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Core & Main (CNM)

Based in St. Louis, Core & Main is a leading specialized distributor of water, wastewater, storm drainage and fire protection products, and related services, to municipalities, private water companies and professional contractors across municipal, non-residential and residential end markets nationwide. With more than 285 locations, the company provides its customers local expertise backed by a national supply chain. Core & Main’s 3,700 associates are committed to helping their communities thrive with safe and sustainable infrastructure.

CNM stock data

Calendar

14 Jun 22
16 Aug 22
31 Dec 22
Quarter (USD) May 22 Jan 22 Oct 21 Aug 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Jan 22
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 1M 1M 1M 1M 1M 1M
Cash burn (monthly) (no burn) 5.47M (no burn) (no burn) 12.33M (no burn)
Cash used (since last report) n/a 19.34M n/a n/a 43.64M n/a
Cash remaining n/a -18.34M n/a n/a -42.64M n/a
Runway (months of cash) n/a -3.4 n/a n/a -3.5 n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
27 May 22 Jeffrey D Giles Class A Common Stock Sell Dispose S No Yes 25.0384 30,000 751.15K 4,146
27 May 22 Jeffrey D Giles Class A Common Stock Conversion Acquire C No No 0 30,000 0 34,146
27 May 22 Jeffrey D Giles Class B Common Stock and Limited Partnership Interests Class A Common Stock Conversion Dispose C No No 0 30,000 0 0
27 May 22 Jeffrey D Giles Class B Common Stock and Limited Partnership Interests Class A Common Stock Other Acquire J No No 0 30,000 0 30,000
27 May 22 Jeffrey D Giles Class B Common Stock and Limited Partnership Interests Class A Common Stock Other Dispose J Yes No 0 30,000 0 415,135
17 May 22 Jeffrey D Giles Class A Common Stock Sell Dispose S No Yes 22.0774 7,400 163.37K 4,146
17 May 22 Jeffrey D Giles Class A Common Stock Conversion Acquire C No No 0 7,400 0 11,546
17 May 22 Jeffrey D Giles Class B Common Stock and Limited Partnership Interests Class A Common Stock Conversion Dispose C No No 0 7,400 0 0
17 May 22 Jeffrey D Giles Class B Common Stock and Limited Partnership Interests Class A Common Stock Other Acquire J No No 0 7,400 0 7,400
17 May 22 Jeffrey D Giles Class B Common Stock and Limited Partnership Interests Class A Common Stock Other Dispose J Yes No 0 7,400 0 445,135
13F holders Current Prev Q Change
Total holders 139 118 +17.8%
Opened positions 46 44 +4.5%
Closed positions 25 12 +108.3%
Increased positions 70 43 +62.8%
Reduced positions 15 26 -42.3%
13F shares Current Prev Q Change
Total value 11.28B 12.7B -11.2%
Total shares 418.89M 418.46M +0.1%
Total puts 34.9K 8.2K +325.6%
Total calls 290.8K 19.7K +1376.1%
Total put/call ratio 0.1 0.4 -71.2%
Largest owners Shares Value Change
CD&R Investment Associates X 185.8M $5.64B 0.0%
Clayton, Dubilier & Rice 171.8M $4.16B -10.4%
Select Equity 11.64M $281.55M +35.0%
JHG Janus Henderson 6.68M $161.7M +25.7%
Vanguard 4.47M $108.19M +58.6%
Pictet Asset Management 4.12M $99.65M -0.5%
Victory Capital Management 3.07M $74.19M +35.7%
Amundi 2.71M $65.57M NEW
BLK Blackrock 2.15M $51.97M +55.9%
Robecosam 2.15M $51.95M NEW
Largest transactions Shares Bought/sold Change
Clayton, Dubilier & Rice 171.8M -20M -10.4%
Select Equity 11.64M +3.02M +35.0%
Norges Bank 0 -2.8M EXIT
Amundi 2.71M +2.71M NEW
Robecosam 2.15M +2.15M NEW
Robeco Institutional Asset Management B.V. 2.1M +2.1M NEW
Vanguard 4.47M +1.65M +58.6%
JHG Janus Henderson 6.68M +1.37M +25.7%
Vaughan Nelson Investment Management 1.34M +1.34M NEW
First Trust Advisors 1.17M +1.17M NEW

Financial report summary

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Risks
  • Risks Related to Our Business
  • We have been, and may continue to be, adversely impacted by declines and volatility in the U.S. residential and non-residential construction markets.
  • Our business and the market for our products and services generally are subject to slowdowns in municipal infrastructure spending, which have in the past, and may in the future, result in a decrease in our net sales and operating results through reduced sales of our products to our municipal and contractor customers.
  • We are subject to price fluctuations in our product costs, particularly with respect to the commodity-based products that we sell.
  • We are subject to inventory management risks. Insufficient inventory may result in lost sales opportunities or delayed revenue, while excess inventory may negatively impact our gross margin.
  • Our business is affected by general business and economic conditions, which could materially and adversely affect our business, financial position, results of operations and cash flows.
  • We may lose business to competitors through the competitive bidding process, which could adversely affect our business, financial position, results of operations and cash flows.
  • The development of alternatives to distributors of our products in the supply chain could cause a decrease in our net sales and operating results and limit our ability to grow our business.
  • If we are unable to hire, engage and retain key personnel, including sales representatives, qualified branch, district and regional managers and senior management, our business, financial position, results of operations and cash flows could be materially and adversely affected.
  • If we fail to identify, develop and maintain relationships with a sufficient number of qualified suppliers or our exclusive or restrictive supplier distribution rights are terminated, our ability to timely and efficiently access products that meet our standards for quality could be adversely affected or we may experience an increase in the costs of our products that could reduce our overall profitability.
  • A significant amount of our net sales are credit sales, which are made primarily to customers whose ability to pay is dependent, in part, upon the economic strength of the industry and geographic areas in which they operate.
  • We may not be able to identify new products and new product lines and integrate them into our distribution network, which could adversely affect our ability to compete.
  • The COVID-19 pandemic has had, and could continue to have, an adverse impact on our business, results of operations and financial condition.
  • We could incur significant costs in complying with environmental, health and safety laws or permitting regimes or as a result of satisfying any liability or obligation imposed under such laws or permitting regimes.
  • We are subject to regulation and regulatory change, and our costs of doing business could increase as a result of changes in U.S. federal, state, local or international regulations.
  • The nature of our business exposes us to product liability, construction defect and warranty claims and other litigation and legal proceedings.
  • Failure to achieve and maintain a high level of product quality as a result of our suppliers’ or manufacturers’ mistakes or inefficiencies could damage our reputation and negatively impact our revenue and results of operations.
  • We are subject to certain safety and labor risks associated with the distribution of our products.
  • An impairment of goodwill, intangible assets or other long-lived assets could have a material adverse effect on our financial position or results of operations.
  • Changes in tariffs and other trade restrictions could have a material adverse effect on our business, financial position, results of operations and cash flows.
  • Because we operate our business through highly dispersed locations across the United States, our operations may be materially adversely affected by inconsistent practices and the operating results of individual branches may vary.
  • Interruptions in the proper functioning of our information technology (“IT”) systems, including from cybersecurity threats, could disrupt operations and cause unanticipated increases in costs or decreases in net sales, or both.
  • We may need to raise additional capital, and we cannot be sure that additional financing will be available.
  • Our customer relationships are generally governed by purchase orders and job-specific customer agreements, as applicable, and not by long-term agreements, and, as a result, such customers have the right to change the terms under which they do business and/or terminate their relationship with us.
  • We are subject to risks associated with operating internationally.
  • We occupy most of our facilities under long-term non-cancelable leases and we may be unable to renew leases on favorable terms or at all.
  • Any deficiencies in our financial reporting or internal controls could adversely affect our business and the trading price of our Class A common stock.
  • Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more indebtedness, which may increase the risks to our financial condition and results of operations created by our indebtedness.
  • The agreements governing our indebtedness restrict our current and future operations and our ability, and the ability of our future subsidiaries, to engage in certain business and financial transactions, and, as a result, may adversely affect our business, financial position, results of operations and cash flows.
  • An increase in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability, decrease our liquidity and impact our solvency.
  • Changes in our credit ratings and outlook may reduce access to capital and increase borrowing costs.
  • Our ability to generate the significant amount of cash needed to pay interest and principal on our indebtedness and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control.
  • Our principal asset is our direct and indirect ownership interest in Holdings, and, accordingly, we depend on distributions from Holdings and its subsidiaries to pay our taxes and other expenses, including payments under each of the Tax Receivable Agreements. Our subsidiaries’ ability to make such distributions may be subject to various limitations and restrictions.
  • In certain cases, payments under the Tax Receivable Agreements to Continuing Limited Partners or Former Limited Partners may be accelerated or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreements.
  • If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), as a result of our ownership of Holdings, applicable restrictions could make it impractical for us to continue our business as currently contemplated and could have a material adverse effect on our business, financial position, results of operations and cash flows.
  • The market price of our Class A common stock may be volatile and could decline.
  • An active, liquid trading market for our common stock may not be sustained.
  • If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our Class A common stock price and trading volume could decline.
  • Fulfilling our obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, will be expensive and time-consuming, and any delays or difficulties in satisfying these obligations could have a material adverse effect on our future results of operations and our stock price.
  • The CD&R Investors control us and may have conflicts of interest with other stockholders.
  • Under our Certificate of Incorporation, the CD&R Investors and their affiliates and, in some circumstances, any of our directors and officers who is also a director, officer, employee, member or partner of the CD&R Investors and their affiliates, have no obligation to offer us corporate opportunities.
  • Future offerings of debt, Class A common stock, equity securities which would rank senior to our Class A common stock or other securities convertible or exchangeable into common or preferred stock, in connection with a financing, strategic investment, litigation settlement or employee arrangement or otherwise, may result in dilution to owners of our Class A common stock and/or may adversely affect the market price of our Class A common stock.
  • Anti-takeover provisions in our Certificate of Incorporation and By-laws could discourage, delay or prevent a change of control of our company and may affect the trading price of our Class A common stock.
  • We could be the subject of securities class action litigation due to future stock price volatility, which could divert management’s attention and materially and adversely affect our business, financial position, results of operations and cash flows.
  • We do not intend to pay dividends on our Class A common stock for the foreseeable future and, consequently, your ability to achieve a return on your investment depends on appreciation in the price of our Class A common stock.
  • We expect to continue to be a “controlled company” within the meaning of the NYSE listing standards and, as a result, we will qualify for, and currently intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
  • At such time as the CD&R Investors no longer control a majority of the voting power of our outstanding Class A common stock, we will no longer be a “controlled company” within the meaning of rules. However, we may continue to rely on exemptions from certain corporate governance requirements during a one-year transition period.
  • Our Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or stockholders.
Management Discussion
  • Core & Main is a Delaware corporation that was incorporated on April 9, 2021 for the purpose of facilitating our IPO and other related transactions, as described below, in order to carry on the business of Holdings and its consolidated subsidiaries. On July 27, 2021, we completed our initial public offering of 34,883,721 shares of Class A common stock at a price to the public of $20.00 per share. We received net proceeds of approximately $664 million, after deducting underwriting discounts and commissions. All of the net proceeds from the IPO, less $8 million of transaction costs directly attributable to the IPO, were utilized to purchase 34,883,721 newly issued Partnership Interests of Holdings for approximately $656 million in the aggregate. In turn, Holdings and Core & Main LP utilized the net proceeds from the IPO directly or indirectly received from Core & Main in the Refinancing Transactions (as defined and described under “—Refinancing Transactions.”)

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