Business
Core & Main : Q1 2026 Earnings
Core & Main : Q1 2026
About this update from Core & Main, Inc.
Fiscal 2026 First Quarter Results June 10, 2026 TODAY'S PRESENTERS Mark Witkowski Chief Executive Officer © Core & Main All Rights Reserved. Confidential and Proprietary Information. Brad Cowles President Robyn Bradbury Chief Financial Officer Landon Althoff Vice President, Investor Relations 3 Business Update MARK WITKOWSKI Q1 2026 BUSINESS UPDATE Executing on Growth Initiatives, Expanding Gross Margins, and Returning Capital Achieved Q1'26 net sales of $1.9B, Adjusted EBITDA (1) of $226M and Adjusted Diluted EPS (1) of $0.72 End-market demand stability driven by strength in municipal activity and select non-residential project types, partially offset by softer residential demand Sales initiatives delivered strong growth, with treatment plant and smart utility delivering double-digit and high single-digit growth, respectively Expanded geographic footprint by opening five new greenfield locations in attractive markets; on track for a record eight to ten openings in FY26 M&A remains a core growth lever with active opportunities in a robust pipeline Gross margin expanded +50 bps YoY to 27.2% driven by key initiatives , including private label growth, sourcing optimization, and disciplined purchasing and pricing execution Generated strong operating cash flow of $82M supporting growth investments and shareholder returns - Deployed $88M in Q1'26 to repurchase 1.8M shares; highest open market share buyback in a single quarter - Additional $37M deployed to repurchase 0.8M shares subsequent to quarter-end (1) Adjusted EBITDA and Adjusted Diluted EPS are non-GAAP financial measures. Refer to the appendix of the presentation for a reconciliation to the nearest GAAP measure. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 5 SCALING HIGH-GROWTH MUNICIPAL SOLUTIONS IN SMART UTILITY & TREATMENT PLANT From targeted investments to sustained above-market growth +15% 5-yr Sales CAGR (1) Smart Utility Treatment Plant Solutions 1 1. Deliver turnkey, end-to-end solutions Hardware, software, analytics, installation & service 2 2. Reduces execution risk for complex AMI deployments Win larger, long-term municipal programs Multi-year contracts with major utilities Expand capabilities to support complex projects 1 1. Engineering, estimating & project management expertise Ability to serve large, multi-year treatment plant builds 2 2. Capture demand from infrastructure modernization +25% 5-yr Sales CAGR (1) 3 3. Increasing project size & complexity Scale national capabilities with local execution Dedicated metering & project management teams 4 4. Strong OEM partnerships + local customer relationships Broaden solutions portfolio across products, software and services Aging facilities + increasing regulatory requirements Supported by durable funding 3 1. Leverage municipal relationships to drive share gains Highly specified, less cyclical projects Strengthening role as a trusted execution partner 4 Expand product and service offerings Driving Durable, Above-Market Growth through Scalable, Repeatable Execution (1) Represents the compound annual growth rate ("CAGR") of net sales between the twelve months ended May 2, 2021 and the twelve months ended May 3, 2026. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 6 Financial Results ROBYN BRADBURY Q1 2026 FINANCIAL RESULTS ($ in Millions, Except Per Share Amounts) Net Sales Gross Profit Net Income $1,911 $1,910 0% $510 $520 $113 +2% 27.2% 26.7% +8% 5.9% 5.5% $105 % of Sales +50 bps % of Sales +40 bps Q1'25 Q1'26 Q1'25 Q1'26 Q1'25 Q1'26 Adjusted EBITDA (1) Diluted EPS Adjusted Diluted EPS (1) 11.8% 11.7% +1% $224 $226 $0.57 $0.68 +6% $0.72 % of Sales (1) +10 bps $0.52 +10% Q1'25 Q1'26 Q1'25 Q1'26 Q1'25 Q1'26 (1) Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Diluted EPS are non-GAAP financial measures. Refer to the appendix of the presentation for a reconciliation to the nearest GAAP measure. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 8 CASH FLOW & BALANCE SHEET ($ in Millions) Facility Maturity Interest Rate As of 5/3/26 Operating Cash Flow Capital Structure $226 ($82) ($36) ($29) $3 $82 Q1'26 Adjusted EBITDA (1) Working Capital Interest Taxes (2) Other Q1'26 Operating Cash Flow Senior ABL Credit Facility 4/9/31 S + 125 (3) $ - Senior Term Loan due 2028 7/27/28 S + 200 1,230 Senior Term Loan due 2031 2/9/31 S + 200 930 Total Debt 2,160 Less: Cash & Cash Equivalents (150) Net Debt (1) $ 2,010 Capital Allocation Free Cash Flow Yield (1)(4) 3.4% 2.7% Specialty Distributor Peers (5) S&P 500 $108M 6.4% CNM Share Repurchases ($88M) Capital Expenditures ($14M) Debt Service ($6M) (1) Adjusted EBITDA, Net Debt and Free Cash Flow Yield are non-GAAP financial measures. Refer to the appendix of the presentation for a reconciliation to the nearest GAAP measure. (2) Represents operating cash taxes paid to the IRS and other state & local taxing authorities. Does not include the portion of our tax obligation distributed to non-controlling interest holders as a financing cash outflow. (3) Carries interest at term secured overnight financing rate ("Term SOFR") plus a margin ranging from 125 to 150 basis points, depending on borrowing capacity. (4) Defined as last twelve months free cash flow (net cash provided by operating activities minus capital expenditures) divided by market capitalization as of May 3, 2026. (5) Includes Ferguson, SiteOne Landscape Supply, Pool Corporation and Watsco. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 9 FISCAL 2026 OUTLOOK Guidance Reaffirmed ($ in Millions) FY25 FY26 Outlook Net Sales $7,647 $7,800 - $7,900 Adjusted EBITDA (1) $931 $950 - $980 Adjusted EBITDA Margin (1) 12.2% 12.2% - 12.4% Operating Cash Flow Conversion (2) 70% 60% - 70% (1) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Refer to "Use of Non-GAAP Financial Measures" for a discussion regarding the lack of a reconciliation of these estimated ranges. (2) Defined as net cash provided by (used in) operating activities divided by Adjusted EBITDA for the period presented. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 10 Appendix CORE & MAIN SNAPSHOT Key Stats (1) Market Reach (3) $9.5B $7.6B $470M $933M 370+ ~5,600 60K+ 5,000+ 225K+ Market Cap LTM Net Sales LTM Net Income LTM Adjusted EBITDA (2) Branches Associates Customers Suppliers Products U.S. Market Share (3) Total Market Share (3) $39B TAM (4) $44B TAM (4)(5) Market Mix (3) New Construction vs. Repair & Replace (3) Municipal 44% B Non-Residential Residential New Construction 509« Repair & Replace Leader in Advancing Reliable Infrastructure with Local Service, Nationwide Headquarters Branch locations (1) As of May 3, 2026. (2) Adjusted EBITDA is a non-GAAP financial measure. Refer to the appendix for a reconciliation to the nearest GAAP measure. (3) As of the fiscal year ended February 1, 2026. (4) Based on independent third-party research and management estimates. (5) Total addressable market is inclusive of the United States and Canada. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 12 PRODUCT & SERVICE OFFERING Fabricated Fire Protection Pipe and Sprinklers Lab, Plant and Field Operations Products Water and Wastewater Treatment Pipe, Valves and Fittings Reclaimed Water Systems Smart Utility Solutions Geosynthetics Ductile Iron and PVC Pipe, Valves, Fittings Storm Water and Hydrants Retention Systems Sewer Lines and Lift Station Equipment Corrugated HDPE Pipe Fusible HDPE Pipe, Storm Drainage, Fittings and Fusion Rental Manholes & Structures © Core & Main All Rights Reserved. Confidential and Proprietary Information. 13 SALES INITIATIVES DRIVING MARKET SHARE GAINS Smart Utility Treatment Plant Solutions Fusible HDPE Geosynthetics Strategic Accounts Geographic Expansion Industry-Leading Capabilities Drive Consistent Above Market Growth © Core & Main All Rights Reserved. Confidential and Proprietary Information. 14 CONSISTENT TRACK RECORD OF M&A 2017 2018 2019 2020 2021 2022 2023 2024 2025 Acquired Sales 3 Branches 4 Branches 27 Branches 15 Branches 18 Branches 14 Branches 20 Branches 40 Branches 5 Branches ~$50M ~$20M ~$200M ~$220M ~$150M ~$160M ~$330M ~$620M ~$95M ~145 Branches and ~$1.8B of Sales Acquired Since 2017 © Core & Main All Rights Reserved. Confidential and Proprietary Information. 15 Expect future capital expenditures to average ~0.7% - 0.8% of net sales Organic Growth & Operational Initiatives CAPITAL ALLOCATION FRAMEWORK Significant Cash Generation with a Focus on Fueling Growth & Shareholder Returns Operating Cash Flow Target ~60% - 70% of Adjusted EBITDA Priority Uses for Capital Deploy surplus capital towards share repurchases and/or dividends, subject to board approval and market conditions Share Repurchases or Dividends Maintain Flexible Balance Sheet with Net Debt Leverage Target of 1.5x - 3.0x Maintain a robust M&A pipeline and a disciplined approach to sourcing, acquiring and integrating businesses M&A © Core & Main All Rights Reserved. Confidential and Proprietary Information. 16 RECONCILIATION OF NON-GAAP MEASURES ($ in Millions) Adjusted EBITDA & Adjusted EBITDA Margin Three Months Ended Twelve Months Ended May 3, 2026 May 4, 2025 May 3, 2026 Net income attributable to Core & Main, Inc. $ 108 $ 100 $ 449 Plus: net income attributable to non-controlling interest 5 5 21 Net income 113 105 470 Depreciation and amortization (1) 46 47 185 Provision for income taxes 37 36 146 Interest expense 27 30 117 EBITDA $ 223 $ 218 $ 918 Equity-based compensation 3 5 15 Acquisition and other expenses (2) - 1 5 Other income - - (5) Adjusted EBITDA $ 226 $ 224 $ 933 Adjusted EBITDA Margin: Net Sales $ 1,910 $ 1,911 $ 7,646 Adjusted EBITDA / Net Sales 11.8% 11.7% 12.2% Net Income Margin: Net Sales $ 1,910 $ 1,911 $ 7,646 Net Income / Net Sales 5.9% 5.5% 6.1% (1) Includes depreciation of certain assets which are reflected in "cost of sales" in our Statement of Operations. (2) Represents expenses associated with acquisition and other activities, including transaction costs, post-acquisition employee retention bonuses, severance payments and expense recognition of purchase accounting fair value adjustments (excluding amortization). © Core & Main All Rights Reserved. Confidential and Proprietary Information. 17 RECONCILIATION OF NON-GAAP MEASURES Adjusted Diluted EPS Three Months Ended Fiscal Years Ended May 3, 2026 May 4, 2025 February 1, 2026 February 2, 2025 January 28, 2024 Diluted earnings per share $ 0.57 $ 0.52 $ 2.31 $ 2.13 $ 2.15 Amortization of intangible assets 0.18 0.18 0.75 0.75 0.54 Equity-based compensation 0.02 0.03 0.09 0.07 0.04 Acquisition and other expenses (1) - 0.01 0.03 0.05 0.03 Offering expenses (2) - - - - 0.02 Other income - - (0.03) - - Income tax impact of adjustments (3) (0.05) (0.06) (0.18) (0.22) (0.16) Adjusted Diluted Earnings Per Share $ 0.72 $ 0.68 $ 2.97 $ 2.78 $ 2.62 (1) Represents expenses associated with acquisition and other activities, including transaction costs, post-acquisition employee retention bonuses, severance payments and expense recognition of purchase accounting fair value adjustments (excluding amortization). (2) Represents costs related to our initial public offering and subsequent secondary offerings reflected in selling, general and administrative expenses in our Statement of Operations. (3) Represents the tax impact on the above non-GAAP adjustments. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 18 RECONCILIATION OF NON-GAAP MEASURES ($ in Millions, Except Share and Per Share Amounts) Free Cash Flow & Free Cash Flow Yield Twelve Months Ended Three Months Ended May 3, 2026 May 3, 2026 February 1, 2026 November 2, 2025 August 3, 2025 Operating Cash Flow $ 655 $ 82 $ 268 $ 271 $ 34 Less: Capital Expenditures (47) (14) (15) (8) (10) Free Cash Flow $ 608 $ 68 $ 253 $ 263 $ 24 Class A Shares (1) 187,866,769 Class B Shares (1) 6,347,204 Total Shares Outstanding 194,213,973 Share Price (1) $ 49.02 Market Capitalization 9,520 Free Cash Flow Yield 6.4% (1) As of May 1, 2026. © Core & Main All Rights Reserved. Confidential and Proprietary Information. 19 RECONCILIATION OF NON-GAAP MEASURES ($ in Millions) Net Debt As of May 3, 2026 May 4, 2025 Senior ABL Credit Facility due April 2031 $ - $ 100 Senior Term Loan due July 2028 1,230 1,245 Senior Term Loan due February 2031 930 939 Total Debt $ 2,160 $ 2,284 Less: Cash & Cash Equivalents (150) (8) Net Debt $ 2,010 $ 2,276 © Core & Main All Rights Reserved. Confidential and Proprietary Information. 20 Attention : This is an excerpt of the original content. To continue reading it, access the original document here .