Core & Main (CNM) 3 Dec 242025 Q3 Earnings call transcript

Hello, and welcome to the Core & Main Q3 2024 Earnings Call. My name is Alex. I'll be coordinating the call today. [Operator Instructions] I'll now hand it over to your host, Robyn Bradbury to begin. Please go ahead.

you. Thank everyone. morning, Good Bradbury, Core President & Robyn Investor Finance Relations for Main. Senior is of Vice and This

We are call. happy and Chief morning today for Financial to Steve Chief have you fiscal by Mark third join Executive XXXX Officer; quarter Witkowski, our earnings LeClair, I and joined our am XXXX Chair us our Officer. an discuss recent fiscal our will then followed overview our and lead quarter outlook acquisitions. call results a with Q&A today's will a of Steve business and financial third session. update by Mark updated this

the We website. the our conclude morning Investor press will and call our this of section We with Steve's remarks. release to Relations issued closing posted presentation a earnings

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

earnings can which found discuss our investor A measures, the measures non-GAAP of financial operating are release press business. the believe in appendix We will of these in also results useful our certain of in and presentation. we reconciliation assessing be our

Chair you Chief Executive Core interest now LeClaire. & to in call for over and your turn Officer, Thank Main. I the will Steve

today for call. us you Thanks, thank for fiscal Robyn. XXXX Good everyone, morning, quarter joining our third earnings and

of of million. and EBITDA delivered strong $XXX over quarterly performance $X teams with billion sales Our record adjusted

environment. Main & We any in that have once Core shown grow again can

to enabled in third combined nearly to on with us focus driving share XX% ongoing organic sales our disciplined quarter. gains approach M&A, Our growth the achieve market

the I'll supply between results our demographic in driven X on and Page some sector. by first, a continues to growing the begin economic will in environmental, disparity The water combination We a But face factors. emerging States in presentation more themes with water of United prepared of later remarks. our detail discuss demand, and

challenging rapid rely reliable supply. demand depleted for in water. also leaks being in is requires the the create of including these increasingly a irrigation. consumption are to areas problem especially same is for pace, is At Aging at municipal situation agricultural lead that expanding Population reserves Together, resource inefficiencies becoming the and losses maintaining Economic Groundwater energy significant and driving use. and for water amounts growth domestic time, a factors scarce. levels water surging. a water production infrastructure higher development, as compounds on vast industrialization

accounts of important to resilient systems. product to play protection widen. which so. drainage water widening is an and dollars water water, infrastructure will Act requires infrastructure service the every projects Addressing Jobs do to water population. act extensive Meanwhile, to of continue reducing of used role freshwater upgrade bold water for to recycling. infrastructure, well U.S., of in positioned Core agriculture, improve the quantities water for and provides systems significant the we meet ensuring and demands time future-ready the efficiency to upgrade fire drop support to technologies efforts wastewater, increasing funding and These gap investment systems, the aging enhancing and growing continues in develop and our growing demand critical With water supporting opportunity receive investments the a treatment meeting billions infrastructure for between across in demand gap the approximately XX% supply expanding improve repair modernizing allocates investments, consume will reuse large in and The scarcity. & Without spanning counts for Main storm upgrades crucial repair water expect pipelines, which are continue portfolio and aging and to the of and conservation and U.S. loss, the and facilities development to that bipartisan a

Turning This as backlog accumulating positive end our demand in now rates and confidence levels new U.S. home momentum past repair has markets our outlook. and unlocking to The quarter. there demand to our Municipal be down been bidding to stable, end and modestly the years. replacement nonresidential activity and buyers we construction activity see reenter our come market resilient. in be continues remained the pent-up for affordability significant to housing continues that in the market, market over end continue few grow. the residential activity If to expect strengthens improves, The third residential mortgage of and stronger was

We an from starts to the in see are quarter. second project increase pleased new

over more see Act, Investment higher our to Municipal rates the end beginning due aged in also from XX% utility to markets are for and growth to grow market foreseeable this funding funded municipal projects represents access expect the demand, future. Infrastructure horizon, expected continue water beyond. by federal replace in of infrastructure. we to trajectory to signaling term. trends to the has over that and better the need With infrastructure and capital, water investments business the critical a are growth steady We long which historically demonstrated steadily water for benefit positive Each our XXXX of secular Jobs on

adjusting and shifts, are for construction nonresidential expansion markets new support averages infrastructure homes end rural the when long-term the for And and a benefit to lots for to growth, population buildable Residential population of and poised suburban shortage both from growth. activity of nonresidential need historical remained below demographic communities.

operations. Moving to our

efforts. term, medium- products recovery Saline brought the on suffered and again damage. to for our saturation our they our be can sites shipment term, disrupted ground are of focused and shortly up and create Hurricanes were the to minimal short operations the to not destruction, Our in the due business. short In to able be but and they the and are as customers can many on job facilities slowdown flooding in the after Hurricane running tailwinds Southeast passed, Milton long-term and

term, designed handle to from medium over a and higher long favorable storm impact volumes repairs. And of typically the constructed we regulations the term, and infrastructure see water. projects new critical Over are

Our many continue are support Carolinas offer we those to their safe need for. and associates to in The had assistance. accounted and who lives Florida disrupted,

continue our projects. outpace meter plant customer expansion and highlighted market the growth core end in quarter product, by geographic during to wastewater initiatives by sales achieved and growth. Our the water and XX% supplemented treatment execution on we

also the and treatment Last wastewater nation's as engineered metering providers we within solutions quarter, the of we products to We're one that leading about provider bring water value our of talked of customers. plants. and found leading our a are municipal advanced proposition position

with historically equipment. water plants substantial and expand sewer But the and bring that We projects on fence, utilities focused connections plant customers. the have inside X selling to valves provide wider us their and treatment opportunity and variety a specialty from a these of treatment

continued specifications talent the follow. the unique understands key navigate funding treatment to processes knowledge have invest in and they that plants We for has to the complex

our national These in growth. investments to been specialize key have projects coupled who with these contractors with partnerships our

market talent our serve We and a enhance also key our we and the Idaho Each geographic in opened after proposition, quarter to new locations giving opportunity add us and share. in reach during value markets. time we us key Waterworks to better customers our the Chattanooga, new location, to had allowing earn Hayden, expanding Tennessee

expand over open is and into, Our actively markets priority evaluating locations more plans next several of pipeline team to have we to the a quarters.

gross We second through of success basis initiatives. points XX quarter sequentially margins the expanded by the from our

private of and through We our addition we products. the job over label structurally and strategy, through way our M&A, source a price years have done and the optimizing tremendous enhancing expansion synergies margins driving gross the

been past gross years have gross margin transparent We over and experienced normalization. about X expectation we've our the margin for very temporary tailwinds the

quarter, had a normalized, we us for build margins gross expected last that providing moving solid upon communicated we baseline forward. to As

to commitment growth expand We access disciplined capital talent. quarter, cash and $XXX of further our completed to generated key after shareholders. acquisitions our for robust presence in product key and operating and We geographies, add million quarter and new during lines our the allocation value to during to creating demonstrates the X flow gain approach

to convert $XXX into XX% under XX% share which historically. of deployed retire cash model, operating repurchase EBITDA million adjusted and our also X.X program. repurchase nearly between an million asset-light flow to has to We us We operate our shares allowed

going the business into maintain of level cash to same expect back significant operating shareholders. return in generation resulting available reinvest to that forward, flow and We we will that capital

equipment, more Turning acquisitions East their single to to a to them quarter since the highlighted Northeast. the Pipe training X and with including services. Grow Eastcom our being September. Eatscom partner We equipment Main New team protection in Solutions for to Jersey. Green strong a has acquisitions. is states acquisition XX and surveyors we Products, across prevention then, welcome the Company service by Green and location have of of & contractors completed reputation Associates distributor We They offering excited utility family. Core a in are Arco Since in and exceptional associates comm damage XXXX, provided call and HM dependable second to commitment a Equipment

products products to a customer delivering to with is fire partner distributor & Main, have they our to partnering our look services Jersey. Northeast Core level support. of here to ARGCO further operating of serve, single customers own protection branch we and and commitment New They protection become top-quality the fire trusted mirror at They success. customers outstanding in a forward them

completed process new during of the aligning million. with of On Integrating have and completed cohesive combined million one the a $XXX acquisitions net that approximately diverse operations XX a involves and annualized we systems, quarter now to after And create annualized complex X acquisitions roughly sales. net cultures year-to-date, sales we is basis, $XXX businesses generate organization. combined

experienced is market. acquisition. process team addressable the flexible and integration With an on needs of well-defined, Our based each billion highly scalable

We of regional are our and by local in market with one remainder served the competing X national space, hundreds the of distributors distributors. other of only

our and by and We can growth expertise our strengthen competitive resources new products and capitalize presence that our local to better Our on utilize deliver customers. opportunities, are services size national even backed support edge, scale.

relative earlier, we and to serve the growing and critical of household by are a As on need secular tailwinds, formations, supported population I the water and growth markets systems mentioned undersupply upgrade repair the sustainability. end including municipal housing water to focus

and our including addition new of throughout to the level. local sales We drive greenfields, relentless the improving focus growth, products to at the our new industry, in of our talent, value organic adoption drive on the have proposition investments multiple ability levers

also multiple source network. expansion we sustainable and We label optimizing to including private throughout distribution of expansion, the our operational products vast levers drive efficiencies portfolio the and our our price way have margin driving

identify, increase network. our market a cornerstone enabling us Our integrate and our success, ability expand synergies share execute to has across our deliver of to acquisitions capabilities, been and

technology proprietary not is of by portfolio a improve differentiate a distributor, deliver tools Main product to streamline comprehensive we workflows, & to and and experience a Core superior just our offerings service efficiency customers. through ourselves enhanced

are We rarely of customers with all us a and trusted excellence customers come to services our do our operational Very our to because list source materials. a of products, markets. across

they them into we converting to projects Instead, idea us project, comprehensive a material come engineered with to bring those drawing, by plans. and life or project

to on ability the ground geographic also to suppliers Our highly communities fragmented large a our force our have and essential and is reach the footprint reach and boots knowledgeable we to sales customer local base. as with

create Core advance financial we mission value a positioned while across generation, flow return its shareholders, to for allocation characteristics, to well communities deliver strong resilient reliable Main the profile cash is serve. & infrastructure and disciplined characterized With by fulfilling attractive capital and

to Mark, it I to the to quarters. on a reflect Before over few want moment I past take turn

have control. navigate our beyond conditions, to and to dynamic and weather distractions from several external other market challenges had events Our factors teams unprecedented

resilience about to ability rose and the teams dedication commitment. to customers on Their focus drive the Our our focus, strength our our adapt, continued people. culture, the speaks of volumes and of agility, occasion consistently results collaborate, and demonstrating

forward your will for look the what ahead, we you Thank accomplish in Go I years to ongoing ahead. Mark. support.

teams XX% grew to Thanks, approximately in to delivering We to third my their net Steve. record for I'd $X.XX the also billion. like hard thanks another quarter. extend quarter sales in our work

were quarterly favorable of the organic and Acquisitions more sales volumes last which a X% Steve sales this growth the our rebound that municipal contributed in digits due company to customers the history. and resume up of projects our allowed quarter. of some was mid-single in As level conditions, weather mentioned, were to deferred project highest about starts

prior year, basis. As the finished XX% compared of remained sequential approximately at quarter anticipated, margins on a with for the difference stable basis points. XX.X% pricing in Gross a XX

through position the margin would to our second gross sequentially run expand course that in a quarter communicated September, our margin execution During call we expectation and normalization gross in had initiatives. be that of its we our

the compared teams expenses basis XX.X% with credit $XX borrowings million in reflects the second the term $XX SG&A and The tax were million million third primarily execution to was XX provision Selling, $XX increased primarily delivered under strong sales prior prior the of the general The on year-over-year our and administrative in The facility. the year. XX.X%, our to rates senior delivering quarter. percentage XXXX addition $XXX quarter and both a quarter income in taxes points of gross acquisitions. higher XX% from respectively. in Our million the third with in effective increase ABL year, loan due for of was in increase the million quarter and compared due and expand by SG&A that, million. the to Interest impact margins $XXX net $XX third expense was as

normalized This in fiscal primarily was in exchanges $X.XX. with and quarter's due in the by in in X% recorded share increase year decline primarily partially expenses XXXX, period million due increase per $XXX higher in prior net the to approximately secondary rate interest over third to amortization completed The due the expense. reflects following share diluted to The compared ongoing more year. of effective net was we transactions executed offset to quarter quarter conjunction offerings fiscal the a earnings the income decrease in increase income million in in and the a Diluted was repurchase tax We third an $XXX and count prior income. SG&A share XXXX transactions and XXXX. with earnings net repurchase and partnership in share lower per increased the year throughout interest rate

third from basis Adjusted improvement EBITDA Adjusted XX a quarter. XX.X%, XX the increased sequential approximately year-over-year million. to X% basis quarter decreased to EBITDA the points in $XXX reflecting point second margins

debt $X.X the remaining and Total the and being $X X.Xx. balance billion, flow. ABL our liquidity $XX was with our availability of revolver. We leverage debt approximately and to billion, under million sheet cash net net ended Moving cash quarter of of consisting amount our was excess

over $XXX during quarter, of generated the flow cash operating adjusted conversion EBITDA. million from XX% We reflecting

we remain cash allocate healthy unchanged in to continue to continue we investments top have flow our capital completed our and We This our with acquisitions, strategically priority. a growth pipeline. and year, priorities allocation have being XX

million shares deployed to the capital $XXX in million priority second and repurchase X.XX Our program. share under our returning total. year-to-date and brings is shares to shareholders million $XXX to third quarter, repurchase X.XX million our retire in we This repurchases share and

approximately As share of remains million under our today, existing $XXX repurchase authorization.

head to remains XXXX. fiscal discussion be XXXX. to with for of we updated the portion will of a markets remarks business outlook and The framework our I'll remainder we expect a wrap my and XXXX stable fiscal our Q&A, continue replacement prepared up municipal resilient, fiscal our for end Before for and consider repair to on that

margins stable, and remain environment pricing levels to current we will sequentially fourth believe through at the expect quarter. the sustain We our gross

years, mark of $XXX us recent and full current and raising consistency our over net our business and behind diversified EBITDA. of acquisitions, from positive billion not annually the our to to net the range expect market and associates. this investments to the sales million. and initiatives, are year approximately expertise will We $X.XX sales developed period. consecutive support our the a EBITDA order targeted growth $XXX year would the XXth are and from and averaging possible adjusted our over of This expect backlogs end dedication we trends, mix X million now of sales quarters adjusted we XX% range that estimates without to year considering execute model, $X.XX The With we growth, we've to billion, be for growth making resilient

growth our fiscal quarter's We As outlook we look for plan to firmly beyond during provide year, intact. earnings remains our this call. XXXX algorithm next

will expect movements broader effect However, depending of interest be conditions, and federal market the as end we sit generally including today, funding. volumes next year on here progress positive economic infrastructure we rate on

organic through to execution X committed growth to expansion and our driving of of product, the customer initiatives. are points above-market geographic X We

points We rest acquisitions to far and this M&A, through we next as opportunities anticipate of of from acquisitive of expect so have of X maintain this terms acquisition In the already that year. strong a growth remain progress we pipeline year into and closed year.

will the are an adjusted we We do about strive ability to rate of execution cash initiatives, on XX ongoing and basis our to optimistic XX of adjusted at expansion annually our to through achieve strong XX% EBITDA of margin operating this, flow a EBITDA to while producing basis. XX% points of

deploying capital including M&A growth, growth above-market executing delivering and on continue will that initiatives. We organic drive will pipeline our initiatives and our on

maintain driving balance We dividends. share through significant to or value repurchases shareholder continue flexibility will liquidity and sheet

strong our have model resilient, business and We demonstrated that deliver environment. results is any we can in

to and forward looking to the are reliable We helping build customers strong more infrastructure. our a year finish

At it I'd questions. open for up to time, like this

today comes Instructions] from [Operator question first of Research for Kathryn Thompson Group. Our Thompson

taking you my for Thank questions today.

with [ IIJA on you of to steadier penal a against but money markets, that could unique spent. same the market. just in have if And the some end amount end could backdrop. market be municipality is municipal helping commentary thoughts and markets of XXXX digits single the focus on momentum first looking end any not end in market on but for for that 'XX have going on kind on First and guidance, piece and just to we're going low ] there necessarily large the non-res particular, current into for a X with expectations the next versus up And are still be spend year you tailwinds focusing similar

backlog feel what Yes, improve. modest the we in to continue really and Thanks, Really bit to quarter, out growth stable prominent encouraged by bidding saw through we're municipal starting a the Kathryn, and and for IIJA saw are funds the seeing. pretty activity more become there. little we question.

projects XXXX. really number from So -- vary a the large for which dollars And of the we're being smaller bigger are we to projects think -- these us. can that which ultimately going be diameter drawing less will call, table material little some pipes, in a drawing what seeing delivering start would executed in hitting and I projects from to the replacement of lead projects,

seeing good it's to to start But funds flow those starting through.

in were too. much well, as we by municipal, we're we're what has along with what for encouraged been Nonresidential those So good us very with seeing line lines. anticipating

certainly and of of the localized strong. in activity So and be as be underground roads mega continue of seen some some we've continue of areas A work our fire protection bridges areas. with terms there in areas we've lot those to along those projects to robust big in seen the our

So those lot pull and in helped things of have materials well. the a as of storm drainage through those some really products

struggling So when was talk but non-residential still to and that we'll still about down continue see multifamily, that we anticipated.

overall, the the we're So by as in start and end we seeing we're fourth 'XX. what encouraged markets into quarter get then

stepping is fair as declining a forth with head you to better back next generally that and versus year. resist into sum say just So momentum

stable. Yes, some It's definitely traction. starting to good definitely municipal, really pockets, stable, gain and some with we're seeing particularly

[indiscernible] just beat But Okay. in by And terms or the a little in missed driven I just a in the raise this end. was bit if prepared acquisitions the the just quarter better commentary, on expectations. much guidance clarification X by follow-up how of on raise, my the

those the terms Just X buckets. you just between give breakout can any color in

This Thanks, Yes. appreciate that I is Mark. question. Kathryn.

to that closed last I'd call. acquisitions the of terms to due had. quarter's primarily the In we guidance, that the subsequent that say we was raise

say markets. comments you on gave feeling more year heard little obviously, beat that optimism did guide we rolled little I'd we're expectations balance a closed, So that to and us have the than about the and a confidence about how our given roll and acquisitions through as Steve's bit those those the And and the internal then the well. better guide. into outlook the the of we end added through had we to bit

next Our of comes from question Baired. David Manthey

growth more you model as feeling it algorithm 'XX, that on relative as or next the any margin question, like a just you look it Slide -- are we factors is that, into year? feels there think Could as look normal either fiscal like to fiscal XX. we consider growth just year should First unusual enhancement on about to we year-to-year your

the think a Dave. it operating that's this market the really about you're in on. X this a but our to more year deliver forward of growth. to next we're an to basis got like we've margin little execution thinking looking going board good adding next on Thanks, think into typical as year had we a of points it's today, From about X how to those initiatives commitment we we've standpoint, going Yes. Yes, terms to across say That's and And still into of year that end play year. slightly to XX the point. think margin sit XX as right that expect we -- Obviously, be feel our I of here momentum. definitely at are I'd on fully early operating 'XX, yet, above positive nicely good some markets, points

to as saw You to sequentially margins QX our improved increase and last addition from quarter well. that, from sequentially in us rate SG&A QX gross

fourth and far seeing so quarter in momentum some got what So markets here into 'XX. for we're we like the going good end the

of COGS have from U.S. Mexico outside but your other or could Obviously, and much second, that policy getting way if of you tariffs. customers' broad conditions nature then could about about I don't there, talk policy workforce, just a lot that both percentage a you assume on technical given the in risk we've thing. here. then and the little of address And talk sort Canada, And that? comes you you Okay. been of tariffs, questions the labor presidential of change labor would just more immigration bit Could probably

Very the In a view with guess terms see really generally, My regards change is we that type to of the for dealing what happen in our product. less of of that than our comes Dave, impact ourselves to tariffs we predict at tariffs, the And X%. all neutral Yes, would business. in the to less a than as produced of is and import direct XX% a Most here. as positive vast best there. do here our assembled import. of product labor United that in for majority we're type much our of contractors -- for wouldn't at hard little over we States, situation them

impact we generally anything, we a as into tariffs. huge So to it's said, don't the if we neutral see new as this from administration. positive And look at that going

Our Research. next question comes from Nigel Coe of Wolfe

Mark, guidance, just so better you you've step given I taking to XXXX in thanks for a a But sales than yes, expected. back just think quite XQ, came what that. bit

the your benefit that upside I'm drove the how thoughts of by much in any XQ? So were curious projects came impacted weather just what the on XQ and expectations? in And to

Thanks, Yes. Nigel.

to saw the expecting the would consensus were In decent expectations. internal EBITDA say, QX on beat I Obviously, and we cycle the terms line in margins. had of quarter, QX. it we construction we that to relative impacts in a in top slightly than came a better But here our better

than We of So we like are we see on sequentially. were are came mentioned, we're what see that as probably Gross us expecting trends nicely, some really but some and really, margins improvement expecting. in but there, expecting came QX, we throughout expecting did it release well I the quarter. that that back slightly into better in to got

on of to that overall, get impacts this that be to expected trend we the see we in us for back lines pleased the saw we year QX. So outside were really

of depending Some particular, more we all late would construction those goes, bit geographies. some northern of in little through. projects have QX, the in say projects, on expect that those season There's in I'd some probably these just released a of how

good So with quarter. feel the overall, the in performance

pricing the I'm on And a Thanks now on sequentially Mark. hot the stable you pipe 'XX. obviously we into topic the Great perspectives comment quarter. That's right you fire protection fourth Are comment if curious, deflation? getting maybe PVC any and could price on pricing, environment. then now. beyond

negatively with part the impact than type headwind say kind business, started sit some today, been a relatively there, on less we and XXXX. but a that of I'd significant decline has movement for throughout the we're We positively in here XX% we expectations out a We say steel do we expecting significant year. it as think overall, the Yes, It's here early or seen neutral we XXXX bottomed really either year into really XXXX. momentum I'd PVC, no no pricing. throughout to contributors we've in of stable side, into QX. of here again, our there but as sit real get today. next as the see will have XXXX for going

of we other fire steel categories. hopefully, these pipe some the got behind a coming So and seeing us on the good in we're lot suppliers, information side protection from various product good trends in

at believe estimate is at kind neutral that's leads this point point what us that of a this for to So good

Gap] [Audio

question Mike RBC comes of next Dahl from Our Markets. Capital

said, hot environment stick Obviously, I as a want now. topic pricing first with the for to one. Nigel my right

not I out comments while of there users in on may yet, some come side some like -- significantly it industry about do expectations they pipe, -- have for think still your muni of down of the pipe, some seems continued Some pricing the are decline. suppliers

So out there, I different Mark. comments a little think bit as your probably stand

side gives So you muni year? next specifically more give can on seeing, on the hearing, little color, the you're what stable be a more what that, you're maybe might that through confidence you guys what

I us. PVC, of want means talk a little talk Obviously, a but bit really question. -- that to when good attention Mike, on Yes, we about about what lot for stable what pricing,

are project-based. our of most sales So

complete really customers products are associated for of us to full suite our looking So a project. for a

numerous product pipe. So PVC within different beyond that, categories there are well

the complexity project, product. pricing lot so competition which in the demand of it's based the of local factors, price is itself and for and on procure different local the the specifications And market, whether we really a

the So when value we service, those different regards into that of talking delivery, about can of projects categories, talk cetera. quality a to we about lot product project add the lot et different of management, the stable these a pricing, the we're stabilization across in

that's talk so talking seeing we we're pricing stable about what about. environment, And when when we're

mentioned, less product related. cost. already As even our seeing And in are our Mark many is with than PVC We're increases associated have it. projects don't manufacturers XX% PVC of their see to most of starting

already we're increases categories for product price So coming different to 'XX. many in for starting now see

what stable us now confidence right that's a environment. gives about So for pricing

building 'XX Can expectations multiproduct Yes, of I to into your job that that and question, really the initiatives. your different of Okay. -- there of a what's expansions water growth adjacency the think nuance it's the we for some terms for medium of that's And big obviously, kind just give you second opportunity growth? like I have talking understand to and guess a helpful. in help at stability. the the of about the of that's like around couple you us term specifically us a growth were portfolio frame jobs, some treatment above-market in as important up broader think level people of And spent plans, you part eager and the like contributing that's been and about expectations. service initiatives kind ones time looking orientation treatment

ones duration projects. us these of projects where been design It with cycle on lot that once a out flow execution with carry that a X-plus optimize share now building you over break material contractors we've on type space. capabilities were A into will -- in of very working initially to I'd lot won't for projects we that being what work a last really generally have gone specifically. are were the we're work. that through the long we've the XX the Yes, and years, is really ago, multiyears. executed And our this But the design they're help for starting these these for -- to lot of is years

with to So access that's because products. we type those view able why It's we've a line These long specialty in products are getting one products, got on invest this industry, the specialty been the we've of associated like this. business. areas to

last require them and we've able that All to the access, capability of been special build decade. over

developed pipeline in right on. and of as things facilities to growth projects . expands that to have new to the see in and continue a execute expand and continue we'll population designed. treatment and so forefront long us being ones of lot water of And ahead the there and these a We're for wastewater

of question Wells comes Fargo. Sam from next Reid Our

QX ask acquisition I detail benefits you finer missed, some on of wanted of And still you have apologies Is but just an point gross maybe of sourcing label private private on an QX? do rank in a strategic these. greater touched the you've already initiatives your behind of any I on could building improvement percent to put perhaps like order in blocks if at a was as accretion self-help label. there versus and But margin? update increase COGS? Or if where versus some I from then X%? sequential it know

Yes. one. Thanks, take Sam. that I'll

and ranking we foremost In about progress points terms of good sourcing basis the that private of and saw of on we've that made sequential margins, was done work improvement there, the first in there, you last I'd really a probably gross the say some year. label. of throughout in rank the optimization strategic Then the XX lot just terms increased since quarter.

expectations the we that obviously, was COGS and about that last since there. a well We've how good it to where more progress really figure contributor, X% private providing advanced pretty detail that some in on private from of kind continue make range we that a of think be and year I'd of to terms updated the can full and label X% Second, we we on wrap go. we're say in good we'll up label. of standpoint

there. at rank But an benefit and label, year-over-year gross have M&A margins, from not significant contribution a did there, real optimization We them sequentially contributor standpoint sourcing but acquisition some private no I'd sequentially.

sense the some helps. that when as then Any And to the some if P&L signs on policies large start of No, would here. of another to those restoring projects one the on-shoring things interesting the up administration given and to your they're looking broad incoming election see follow specifically. question, of type of and benefit emerge, incentivize any those were to we projects to

mean way onshore onshoring. share majority other our there's Yes, really vast are today. et planning innings looking see to onshoring, into of you sentiment I weeks to our a manufacturers be with just of or if Sam, be our this understand that what they're this it those little thing, early I would manufacturer about really the it's on at It'll to take one to on hard components cetera, interesting that. but that tell. may bit cycles and be tend do will to manufacturer standpoint

for that bit and little maybe more you the how plays color have So out quarter. next on we'll a see

comes Baumann question Patrick of next Our from JPMorgan.

And you just it why be? you IIJA? that on that about pricing you development, center to $XX you 'XX to side, think the margin out for be have be market what of could the from funding from upside that? single-digit for [indiscernible] of curious data kind on center appreciate been market the a meaningful to still tailwind you talk comment what's perspective. low And end Like develop. And not that allocated I that what's I non-res, so it's could I slow comes. wanted when do can just been exposure to or of growth data then what's if might comment if water rate a non-res really? billion for this little I'm what costs. was a

then really Yes. to The Thanks, through I'll funds. IIJA funding the state can and Pat. still local those access we allocated there needs down on majority tick into funds. in municipalities state Appreciate And seen pushed to But those to level. allocation that's revolving federal and the those. a questions. down get that the haven't be of go try

funding quarter in we more like optimistic some be saw we funding So there. lot a earlier, there this for being allocated. movement mentioned and more of bid particular there's applied are with lot a with But projects Steve the to still really

So I in into do as XXXX. expect that tailwind momentum get to us for be continue and we a

all there's a us cases, We've pretty amount lot goes a lot of the projects And product ways relates there's that's infrastructure around initially needed protection for of water, in that to and We it facilities. participate participate significant of in in. sewer, all those in addressable projects drainage, significantly infrastructure we fire some then in centers, for storm I'd country. a mega of the those seen say those. data As with

been space, participate non-resi in in area that's those. momentum of the good to that a seen continue But and we've we'll

those more well up We continue country, positioned we're and and to to more capture throughout pop of see the that growth.

like has XX%? On is on -- any how that allocated much how Do sense it XX%? the $XX numbers? you of of sense funding it far? IIJA, billion Is so XX% is allocated Like been much been have of any from

Pat, in how of roughly It's best of sense much that point. our been this X/X terms of it allocated. at has about

funding So for still a lot of group. room there additional

question. acquisition the on second my then And side, Okay.

here to think this Is can and the that You've damage this it equipment now about in for equipment, Like done product instruments higher-margin couple of these these? provide? deals distributors I the utility color of bit provide what's the talked a thing. opportunity you you the scale Can you green today. across Any more of Eastcom on I set? prevention guess, color locating was a network? then sort more that

now that regards along lot things, in of and utility type something areas sources. of we the lines. as both believe probably to that big We continue We buying that. can getting we through this it's of multibillion In scheme number -- of value a dollar things to those view not do add point. been a market good a and to from which advanced. our our technologically by any detection lot customers access across it at offering the something fairly And it's states are we're servicing these municipal are of and complementary cover customers serving this pulling a good of the to great board. They've to Patrick, doing Yes. those all already line providing means, utility other devices is but what product, that are with businesses our Yes. detection think we with really in a

You radar things looking a replacement now years different municipalities pipe really product that, get quite been of types lot for and that to facilitate there. XX these that's and are and into are buried have the useful the the help right in of of just XX services frankly, to as locate

comes Joe from Our Sachs. of next Goldman question Ritchie

to straight. fourth want there. out anything if I the the So to seems down. And -- implying week are squaring call want is on I volumes on just quarter. like know volumes to so, call ], comments just And X% by your just [ I want make that I XXrd slightly like up, week an you extra growth. the have want in start this I quarter. to organic squaring seems I you sure comments X% it, [indiscernible] think to it the guidance your guys have It

much that guide on expectations quarter. Yes, the volume growth I'd close us. that seasonal of in pretty I'd in a QX. Obviously, a mid Joe, the for for -- digit of got the you're say it's we've mid-single embedded terms quarter more say for

will depending quarter. the say I'd that the be week, the quarter. kind we X revenue it, around the of that obviously, neutral to call X of bit. but impacts the points So volumes could a growth XXrd in move The seasonal that And in then in more little late on see slightly worth positive fourth in somewhere

little a there benefit week. So you'll extra get extra the with

issues this we've mean, some some parts related the in would I Mark. XXXX. to year. business. start early and your you your see maybe see from helpful, around in start activity the all comments going from in to And the the or even back uptick That's you Does there's I seen maybe when Great. earlier that maybe to typically you come the the other -- then Steve, Okay. business to your quarter. storm-related delay of this improvement bump guess, see in that of expect all that

be helpful. thoughts any Just would that around

Upper 'XX. you way us obviously Wisconsin, up the way on could see weather-related Midwest. the something have that incidents quarter. What impact And incredibly the the Yes, into into from all with I'd were all in is coming up definitely a into pervasive the that second had QX, in share we north Texas huge we

to at replacement in was the stuff kind really happening were with systems and look the longer quarter then quarter. with hurricanes and release the robust much localized medium of fairly areas see the you what that water impacted. fourth of back-to-back the drainage and in were hurricanes, this and see storm that evolve we activity to Milton, of construction-related happened continue across third that obviously both caused in generally some there. pause Hilton, If those Helen are And into and what we'll term, those more

in completely in them those going of were of be out wiped a that's total the out rebuild the for many to there. Carolinas, utilities Some and areas

for continue see we'll . So to that sure. XXXX move into of some

Our next of Hughes from question comes Keith Truist.

Two questions.

region out but you was any calls, would quarter any specific had First, from We you period, end strong the user during units. the there market pretty the quarter several this a that the number. around in numbers call talked that in second turnaround it about particularly was that negative on notable would third

Yes. Thanks, Keith.

part In by resume terms were I construction the central quarter of third was through the the regions, area. last saw would down we up in the in the of that impacted U.S. And quarter, area really and we that say definitely

a weren't that they see to in complete good country So for of those underground parts that to construction was where really the lot able QX.

back say call nicely, quarter, with online last non-resi were what we line quarter, activity to us I'd we did both in stable were. starts with with fairly pleased that So came to tricky little our that how expecting. expectations of and and pleased came rebounded. the of really in, that see some were was see a and for I'd in really the we're say that in back We municipal It also come kind third the resi get

the I'd are and areas priority that those call highlight So out.

antitrust has referred are any to your be of around you And this you callers, been have issues. but been party Okay. this activity? to receiving of Have about an subpoenas received some several to suppliers

our any terms of a activity anything are not those our as to we by And we the named cases. We in lines. last -- of in hold of we statements on suppliers quarter. not any those we just received along have that's defendant are comment anything and we that reiterate, happened regarding won't made any No, subpoenas,

Our Pettinari next Citigroup. Anthony question of comes from

competition a M&A if in buyers pipeline for seeing the 'XX? of increased potential wondering talk are bit targets any was how little you And for or about generally, you just but you at kind less or general Investor the valuations new past? X.Xx reasonable Day. at talked looks about could are I that the a than net bit you've seen healthy, And that the with maybe maybe above Xx in leverage then

about if And talk level how what year. to? about could wondering leverage you're we willing Just just go you should that think of to next maybe

pipeline. Yes, Anthony, the about M&A talk I'll

of years. right directly in in with looking traditionally In we're the for last really, along ourselves we've sourced continued year with acquirer the year continues everything so been that to line going this next have that at this, the been pipeline working owners in looked looking those lines. far the many deals space, So we've choice pride in multiples our we strong. being that remain execute at are on got very at sole that to into that have cases We we're what these several with we

a really So year, talk we've leverage? would you saw bit see do been far this and to deals pipeline already much same. going and want XX little into continue so that. robust, in The a you has this XXXX year, about expect don't Mark, as the pipeline executed change to see robust

quarter. good terms in generate leverage, cash balance in to Anthony, liquidity going a right, amount, significant a maintain to over obviously of pretty Yes, fourth of continue we're conservative throughout. We're expecting million sheet to with the $XXX

X continue to thing, repurchases M&A maintaining X.X very guidance to allocation balanced of And put very we'll sort in confident turns believe out. had I out approach leverage laid that we strategy, a that capital potential going while So reasonable within to a have that share a we've stay somewhere on we're and leverage to debt continue ample for target our with capacity line.

the then you're of of worth white mean kind region space a is are has Great. that product I that your Great. lot looking enter curious, just kind been And of was or just follow-up. noting? that expanding one M&A geographic But a there to I any about offering.

acquisitions we bolt-on areas. some in we've that We've other strengthened of our opportunities there. done to of Yes. out a Nevada, and Arizona, positions find even number had, fill-in areas great Texas in continue these The We this year.

lot in of areas continue local to a there So that. to continues markets these do robust be to

products We in Canada. HM added in also pipe

there. And rolling at cases, good we really so and targets opportunity cases, the we map do there's in other is at been well, In look we've and to opportunities, continue too. some out great find to to find as the where continue a acquisition that we're greenfields

us in at to So of space fill out left it lot those dots look of a there. a lines, along we'll lot for

Barclays. from Bouley Our of Matthew next question comes

the greenfields. on Actually, point, you that mentioned last

mentioned opened in of pipeline I of markets going you that a the quarter, priority kind think and a you there's forward. couple

many typical normal of what for greenfields in in line guess, revenue So And time would branch hitting XXXX? how I opening guess profitability? I be you guys look ramp kind the of terms of a to branch you is greenfield and

Matthew. Thanks, Yes.

In say, year, terms of X. typically, to a the within even usually just somewhere from branch size ramp to would the typical revenue years I an we're earnings and on breaking we're get first to greenfields, in perspective, we're trying ramp X to

we're a little bit time got but very record of take a rolling mature We've to for out. track there does something it great So get market, experienced a those in. in

terms pace, upon the it's really In factors. of various dependent

as market but of growth. a contributor contributor So definitely move and a target there, it's for necessarily set greenfields, talk continue when It's will we contributor a a we it above to be we X forward. points about been don't to X

to announcements in we as see open So you expect should continued locations. up new

sort the be mean, margins be the get you on and the 'XX of XX the the side. that basis happening then be you what's gross wanted secondly, I about case. guess But expectation and dollars most gross expansion SG&A coming margin is of why despite, points that kind margins given XX of sequentially stable into of SG&A that now quarter. case XXXX? be that the would as margin guess, wanted expansion what now, margin that just EBITDA annual And talk lower you for to that's I on to I would to right should sequential check I near-term might sequentially for fourth and said I if about I think that Okay. implies ask into flattish sales. implies

fourth the in terms you're of Matthew, Yes. quarter, correct.

about expect quarter. lose down in gross into sales. the a We quarter the margins into bit leverage an ramp of -- in little seasonal the SG&A sequential fourth fourth the From perspective, we'll with

will is into typical higher rate us. be the for which SG&A little the So fourth a quarter,

As of operating XXXX, you XX improvement. the we're margin. very about to points think basis committed XX to

come expect we obviously, Now couple from productivity, then XXXX. a SG&A and that both we'll a of expand as that's position going areas. go in different into and margins gross One, I'd to potentially to of those be good

that good gross and out work SG&A margin going on the really we're to that our initiatives to played So continue of we've feel get out. productivity

question final of . from Obin comes from today America. of Andrew Bank A

This Ridley-Lane on David for is Andrew Obin.

I sort that's today clarification Just of question. to And your included is your of What quick percentage nonresidential believe that's in revenue multifamily. correct? just a confirm, category,

fits into those a little and bucket fire quite that fit those component primarily lot say, of for of better multifamily do a some Yes, less that's work into obviously, less there's X% other facilities. right, it multifamily. David. of around a bit I'd of We projects. usually, it's, types than the commercial our than we nonresidential, grew We do storm drainage that -- us. as in sales into well, because And protection then sewer, of the water, But

of majority makes that end So market. the in participation what up that's that really the --

know Got to put And put point has a before, been a finer just it. -- this to but it. I just on asked

the said dryer. this of quarter Did you lost check about weather. million quarter, $XX last So you from revenue a lot

the on catch million $XX do think you it in the you that? was than up did So quarter? that Or full less was -- third

a sequentially, construction much obviously we it Well, think was better quarters.

back QX. to got expecting that we have were we the lines on for trend So

It it's of those we that the sequentially. would improvement -- a But weather always yet tell a majority more lot benefit of [indiscernible] in the it was QX about But ahead that last it There's of generally, to high. was get do of of projects, feel terms in QX achieved In think year-over-year. XXXX. or probably you the was construction the QX exactly I into difficult some about pushed bump year quarter, was from any projects. some decent that an to quarter. like think other come we of a that

not sequentially as So a us benefit, really from obviously, but year-over-year [indiscernible]. much helped

Steve hand At remarks. this time, further I'll LeClair, we to any have no for back further questions.

Thank today. again for you all joining us

we performance, to our highlights of Our our By deliver national strong operational and operational ability continue our business commitment third performance sales local and model exceptional record and customers product growth. adaptability to strength value maintained to excellence. resilience, the scale combining We quarter and expertise stakeholders. offerings, achieved underscoring with to and our drive innovative our our

remain Looking grapples nation ahead, addressing capture long-term to we needs sustainable supply critical and With between that significant gap infrastructure we focused federal customers' as well margin horizon, the investments exist on value a with opportunities creation. delivering and our expansion widening are growth the water on demand. while positioned

priorities. our forward confident are Operator, your and by are We to success strategic ahead look for call. We the our the in concludes on lie Thank opportunities building ability to our across energized support. meaningful that quarters our in progress to that come. drive you

for joining you Thank us all today.

lines. now may You your disconnect