SiteOne Landscape Supply, Inc. (NYSE:SITE) Q1 2024 Earnings Call Transcript

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Matthew Bouley: Got it. Thanks, Doug. Good luck, guys.

Operator: The next question comes from Andrew Carter with Stifel. Please go ahead.

Andrew Carter: Hi, thank you. Good morning. I wanted to ask about the weather overall for the quarter. Was it a net tailwind? Because you mentioned it helped the maintenance. It hurt in the South in terms of the precipitation but you also had heavy precipitation. And then absent the top line, did the kind of weather mix, I think more into maintenance products hurt the gross margin as well this quarter? And if so, how much of the 100 basis points was that if you have an estimate.

Doug Black: We don’t have a specific estimate. I have it bifurcated by weather. You hit on the important things, I would say, in landscape products. The weather, Florida and here in the Southeast were negatively impacted and they were also coming off very strong last years. If in the Midwest specifically and Northeast, they had pretty strong marches because of some warmer weather. So we don’t have it. There was a little bit of a mix but it’s honestly very difficult to bifurcate out a quarter like this before the selling season by weather that way.

Andrew Carter: Thanks. And then a second question on the M&A. You’ve done Devil’s Mountain. Now, that’s $100 million plus platform. You just did Pioneer. I think it was $170 million. Correct me if I’m wrong there. Those two pretty large platforms you’re digesting kind of within a year, does it kind of – do you have the capacity to do this? Does Devil’s Mountain run independently longer and kind of what’s your capacity to do more deals? Can they only be bolt-ons or could you swallow another kind of platform this size in the near term? Thanks.

John Guthrie: Yes, no, great question. It’s interesting how the smaller deals and larger deals all take the same things to integrate. We integrated 16 companies last year, so we’ve got very good at that. Pioneer specifically is going quite well. We’ve got great focus on that. They brought a solid team. We had some really terrific leaders in that space in the Southern part of their business that are helping us there. And so that’s going well. You did call it right. Devil Mountain will kind of run standalone and that’s typically how we do deals is we let them run for a year or so as we learn them and they learn us. And so we’ll be on a lighter touch although there’s really good synergies there that we’re going to capture right away.

And so taken all together, it’s very manageable in our system when we’re executing – we’re integrating, say, 10 to 15 companies. The large ones come in and that might be the equivalent of two of them or whatever, but it’s still very manageable. So we feel good about our ability. And Pioneer by the way is down the line, is further down the line. We’ll integrate Pioneer system-wise this year, but we’ve got all that planned and are working on that. Devil Mountain, system-wise, we may not integrate them for several years while we’re running together as partners. And so again, all very manageable.

Doug Black: One other thing I’d add is they’re also in different geographies with different leadership and different lines of business. So our leadership is very well versed in integrating these. So there’s no overlap there which helps ease it as well.

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

Operator: This concludes our question and answer session. I would like to turn the conference back over to Doug Black for any closing remarks.

Doug Black: Okay, thank you. And thank you all again for joining us. We very much appreciate your interest in SiteOne and look forward to speaking to you again after the next quarter. I want to again thank our terrific associates for all they’re doing, our customers and our suppliers for helping us to be successful. Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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