the macro backdrop and managing that inventory for that?

John Guthrie: So most of the improvement this year, as we've talked about, is going to come on the SG&A leverage line from that. And we'll have to see as gross margins progress throughout the year.

Speaker Change: Understood Alright, well good luck. Thanks, so much.

Damian Karas: Understood. All right. Well, good luck. Thanks so much.

Operator: Our next question is coming from the line of Charles Perron-Pich with Goldman Sachs. Please proceed with your question.

Speaker Change: The next question is from the line of Charles Grom.

Charles Perron: The next questions come from the line of Charles Perron, Ph.D. with Goldman Sachs. Please receive your questions. Thank you.

Speaker Change: With Goldman Sachs. Please proceed with your question.

Thank you and good morning, everyone first I want to talk about the inventory levels at the end of the quarter. I think you alluded that there were higher and youre preparing for some price increases across.

Charles Perron-Piché: Thank you. Good morning, everyone. First, I want to talk about the inventory levels at the end of the quarter. I think you alluded that they were higher as you're preparing for some price increases across the different products. Can you talk about your approach to inventory management when you're balancing this inflationary pressure against the willingness to pull forward some of that versus the uncertainty on the macro backdrop and managing that inventory for that?

John Guthrie: Good morning, everyone. First, I want to talk about the inventory levels at the end of the quarter. I think you alluded that they were higher as you're preparing for some price increases across the different products. Can you talk about your approach to inventory management, you know, when you're can telling this inflationary pressures against the willingness to, you know, pull forward some of that versus, you know, the uncertainty on the macro backdrop and, you know, managing that inventory for that. We've been selective in identifying areas early on that we thought were at risk and specific products to try to get supply in at lower cost, but also even risk of disruptions in the supply chain.

Speaker Change: The different products.

Speaker Change: Can you talk about your approach to inventory management whenever you can tell in this.

Speaker Change: <unk> pressured against their willingness to.

Speaker Change: Pull forward some of that versus you know the uncertainty on the macro backdrop and you imagine Benjamin Thank you for that.

Speaker Change: We've been selective in identifying areas. It early on that we thought were at risk and specific products.

Doug Black: We've been selective in identifying areas early on that we thought were at risk and specific products to try to get supply in at lower cost, but also even risk of disruption in the supply chain. So especially, for example, products that potentially come from China to try to buy ahead on those specific items where possible. It's not always possible to get everything ahead, but certainly, we've been trying to be selective and be smart about getting inventory in so we can service our customers with that product. Okay. That's helpful. And maybe second, you alluded to a softer M&A pipeline potentially this year given the macro environment. Again, just how do you balance building cash to fund your future acquisition pipeline over time relative to using some of that for share repurchases and other use of capital allocation in light of the recent stock performance?

John Guthrie: We've been selective in identifying areas early on that we thought were at risk and specific products to try to get supply in at lower cost, but also even risk of disruption in the supply chain. So especially, for example, products that potentially come from China to try to buy ahead on those specific items where possible. It's not always possible to get everything ahead, but certainly, we've been trying to be selective and be smart about getting inventory in so we can service our customers with that product.

Speaker Change: To try to get.

Speaker Change: Supply in at a lower cost, but also EBIT, even risk of disruption in the supply chain. So.

Speaker Change: Especially you know for example.

John Guthrie: So, you know, especially, you know, for example, products that, you know, potentially come from China to try to buy ahead on those specific items where possible. It's not always possible to get everything ahead, but certainly we've been trying to be selective and be smart about getting inventory in so we can service our customers with that product.

Speaker Change: Alex.

Speaker Change: Potentially come from China.

Speaker Change: To try to to buy ahead on those specific items.

Speaker Change: Where possible.

Speaker Change:

Speaker Change: Not always possible to get everything ahead, but certainly we've been we've been.

Speaker Change: Trying to be selective and be smart about.

Speaker Change: Getting inventory and so we can service our customers.

Speaker Change: With that product.

Speaker Change: Okay. That's helpful and maybe set and you know you alluded a softer M&A pipeline potentially this year given the macro environment.

Unknown Attendee: Okay, that's helpful.

Charles Perron-Piché: Okay. That's helpful. And maybe second, you alluded to a softer M&A pipeline potentially this year given the macro environment. Again, just how do you balance building cash to fund your future acquisition pipeline over time relative to using some of that for share repurchases and other use of capital allocation in light of the recent stock performance?

John Guthrie: And maybe second, you know, you alluded a software M&A pipeline potentially this year, given the macro environment. Again, just how do you balance your building cash to fund your future acquisition pipeline over time, relative to using some of that to for shareware purchases and other use of capital allocation in light of the recent stock performance? Oh, well, it's always a balance. We're very selective. Obviously, we think growth of this business and good investments in acquisitions is still our primary focus. But certainly, when the stock performance is there, it lends itself to buying more and repurchasing shares from that standpoint.

Speaker Change: How do you balance your building cash to fund your future acquisition pipeline over time relative to using some of that for share repurchases and other uses of capital allocation in light of the recent performance.

Speaker Change: Oh Wow.

Speaker Change: It's always a balance where we're very selective obviously, we think growth of this business and good investments and acquisitions.

Doug Black: Well, it's always a balance. We're very selective. Obviously, we think growth of this business and good investments in acquisitions is still our primary focus. But certainly, when the stock performance is there, it lends itself to buying more and repurchasing shares from that standpoint. So we do have, but we have a very strong balance sheet. We will continue to maintain a strong balance sheet and deploy our capital right now. Certainly, at this level of a stock price, share repurchases obviously become more attractive and supporting that from that perspective. Our next question is from the line of Mike Dahl with RBC Capital Markets. Please proceed with your questions. Morning. Thanks for taking my questions. I want to follow up on the gross margin discussion.

John Guthrie: Well, it's always a balance. We're very selective. Obviously, we think growth of this business and good investments in acquisitions is still our primary focus. But certainly, when the stock performance is there, it lends itself to buying more and repurchasing shares from that standpoint. So we do have, but we have a very strong balance sheet. We will continue to maintain a strong balance sheet and deploy our capital right now. Certainly, at this level of a stock price, share repurchases obviously become more attractive and supporting that from that perspective.

Speaker Change: Still our primary focus but certainly.

Speaker Change: When the stock performances, there it lends itself to to buying more in repurchasing shares from that standpoint until we do have a we have a very strong balance sheet. We will continue to maintain a strong balance sheet.

John Guthrie: So we do have we have a very strong balance sheet, we will continue to strong balance sheet and deploy our capital right now. Certainly, at this level of a stock price, share repurchases obviously become more attractive and supporting that from that perspective.

Speaker Change: And deploy our capital.

Speaker Change: Right now certainly at this level of our stock price.

Speaker Change: Share repurchases, obviously become more attractive.

Speaker Change: And supporting that from that perspective.

Operator: Our next question is from the line of Mike Dahl with RBC Capital Markets. Please proceed with your questions. Morning.

Speaker Change: Our next questions are from the line of Mike Dahl with RBC capital markets. Please proceed with your question.

Mike Dahl: Our next questions are from the line of Mike Dahl with RBC Capital Markets.

John Guthrie: Please receive your questions. Morning. Thanks for taking my questions. I want to follow up on the gross margin discussion. I know it's kind of a slight downshift, but last quarter, I think you talked about gross margins being up year on year, and now you're saying similar. Trying to understand the moving pieces a little bit better. It sounds like you think you can pass through the pricing with your normal margin and pricing turning positive. The freight dynamic, I would think if some of that's preloading, then that normalizes out over the course of the year.

Mike Dahl: Good morning, Thanks for taking my questions.

Mike Dahl: Thanks for taking my questions. I want to follow up on the gross margin discussion.

Mike Dahl: I want to follow up on the gross margin discussion you know.

Mike Dahl: I know, it's kind of a slight downshift, but last quarter I think you talked about gross margins being up year on year and now you are saying similar I'm trying to understand the moving pieces a little bit better. It sounds like you think you can pass through the pricing with your normal.

Doug Black: I know it's kind of a slight downshift, but last quarter, I think you talked about gross margins being up year-over-year, and now you're saying similar. Trying to understand the moving pieces a little bit better. It sounds like you think you can pass through the pricing with your normal margin and pricing turning positive. The freight dynamic, I would think if some of that's kind of preloading, then that normalizes out over the course of the year. But maybe just help us a little bit more with how you're thinking about the kind of pros and cons of the flatter margin guide. Yeah. So our flatter margin guide, I would say some of that's already been realized. I would say January and February, our price realization was a little less. I think some of the things you pointed out are correct from the standpoint that freight.

Mike Dahl: I know it's kind of a slight downshift, but last quarter, I think you talked about gross margins being up year-over-year, and now you're saying similar. Trying to understand the moving pieces a little bit better. It sounds like you think you can pass through the pricing with your normal margin and pricing turning positive. The freight dynamic, I would think if some of that's kind of preloading, then that normalizes out over the course of the year. But maybe just help us a little bit more with how you're thinking about the kind of pros and cons of the flatter margin guide.

Mike Dahl: Margin.

Mike Dahl: On pricing turning positive.

Mike Dahl: The freight dynamic I would think if some of that is kind of pre loading then that normalizes out over the course of the year.

Mike Dahl: But maybe just help us a little bit more with how youre thinking about the pros.

John Guthrie: Maybe just help us a little bit more with how you're thinking about the pros and cons of the flatter margin guide. Yeah, so a flatter margin, I would say some of that's already been realized. I would say January and February pricing came in, our price realization was a little less. I think some of the things you pointed out are correct from the standpoint that freight, we still expect it to be up somewhat throughout the year, but maybe some of the, it was a little bit higher probably because of pre-purchasing in the quarter. And then we plan on passing through most of the price increases.

Mike Dahl: Pros and cons.

Mike Dahl: Flatter margin guide.

Speaker Change: Yeah. So a flatter margin guide I would say some of Thats already been realized I would say January and February.

John Guthrie: Yeah. So our flatter margin guide, I would say some of that's already been realized. I would say January and February, our price realization was a little less. I think some of the things you pointed out are correct from the standpoint that freight.

Speaker Change: On pricing came in on our price realization was a little less I.

Speaker Change: I think some of the things you pointed out are correct.

Speaker Change: From the standpoint that that freight and we still expect it to be up somewhat throughout the year, but maybe some of the.

Doug Black: We still expect it to be up somewhat throughout the year, but maybe some of it was a little bit higher, probably, because of pre-purchasing in the quarter. And then we plan on passing through most of the price increases. I mean, in the scheme of things, going from only up 100 basis points, we're not seeing a huge increase in price relative to, certainly, in comparison to what we saw two or three years ago from that standpoint. So in general, I think our forecast is relatively flat. We don't have a big input from new acquisitions right now coming in in the second half of this year to drive it. So it's relatively flat. I think most of it kind of was slightly up going into the year. It's now relatively flat, and we'll have to see how it plays out throughout the rest of the year.

John Guthrie: We still expect it to be up somewhat throughout the year, but maybe some of it was a little bit higher, probably, because of pre-purchasing in the quarter. And then we plan on passing through most of the price increases. I mean, in the scheme of things, going from only up 100 basis points, we're not seeing a huge increase in price relative to, certainly, in comparison to what we saw two or three years ago from that standpoint. So in general, I think our forecast is relatively flat. We don't have a big input from new acquisitions right now coming in in the second half of this year to drive it. So it's relatively flat. I think most of it kind of was slightly up going into the year. It's now relatively flat, and we'll have to see how it plays out throughout the rest of the year.

Speaker Change: Little bit higher probably because of pre purchasing in the quarter.

Speaker Change: And then we plan on on on passing through most of the price increases I mean in the scheme of things you know going from a <unk> only up 100 basis points, we're not seeing a huge increase.

John Guthrie: I mean, in the scheme of things, going from only up 100 basis points, we're not seeing a huge increase in price relative to, certainly in comparison to what we saw two or three years ago from that standpoint. So in general, I think our forecast is relatively flat. We don't have a big input from new acquisitions right now coming in in the second half of this year to drive it. So it's relatively flat. I think most of kind of the, it was slightly up going into the year.

Speaker Change: The increase in price relative to you know.

Speaker Change: Certainly in comparison to what we saw two or three years ago from that standpoint, So in general I think our our our our forecast is relatively flat, we don't have a big input from from new acquisitions right now.

Speaker Change: Coming in in the second half of this year to drive it. So it's relatively flat I think most of kind of it was.

Slightly up going into the year, it's no relatively flat and we'll have to see how it plays out throughout the rest of the year.

John Guthrie: It's now relatively flat and we'll have to see how it plays out throughout the rest of the year.

Speaker Change: Okay, and then just shifting gears the end market commentary.

Doug Black: Okay, and then just shifting gears, the end market commentary, the new residential in particular, expecting kind of flattish completions, starts are certainly down, year to date, the builders seem to be recalibrating based on weaker order trends, closing guides have come down. So, you know, help us understand a little bit more how you're, how you're thinking about, like, there's got to be an underlying starts assumptions, even though you're, you know, you're tied more to completion. So how are you thinking about that? And how has that progressed as the year has gone on so far? Yeah, well, we're, you know, we're, we're seeing kind of steady demand.

Doug Black: Got it. Okay. And then, just shifting gears, the end-market commentary. The new residential, in particular, expecting kind of flat-ish completions. Starts are certainly down year to date. The builders seem to be recalibrating based on weaker order trends. Closing guides have come down. So help us understand a little bit more how you're thinking about that. There's got to be an underlying starts assumptions even though you're tied more to completion. So how are you thinking about that, and how has that progressed as the year has gone on so far? Yeah. Well, we're seeing kind of steady demand. I mean, the starts that have been flat-ish. I mean, they were up year over year in March. So that's been choppy. Quite frankly, we're getting mixed feedback for the second half. I mean, some builders are saying they're going to be down. They're going to put less in, less completion.

Mike Dahl: Got it. Okay. And then, just shifting gears, the end-market commentary. The new residential, in particular, expecting kind of flat-ish completions. Starts are certainly down year to date. The builders seem to be recalibrating based on weaker order trends. Closing guides have come down. So help us understand a little bit more how you're thinking about that. There's got to be an underlying starts assumptions even though you're tied more to completion. So how are you thinking about that, and how has that progressed as the year has gone on so far?

Speaker Change: New residential in particular expecting kind of flattish completions starts are certainly down.

Speaker Change: Year to date, the builders seem to be Recalibrated based on weaker order trend.

It was that you guys have come down so.

Speaker Change: Help us understand a little bit more and how you're how you're thinking about like theres got to be in under I start with some shouldn't even though you're you're tied more to completion. So how are you thinking about that in <unk>.

Speaker Change: How has that progressed as the year has gone on so far.

Speaker Change: Yeah, well, we're you know we're we're.

Speaker Change: We're seeing steady demand.

Doug Black: Yeah. Well, we're seeing kind of steady demand. I mean, the starts that have been flat-ish. I mean, they were up year over year in March. So that's been choppy. Quite frankly, we're getting mixed feedback for the second half. I mean, some builders are saying they're going to be down. They're going to put less in, less completion.

Speaker Change: This starts that have been flattish I mean, they were up year over year in March.

Doug Black: I mean, you know, there's starts that have been flattish. I mean, they were up year over year in March. You know, so that's that's been choppy. We're quite frankly, we're getting mixed feedback. For the second half. I mean, some some builders are saying they're going to be down, you're going to they're going to put less in less completion, some are saying up. And so it feels flattish to us.

Speaker Change: So that's that's been choppy.

Speaker Change: We're quite frankly, we're getting mixed feedback.

Speaker Change: For the second half I mean, some some builders are saying theyre going to be down youre going to they're going to put less in less completions. Some are saying up and so if it feels flattish to us, but we are there's high uncertainty both in that and the commercial market. So we're watching it closely.

Doug Black: Some are saying up. And so it feels flat-ish to us, but there's high uncertainty both in that and the commercial market. So we're watching it closely. We haven't seen a significant drop yet, and the information we're getting is mixed. It's not all down. We're getting mixed information. So a lot of uncertainty. Certainly, there's potential downside there, we feel, with our ability to gain share and with the balancing strength of the maintenance and the commercial market that seems very solid. There's puts and takes, and overall, our guidance is flat to down slightly. That's our best outlook for right now. Got it. All right. Thanks, Mike. Our next question is from the line of Matthew Bouley with Barclays. Please proceed with your question. Hey. Good morning, everyone. Thanks for taking the questions.

Doug Black: But we we there's high uncertainty, both in that and the commercial market. So we're watching it closely. We haven't seen a significant drop yet, and the information we're getting is mixed. It's not all down. We're getting mixed information, so a lot of uncertainty. Certainly there's potential downside there.

Speaker Change: <unk>.

Speaker Change: We haven't seen a significant drop yet and the information we're getting is mixed it's not.

It's not all down.

Speaker Change: We're getting mixed information so a lot of uncertainty certainly there's.

Speaker Change: Theres potential downside there.

Speaker Change: Feel with our ability to gain share and with the balance and strength of the maintenance and the commercial market that seems very solid.

Doug Black: We feel with our ability to gain share and with the balancing strength of the maintenance and the commercial market that seems very solid, there's puts and takes, and overall our guidance flat to down slightly, that's our best outlook for right now. Got it. Okay, thanks.

Speaker Change:

Speaker Change: And takes.

Speaker Change: Overall, our guidance flat to down slightly.

Speaker Change: Best outlook for for right now.

Speaker Change: Yeah.

Speaker Change: Got it alright, thanks a lot.

Mike Dahl: Got it.

Doug Black: All right. Thanks, Mike.

Operator: Our next question is from the line of Matthew Bouley with Barclays. Please proceed with your question.

Speaker Change: Our next questions are from the line of Matthew Bouley with Barclays. Please proceed.

Matthew Bouley: Our next question is in the line of Matthew Bouley with Barclays. Please proceed with your question. Hey, morning everyone. Thanks for taking the questions. So I guess sticking on the end market side, you know, it sounds like your guidance changes reflecting kind of what you've seen to date and obviously customer feedback as you've just mentioned. My question is to what degree is that also thinking about kind of the elasticity coming from these incremental price increases? I'm curious if there's any either historical context or just general thoughts on how volume, you know, could react to these, you know, 4 to 8% type price increases on those type of products.

Matthew Bouley: Hey, good morning, everyone. Thanks for taking the questions. So.

Matthew Bouley: Hey. Good morning, everyone. Thanks for taking the questions.

Matthew Bouley: So I guess sticking on the end market side. It sounds like your guidance changes, reflecting kind of what you've seen to date and obviously customer feedback as you've just mentioned.

Doug Black: So I guess sticking on the end-market side, it sounds like your guidance change is reflecting kind of what you've seen to date and obviously customer feedback, as you've just mentioned. My question is, to what degree is that also thinking about kind of the elasticity coming from these incremental price increases? I'm curious if there's any either historical context or just general thoughts on how volume could react to these 4% to 8% type price increases on those type of products. Thank you. Yes. Well, one thing to keep in mind is that when you're looking at an installed landscaping job, the material cost of that is only about 10% to 25% of that job. Most of that is your contractor labor and their operating expense, etc. Right?

Matthew Bouley: So I guess sticking on the end-market side, it sounds like your guidance change is reflecting kind of what you've seen to date and obviously customer feedback, as you've just mentioned. My question is, to what degree is that also thinking about kind of the elasticity coming from these incremental price increases? I'm curious if there's any either historical context or just general thoughts on how volume could react to these 4% to 8% type price increases on those type of products. Thank you.

Matthew Bouley: My question is to what degree is that also thinking about kind of the elasticity coming from these incremental price increases I'm curious if there's any either historical context or just general thoughts on how volume could react to these.

Matthew Bouley: 4% to 8% type price increases on those type of products. Thank you.

Matthew Bouley: Yes, well you know one thing to keep in mind is that when you're looking at our install of landscaping.

Doug Black: Thank you. Yes, well, you know, one thing to keep in mind is that when you're looking at an installed landscaping job. You know, the material cost of that is only about 10 to 25% of that job. Most of that is your contractor labor, and their operating expense, etc. Right. So, you know, if you take a 4% increase, you know, 5% increase, that's going to turn into a 1% inflation on that, on that total job. So the material movements don't tend to impact demand, just because it's, it has a smaller impact on that, you know, demand in landscaping is more impacted by labor, inflation, and those kind of things.

Doug Black: Yes. Well, one thing to keep in mind is that when you're looking at an installed landscaping job, the material cost of that is only about 10% to 25% of that job. Most of that is your contractor labor and their operating expense, etc. Right?

Matthew Bouley: Job.

Matthew Bouley: The material cost of that is only about 10% to 25% of that job. Most of that is your contractor labor and their operating expense et cetera, right. So.

Matthew Bouley: If you take a 4% increase.

Doug Black: So if you take a 4% increase, 5% increase, that's going to turn into a 1% inflation on that total job. So the material movements don't tend to impact demand just because it has a smaller impact on that. Demand in landscaping is more impacted by labor inflation and those kind of things. So that's been our history. We haven't seen price increases like this dampen demand. I think the more important risk to demand is the uncertainty that's in the market, consumer confidence, etc. And we do think that's affecting the remodel market, as we had mentioned. And that's the bigger risk for us, not material price increases, especially the magnitude of the increases we're seeing announced. Okay. Got it, Doug. Thank you for that. And then secondly, going down to the commodity products, maybe we just take them kind of one by one.

Matthew Bouley: 5% increase that's going to turn into a 1% inflation on that on that total job. So the material movements don't tend to impact.

Matthew Bouley: Demand just because it's it has a smaller.

Matthew Bouley: Impact on that demand and landscaping is more impacted by labor inflation and those kind of things. So that's that's been our history. We haven't seen price increases like this dampened demand I think the more important risks the demand as the uncertainty that's in the market consumer confidence et cetera.

Doug Black: So that's, that's been our history. We haven't seen price increases like this dampen demand. I think the more important risk to demand is the uncertainty that's in the market, consumer confidence, etc. And we do think that's affecting the remodel market, as we had mentioned, and that's the bigger risk for us, not material price increases, especially the magnitude of the increases we're seeing announced.

Matthew Bouley: And we do think that's affecting the remodel.

Matthew Bouley: Market as we had mentioned and that's the bigger risk for us.

Matthew Bouley: Not material price increases, especially at the.

Matthew Bouley: The magnitude of the increases we're seeing are announced.

Speaker Change: Okay got it Doug Thank you for that and then.

Matthew Bouley: Okay. Got it, Doug. Thank you for that. And then secondly, going down to the commodity products, maybe we just take them kind of one by one.

Unknown Attendee: Okay. Got it, Doug. Thank you for that.

Speaker Change: Secondly, going down to the commodity products, maybe we just take them one by one it sounded like PVC was maybe down year over year similar to what you saw in Q4.

John Guthrie: And then secondly, going down to the commodity products, maybe we just take them kind of one by one. Sounded like PVC was maybe down year-over-year similar to what you saw in Q4. You know, fertilizer, I didn't hear you call out, and then grass seed maybe was down a little bit less. So, I guess just what are you seeing on a sequential basis across those three categories? And specifically, you know, how are you thinking the grass seed part of it may turn out as that gets repriced this year? Thank you. We have built into our guidance, and this, with regards to both of those items, it does not, hasn't really changed from the first quarter.

Doug Black: Sounded like PVC was maybe down year-over-year, similar to what you saw in Q4. Fertilizer, I didn't hear you call out, and then grass seed maybe was down a little bit less. So I guess just what are you seeing on a sequential basis across those three categories and specifically how are you thinking the grass seed part of it may turn out as that gets repriced this year? Thank you. We have built-in tariff guidance. With regards to both of those items, it hasn't really changed from the first quarter from that standpoint. We do have a single-digit decrease in grass seed built into our guidance. Then PVC, we do expect some additional decreases this year in PVC pipe, and that's still in our guidance. Maybe not. We're running on PVC specifically down 20% year-over-year.

Matthew Bouley: Sounded like PVC was maybe down year-over-year, similar to what you saw in Q4. Fertilizer, I didn't hear you call out, and then grass seed maybe was down a little bit less. So I guess just what are you seeing on a sequential basis across those three categories and specifically how are you thinking the grass seed part of it may turn out as that gets repriced this year? Thank you.

Speaker Change: Fertilizer I didn't hear you call out and then grass seed maybe it was down a little bit less so I guess, just what are you seeing on a sequential basis across those three categories and specifically how are you thinking that the grass seed.

Speaker Change: Part of it may turn out as that gets repriced. This year. Thank you.

Speaker Change: We have built into our guidance in this.

John Guthrie: We have built-in tariff guidance. With regards to both of those items, it hasn't really changed from the first quarter from that standpoint. We do have a single-digit decrease in grass seed built into our guidance. Then PVC, we do expect some additional decreases this year in PVC pipe, and that's still in our guidance. Maybe not. We're running on PVC specifically down 20% year-over-year.

Speaker Change: In regards to both of those items. It does not hasnt really changed from the first quarter.

Speaker Change: From that standpoint, we do have a single digit decrease in grass seed is built into our guidance.

John Guthrie: From that standpoint, we do have a single-digit decrease in grass seed built into our guidance. And then PVC, we do expect some additional decreases this year in PVC pipe, and that's still in our guidance. Maybe not, you know, running on PVC specifically down 20% year over year. I don't think, you know, exiting this year, you would expect to see, you know, an additional 20% down, but certainly those two items would probably be deflationary for the fall year.

Speaker Change: And then PVC, we do expect some additional decreases this year and PVC pipe and that's still in our guidance, maybe not we're running on PVC specificity down 20% year over year I don't think you know exiting this year you would expect to see an additional 20.

Doug Black: I don't think exiting this year, you would expect to see an additional 20% down. But certainly, those two items would probably be deflationary for the full year. Okay. Thanks, John. Good luck, guys. Thank you. Our next question is from the line of Andrew Carter with Stifel. Please go ahead with your question. Hey. Thank you. Good morning. First question I wanted to ask is kind of in terms of the tariffs. I mean, where are you right now in terms of sophistication as an organization to kind of look at your suppliers when they come to you with increases and kind of know where they're coming from and therefore be able to push back if you want to? Because given I know you said that the end market, but it's your customers that you have to attract.

John Guthrie: I don't think exiting this year, you would expect to see an additional 20% down. But certainly, those two items would probably be deflationary for the full year.

Speaker Change: <unk> went down, but but certainly those two items.

Speaker Change: It would probably be deflationary for the full year.

Speaker Change: Okay.

Speaker Change: Okay. Thanks, John and good luck guys.

Matthew Bouley: Okay. Thanks, John. Good luck, guys.

Unknown Attendee: Okay. Thanks, John. Good luck, guys. Thank you.

Operator: Thank you. Our next question is from the line of Andrew Carter with Stifel. Please go ahead with your question.

Speaker Change: Thank you.

Speaker Change: Next question is from the line of Andrew cargo Stifel. Please proceed with your question.

Andrew Carter: Your next question is from the line of Andrew Carter, CFO. Please issue your question. Hey, thank you. Good morning.

Speaker Change: Hey, Thank you. Good morning first question I wanted to ask is it kind of in terms of the tariffs I mean, where are you right now in terms of sophistication as an organization to kind of look at your suppliers when they come to you with increases in kind of know where they're coming from and therefore.

Andrew Carter: Hey. Thank you. Good morning. First question I wanted to ask is kind of in terms of the tariffs. I mean, where are you right now in terms of sophistication as an organization to kind of look at your suppliers when they come to you with increases and kind of know where they're coming from and therefore be able to push back if you want to? Because given I know you said that the end market, but it's your customers that you have to attract.

Andrew Carter: First, the question I wanted to ask is kind of in terms of the tariffs, I mean, where are you right now in terms of sophistication as an organization to kind of look at your suppliers when they come to you with increases and kind of know where they're coming from, and therefore, you know, be able to push back if you want to, because given, you know, I know you said that the end market, but it's your customers you have to attract, you know, do you have, do you see any incremental sensitivity to pricing, especially in this round, when demand's a little weaker?

Speaker Change: Be able to push back if you want to because given I know you said that the end market, but it's your customers do you have to attract do.

Speaker Change: Do you have do you see any incremental sensitivity pricing, especially in this round when demands a little weaker than I guess I would also argue home depot now owns heritage kind of the largest competitor they've already kind of been aggressive any risks. Thank you there. Thanks.

Doug Black: Do you see any incremental sensitivity to pricing, especially in this round when demand's a little weaker? And I guess I would also argue Home Depot now owns Heritage, kind of the largest competitor. They've already kind of been aggressive. Any risks think-through there? Thanks. Yeah. I think we manage our suppliers as aggressively as anybody. Obviously, we're the leader in the industry. We're significantly larger than everybody else. And so we are very in tune to their input costs. And when they announce increases, we negotiate, obviously, accordingly. So. And just that's an ongoing strength of ours. I would also say our suppliers are very in tune with that also. They are looking closely at demand, and our partnerships are long and deep, and they've been in this industry for a long time.

Andrew Carter: Do you see any incremental sensitivity to pricing, especially in this round when demand's a little weaker? And I guess I would also argue Home Depot now owns Heritage, kind of the largest competitor. They've already kind of been aggressive. Any risks think-through there? Thanks.

Doug Black: And I guess I would also argue Home Depot now owns Heritage, kind of the largest competitor. They've already kind of been aggressive. Any risks think through there. Thanks. Yeah, I think we manage our suppliers as aggressively as anybody. Obviously, we're the leader in the industry. We're we're significantly larger than everybody else. And so we We're very in tune to, you know, their input costs, and, you know, when they announce increases, you know, we negotiate, obviously, accordingly. So, just, that's an ongoing strength of ours. I would also say our suppliers are very in tune with that also.

Yeah, I think we manage our suppliers as aggressively as anybody obviously, we're the leader in the industry or.

Doug Black: Yeah. I think we manage our suppliers as aggressively as anybody. Obviously, we're the leader in the industry. We're significantly larger than everybody else. And so we are very in tune to their input costs. And when they announce increases, we negotiate, obviously, accordingly. So. And just that's an ongoing strength of ours.

Speaker Change: We're significantly larger than everybody else and so we.

Speaker Change: We are very in tuned to their input costs and.

Speaker Change: When they announced increases.

Speaker Change: We negotiate obviously accordingly so.

Speaker Change: That's an ongoing strength of ours.

Speaker Change: I would also say our suppliers are very in tune with that at all so they know.

John Guthrie: I would also say our suppliers are very in tune with that also. They are looking closely at demand, and our partnerships are long and deep, and they've been in this industry for a long time.

Speaker Change: We are looking closely at at demand.

Doug Black: They know, are looking closely at demand and are not, they're, our partnerships are long and deep, and they've been in this industry for a long time, and they're not, they're very cognizant of the current economic environment and not, and are thinking very carefully on the price increase when they're coming. And then, you know, the Home Depot and Lowe's, I mean, obviously, they're titans in retail. But, you know, the heritage division of that is, you know, we're significantly larger than them. And, you know, our suppliers. are serving the professional landscape industry, you know, that's certainly a different route to market than the retail to the consumer.

Speaker Change: They are not there.

Speaker Change: Our partnerships are long and deep and they're they've been in this industry for a long time and they're not they're very cognizant of the current economic environment and not in our thinking very carefully.

Doug Black: They're very cognizant of the current economic environment and are thinking very carefully on the price increases when they're coming. And then The Home Depot and Lowe's, I mean, obviously, they're titans in retail, but the Heritage division of that, we're significantly larger than them. And our suppliers are serving the professional landscape industry. That's certainly a different route to market than the retail to the consumer. Second one I'll ask since you're on the front line, and it's been brought up less and less on calls given tariffs, the kind of labor kind of issue and kind of the risk to that, is there anything you're incremental you're seeing out there in terms of uncertainty from your customers or their pain points?

John Guthrie: They're very cognizant of the current economic environment and are thinking very carefully on the price increases when they're coming.

Speaker Change: On the price increase it's one of their company.

Speaker Change: And then the home depot and Lowe's I mean, obviously, they're there tightens in retail but.

Doug Black: And then The Home Depot and Lowe's, I mean, obviously, they're titans in retail, but the Heritage division of that, we're significantly larger than them. And our suppliers are serving the professional landscape industry. That's certainly a different route to market than the retail to the consumer.

Speaker Change: The heritage Division of that.

Speaker Change: We're significantly larger.

Speaker Change: Then them then.

Speaker Change: Our suppliers.

Speaker Change: Our serving the professional landscape industry.

Speaker Change: That's certainly a different route to market than our than the retail to the consumer.

Andrew Carter: Second one I'll ask since you're on the front line, and it's been brought up less and less on calls given tariffs, the kind of labor kind of issue and kind of the risk to that, is there anything you're incremental you're seeing out there in terms of uncertainty from your customers or their pain points?

Second one and I'll ask since you're on the frontline and its been brought up less and less on calls can the terrorists.

Doug Black: Second one I'll ask, since you're on the front line, and it's been brought up less and less on calls, given tariffs, the kind of labor kind of issue and kind of the risk to that, is there anything incremental you're seeing out there in terms of uncertainty from your customers or just their pain points, and just remind us if things get tighter, do you see that as an advantage given the time savings you do, or just a risk that goes to everybody? Thanks. Yeah, no, good question. I mean, we have not seen significant labor disruption in the market.

Speaker Change: <unk> kind of labor kind of issue and kind of the risk to that is there anything you're incremental incremental youre seeing seen out there in terms of uncertainty from your customers or just their pain points and just remind us if things get tighter do you see those advantage given the time savings you do or just a risk that that goes to everybody. Thanks.

Doug Black: Just remind us if things get tighter, do you see that as an advantage given the time savings you do or just a risk that goes to everybody? Thanks. Yeah. No. Good question. I mean, we have not seen significant labor disruption in the market. Our customers have labor. Labor's always been tight in landscaping, and it continues to be so. So that gives us the ability to help our customers be more efficient and add value. So we take advantage of that. But in terms of the deportation and having an impact, we haven't seen it to date. Our customers seem pretty confident that they're going to be able to sustain their work and continue to grow without an unusual constraint of labor. I don't want to say labor's always been, again, tight in the industry, and it's a constant constraint.

Andrew Carter: Just remind us if things get tighter, do you see that as an advantage given the time savings you do or just a risk that goes to everybody? Thanks.

Speaker Change: Yeah No. Good question I mean, we have not seen.

Doug Black: Yeah. No. Good question. I mean, we have not seen significant labor disruption in the market. Our customers have labor. Labor's always been tight in landscaping, and it continues to be so. So that gives us the ability to help our customers be more efficient and add value. So we take advantage of that. But in terms of the deportation and having an impact, we haven't seen it to date. Our customers seem pretty confident that they're going to be able to sustain their work and continue to grow without an unusual constraint of labor. I don't want to say labor's always been, again, tight in the industry, and it's a constant constraint.

Speaker Change: The significant labor disruption.

Speaker Change: And the market our customers have have labor labor is always been tight and landscaping and it continues to be so so that's.

Doug Black: Our customers have labor. Labor has always been tight and landscaping and it continues to be so. So that's, that gives us the ability to help our customers be more efficient and add value. So we take advantage of that. But in terms of, you know, deportion and having an impact, we haven't seen it today. Our customers seem pretty confident that they're going to be able to sustain their work and, and continue to grow without, you know, without an unusual constraint of labor. I don't want to say labor has always been again, tight in the industry, and it's a constant constraint.

Speaker Change: That gives us the ability to help our customers be more efficient and add value. So so we'd take advantage of that but.

But in terms of the.

Speaker Change: The portion and having an impact we havent seen it today there are customers, saying.

Speaker Change: Pretty confident that they're going to be able to.

Speaker Change: Sustained there, they're working and continue to grow.

Speaker Change: Without.

Speaker Change: That without an unusual constraint of labor I don't want to say lay flavors always been again tight in the industry and it's a constant constraint and so we work with our customers to help them be more productive.

Doug Black: And so we work with our customers to help them be more productive.

Doug Black: And so we work with our customers to help them be more productive. Thanks. I'll pass it on. The next question is from the line of Collin Verron with Deutsche Bank. Please receive your questions. Good morning, Doug. Thank you for taking my questions. I just wanted to concentrate a little bit on the cost actions you're taking. I'd be curious as to how much of a benefit you're expecting from those cost actions, like your concentration on the underperforming branches in 2025. And if the end market softens more than you're expecting right now, how much of those cost actions are still attainable, and what does the decremental margin look like in the underlying business? Well, a lot of that is already built into our guidance.

Doug Black: And so we work with our customers to help them be more productive.

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

Andrew Carter: Thanks. I'll pass it on.

Unknown Attendee: Thanks, I'll pass it on. The next question is from the line of Colin Vernon with Deutsche Bank.

Operator: The next question is from the line of Collin Verron with Deutsche Bank. Please receive your questions.

Speaker Change: The next question is from the line of Colin Brian with Deutsche Bank. Please proceed with your.

Speaker Change: Questions.

Speaker Change: Good morning. Thank you for taking my questions I, just wanted to concentrate a little bit on the cost actions you're taking.

Colin Vernon: Please receive the question.

Operator: Good morning, Doug. Thank you for taking my questions. I just wanted to concentrate a little bit on the cost actions you're taking. I'd be curious as to how much of a benefit you're expecting from those cost actions, like your concentration on the underperforming branches in 2025. And if the end market softens more than you're expecting right now, how much of those cost actions are still attainable, and what does the decremental margin look like in the underlying business?

Colin Vernon: Good morning. Thank you for taking my questions. I just wanted to concentrate a little bit on the cost action you're taking. I'd be curious as to how much of a benefit you're expecting from those cost actions, like your concentration on the underperforming branches in 2025. And if the end market softens more than you're expecting right now, how much of those cost actions are still attainable, and what does the decremental margin look like in the underlying business? Well, a lot of that is already built into our guidance. From that standpoint, if you actually look at what our guidance reflects, most of that improvement, as Doug alluded to, most of our gross margin is going to be steady year-over-year.

Speaker Change: Or is it how much of a benefit you're expecting from those cost actions like your concentration on the underperforming branches and 25.

Speaker Change: And market softens more than Youre expecting right now how much of those cost actions are still attainable and what does the decremental margins look like in the underlying business.

John Guthrie: Well, a lot of that is already built into our guidance.

Speaker Change: Well.

Speaker Change: None of that is already built into our guidance.

Speaker Change: From that standpoint, if you actually look.

Doug Black: From that standpoint, if you actually look at what our guidance reflects, most of that improvement, as Doug alluded to, most of our Gross Margin is going to be steady year-over-year. So most of what you're seeing with regards to the improvement and what's built into our guidance is a result of managing SG&A and achieving higher leverage as a result of the SG&A. It's important to remember, we're still subject to wage inflation. So the cost per employee is going up. The efforts we've taken with our focus branches, delivery, and a number of different initiatives to try to improve productivity is really helping to offset those costs this year. Yeah. Just to comment, if markets soften further, then we have the ability to pull in. Labor is our biggest SG&A item.

John Guthrie: From that standpoint, if you actually look at what our guidance reflects, most of that improvement, as Doug alluded to, most of our Gross Margin is going to be steady year-over-year. So most of what you're seeing with regards to the improvement and what's built into our guidance is a result of managing SG&A and achieving higher leverage as a result of the SG&A. It's important to remember, we're still subject to wage inflation. So the cost per employee is going up. The efforts we've taken with our focus branches, delivery, and a number of different initiatives to try to improve productivity is really helping to offset those costs this year.

Speaker Change: At at.

Speaker Change: What our guidance reflects most of that improvement is as Doug alluded to most of our gross margin is going to be steady year over year and so most of what.

John Guthrie: And so most of what you're seeing with regards to the improvement and what's built into our guidance is a result of managing SG&A and achieving higher leverage as a result of the SG&A. And it's important to remember we're still subject to, you know, wage inflation. So there is the cost per employee is going up. And the efforts we've taken with our focus branches and, you know, delivering a number of different initiatives to try to improve productivity is really helping to offset those costs this year. Yeah, and just a comment, if markets soften further, then we have the ability to pull in, you know, labor is our biggest SG&A item, we do have some other SG&A items that tend to be more, more variable, or semi fixed, if you will, that will obviously will come in.

Speaker Change: Youre seeing with regards to the improvement and what's built into our guidance as a result.

Speaker Change: <unk> of managing SG&A and achieving higher leverage.

Speaker Change: As a result of the.

Speaker Change: SG&A.

Speaker Change: It is important to remember we're still subject to you know wage inflation. So so there is that the cost per employee is going is going up and the efforts we've taken what theyre focused branches.

Speaker Change: And delivery in a number of different initiatives to try to improve.

Speaker Change: Activity.

Speaker Change: It's really helping to offset those cost this year.

Speaker Change: Yes, just a comment if if markets soften further then we have the ability to pull in.

Doug Black: Yeah. Just to comment, if markets soften further, then we have the ability to pull in. Labor is our biggest SG&A item.

Speaker Change: Labor is our biggest SG&A item.

Speaker Change: We do have some other SG&A items that tend to be more more variable or semi fixed if you will that will.

Doug Black: We do have some other SG&A items that tend to be more variable or semi-fixed, if you will, that obviously will come in. But we can pull in labor and not only pull in labor but do it appropriate to the market because if we have less sales, it's likely to be in certain regions, we're going to pull those in. And in other regions where it might be growing, we're going to obviously continue to support those. So yes, we do have the ability to pull in. John, decremental margin, really hard to calculate, but we feel confident in our ability to improve our profitability this year given the market. If it's softer, we can react and still get there. That's helpful, Colin. Thank you. And I guess just pivoting to free cash flow generation, just any guardrails on how you're thinking about that for 2025? No.

Speaker Change: Obviously, it will come in but we can we can pull and labor and not only pulling labor, but do it appropriate to the market because if we have less sales is likely to be in certain regions, we're going to pull those in in other regions, where you where it might be growing we're going to obviously continue to support those so yes, we are.

John Guthrie: But we can we can pull in labor and not only pull in labor, but do it appropriate to the market. Because if we have less sales, it's likely to be in certain regions, we're going to pull those in and in other regions where it might be growing, we're going to obviously continue to support those. So yes, we do have the ability to to pull in. John, decremental margin, really hard to calculate, but we feel confident in our ability to improve our profitability this year. The market, if it's softer, we can react and still get there.

Speaker Change: Do have the ability to.

Speaker Change: So you have to pull in.

John Guthrie: John Decremental margin.

Speaker Change: So it's hard to really hard to calculate.

Speaker Change: But we feel confident in our ability to.

To improve our profitability this year.

Speaker Change: You know given you know the market if it's that the softer we can react and still still get there.

Speaker Change: That's helpful color. Thank you and I guess, just pivoting to free cash flow generation, just any guardrails on how youre thinking about that for 2025.

Unknown Attendee: That's a helpful color. Thank you.

Collin Verron: That's helpful, Colin. Thank you. And I guess just pivoting to free cash flow generation, just any guardrails on how you're thinking about that for 2025? No.

John Guthrie: I guess just pivoting to free cash flow generation, just any guardrails on how you're thinking about that for 2025? No. I mean, we expect to continue to improve cash flow.

Speaker Change: No I mean, we expect to continue to.

Doug Black: I mean, we expect to continue to improve cash flow. I guess the only thing that would be different than normal, and probably by year when it plays out, is we are going to make sure we, given potential supply chain disruptions, that we have sufficient inventory to service our customers this year. But otherwise, we would expect to continue to improve efficiency from a cash flow perspective, but very similar incremental improvements relative to last year, excluding the impact of potentially having a little bit more inventory just to service the customer. All right. Thank you for taking my questions. Thank you. This now concludes our question-and-answer session. I'd like to turn the floor back over to Doug Black for closing comments. Okay. Thank you all for joining us today. We very much appreciate your interest in SiteOne.

Speaker Change: Improved cash flow I guess, the only thing that would be different than normal and I probably by year end. It plays out as we are are going to make sure we.

John Guthrie: I guess the only thing that would be different than normal, and probably by year and it plays out, is we are going to make sure we, given potential supply chain disruptions, that we have sufficient inventory to service our customers this year. But otherwise, you know, I would, we would, we expect to continue to improve efficiency from a cash flow perspective, but very similar incremental improvements relative to last year, excluding the impact of potentially having a little bit more inventory just to service the customer.

Speaker Change: Given potential supply chain disruptions that we have sufficient inventory to service our customers.

Speaker Change: This year, but otherwise we.

Speaker Change: We would expect to continue to improve.

Speaker Change: Improve.

Speaker Change: Efficiency from a cash flow perspective, but very similar.

Speaker Change: Rental improvements.

Speaker Change: Relative to last year, excluding the impact of potentially having a little bit more inventory just to service the customer.

Speaker Change: Alright, Thank you for taking my questions.

Unknown Attendee: All right, thank you for taking my questions.

Collin Verron: All right. Thank you for taking my questions.

Operator: Thank you. This now concludes our question-and-answer session. I'd like to turn the floor back over to Doug Black for closing comments.

Speaker Change: Thank you.

Speaker Change: Concludes our question and answer session I would like to turn the floor back over to Doug Black for closing comments.

Unknown Attendee: Thank you.

Doug Black: This now concludes our question and answer session. I'd like to turn the floor back over to Doug Black for closing comments. Okay, thank you all for joining us today. We very much appreciate your interest in SiteOne. We look forward to speaking to you again.

Speaker Change: Yes.

Speaker Change: Okay. Thank you all for joining US today, we're very much appreciate your interest in <unk>. One we look forward to speaking to you again after the second quarter I just wanted to take one more opportunity to thank our our tremendous associates for all they do for our company and our stakeholders. Thank you.

Doug Black: Okay. Thank you all for joining us today. We very much appreciate your interest in SiteOne.

Doug Black: We look forward to speaking to you again after Q2. I just want to take one more opportunity to thank our tremendous associates for all they do for our company and our stakeholders. Thank you. Thank you. This concludes our conference for today. We thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.

Doug Black: After the second quarter, I just want to take one more opportunity to thank our our tremendous associates for all they do for our company and our stakeholders. Thank you.

Speaker Change: Thank you. This concludes our conference for today. Thank you for your participation you may now disconnect. Your lines at this time and have a wonderful day.

Unknown Attendee: This concludes our conference for today. We thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.

Q1 2025 SiteOne Landscape Supply Inc Earnings Call

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