Cover
Cover - shares | 6 Months Ended | |
Aug. 01, 2021 | Sep. 14, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 1, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-40650 | |
Entity Registrant Name | Core & Main, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-3149194 | |
Entity Address, Address Line One | 1830 Craig Park Court | |
Entity Address, City or Town | St. Louis | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 63146 | |
City Area Code | 314 | |
Local Phone Number | 432-4700 | |
Title of 12(b) Security | Class A common stock, par value $0.01 per share | |
Trading Symbol | CNM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001856525 | |
Current Fiscal Year End Date | --01-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 160,067,161 | |
Class B common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 85,853,383 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 66.6 | $ 380.9 |
Receivables, net of allowance for credit losses of $5.0 and $4.6 | 832.9 | 556.8 |
Inventories | 593.2 | 383.8 |
Prepaid expenses and other current assets | 15.6 | 15.6 |
Total current assets | 1,508.3 | 1,337.1 |
Property, plant and equipment, net | 82.2 | 86.2 |
Operating lease right-of-use assets | 144.2 | 128.5 |
Intangible assets, net | 861.7 | 919.2 |
Goodwill | 1,452.5 | 1,452.7 |
Other assets | 4.4 | 0 |
Total assets | 4,053.3 | 3,923.7 |
Current liabilities: | ||
Current maturities of long-term debt | 15 | 13 |
Accounts payable | 564.9 | 325.7 |
Accrued compensation and benefits | 68 | 70.7 |
Current operating lease liabilities | 45.4 | 42.8 |
Other current liabilities | 51.5 | 70.1 |
Total current liabilities | 744.8 | 522.3 |
Long-term debt | 1,462 | 2,251.7 |
Non-current operating lease liabilities | 98.8 | 85.9 |
Deferred income taxes | 87.8 | 232.1 |
Payable to related parties pursuant to Tax Receivable Agreements | 88.6 | 0 |
Other liabilities | 23.3 | 31 |
Total liabilities | 2,505.3 | 3,123 |
Commitments and contingencies | ||
Partners' capital | 800.7 | |
Additional paid-in capital | 1,090.3 | |
Accumulated deficit | (20) | |
Accumulated other comprehensive loss | (0.8) | |
Total stockholders equity attributable to Core & Main, Inc. | 1,071.9 | |
Total partners' capital attributable to Core & Main, Inc. | 800.7 | |
Non-controlling interests | 476.1 | |
Non-controlling interests | 0 | |
Total partners' capital/stockholders equity | 1,548 | |
Total partners' capital/stockholders equity | 800.7 | |
Total liabilities and partners' capital/stockholders equity | 4,053.3 | $ 3,923.7 |
Class A common stock | ||
Current liabilities: | ||
Common stock | 1.5 | |
Class B common stock | ||
Current liabilities: | ||
Common stock | $ 0.9 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 5 | $ 4.6 |
Class A common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | |
Common stock, authorized (in shares) | 1,000,000,000 | |
Common stock, issued (in shares) | 154,834,603 | |
Common stock, outstanding (in shares) | 154,834,603 | |
Class B common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | |
Common stock, authorized (in shares) | 500,000,000 | |
Common stock, issued (in shares) | 85,853,383 | |
Common stock, outstanding (in shares) | 85,853,383 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | ||
Income Statement [Abstract] | |||||
Net sales | $ 1,297.6 | $ 955.9 | $ 2,352.7 | $ 1,798 | |
Cost of sales | 972.4 | 725.3 | 1,770.7 | 1,368.2 | |
Gross profit | 325.2 | 230.6 | 582 | 429.8 | |
Operating expenses: | |||||
Selling, general and administrative | 191.8 | 136.8 | 345.7 | 273.8 | |
Depreciation and amortization | 33.6 | 34.3 | 67.4 | 67.8 | |
Total operating expenses | 225.4 | 171.1 | 413.1 | 341.6 | |
Operating income | 99.8 | 59.5 | 168.9 | 88.2 | |
Interest expense | 36.8 | 35 | 72.3 | 68.2 | |
Loss on debt modification and extinguishment | 50.4 | 0 | 50.4 | 0 | |
Income before provision for income taxes | 12.6 | 24.5 | 46.2 | 20 | |
Provision for income taxes | 3.1 | 6.4 | 9.3 | 5.1 | |
Net income | 9.5 | 18.1 | 36.9 | 14.9 | |
Less: net loss attributable to non-controlling interests | (17) | (17) | |||
Net income attributable to Core & Main, Inc. | $ 26.5 | $ 18.1 | $ 53.9 | $ 14.9 | |
Loss per share: | |||||
Basic (in dollars per share) | [1] | $ (0.14) | $ (0.14) | ||
Diluted (in dollars per share) | [1] | $ (0.14) | $ (0.14) | ||
Number of shares used in computing EPS | |||||
Basic (shares) | [1] | 138,978,366 | 138,978,366 | ||
Diluted (shares) | [1] | 138,978,366 | 138,978,366 | ||
Net sales [Extensible Enumeration] | us-gaap:ProductAndServiceOtherMember | us-gaap:ProductAndServiceOtherMember | us-gaap:ProductAndServiceOtherMember | us-gaap:ProductAndServiceOtherMember | |
Cost of sales [Extensible Enumeration] | us-gaap:ProductAndServiceOtherMember | us-gaap:ProductAndServiceOtherMember | us-gaap:ProductAndServiceOtherMember | us-gaap:ProductAndServiceOtherMember | |
[1] | Represents basic and diluted loss per share of Class A common stock and weighted average shares of Class A common stock outstanding for the period from July 23, 2021 through August 1, 2021, the period following the Reorganization Transactions described in Note 1. See Note 12 for additional information on basic and diluted loss per share. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 9.5 | $ 18.1 | $ 36.9 | $ 14.9 |
Net interest rate swap gain (loss), net of tax (expense) benefit of $(0.9), $(0.3), $(1.2) and $0.1 | 4.7 | 1.6 | 6.6 | (0.8) |
Total comprehensive income | 14.2 | $ 19.7 | 43.5 | $ 14.1 |
Less: comprehensive loss attributable to non-controlling interests | (15.7) | (15.7) | ||
Total comprehensive income attributable to Core & Main, Inc. | $ 29.9 | $ 59.2 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net interest rate swap gain (loss), tax (expense) benefit | $ (0.9) | $ (0.3) | $ (1.2) | $ 0.1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Partners' Capital/Stockholders' Equity - USD ($) $ in Millions | Total | Interest rate swap 1 | Interest rate swap 2 | Partners' Capital | Common StockClass A common stock | Common StockClass B common stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive LossInterest rate swap 1 | Accumulated Other Comprehensive LossInterest rate swap 2 | Accumulated Deficit | Non-Controlling Interests | Non-Controlling InterestsInterest rate swap 1 | Non-Controlling InterestsInterest rate swap 2 |
Beginning balance at Feb. 02, 2020 | $ 770.5 | $ 770.5 | ||||||||||||
Partners' Capital | ||||||||||||||
Equity investment from partners | 0.7 | 0.7 | ||||||||||||
Equity-based compensation | 1 | 1 | ||||||||||||
Net income | (3.2) | (3.2) | ||||||||||||
Net interest rate swap gain, net of tax | (2.4) | (2.4) | ||||||||||||
Distributions to partners | (0.2) | (0.2) | ||||||||||||
Ending balance at May. 03, 2020 | 766.4 | 766.4 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | (3.2) | (3.2) | ||||||||||||
Beginning balance at Feb. 02, 2020 | 770.5 | 770.5 | ||||||||||||
Partners' Capital | ||||||||||||||
Net income | 14.9 | |||||||||||||
Ending balance at Aug. 02, 2020 | 780.6 | 780.6 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 14.9 | |||||||||||||
Net interest rate swap gain (loss), net of tax | (0.8) | |||||||||||||
Beginning balance at May. 03, 2020 | 766.4 | 766.4 | ||||||||||||
Partners' Capital | ||||||||||||||
Equity investment from partners | 0.1 | 0.1 | ||||||||||||
Equity-based compensation | 1 | 1 | ||||||||||||
Net income | 18.1 | 18.1 | ||||||||||||
Net interest rate swap gain, net of tax | 1.6 | 1.6 | ||||||||||||
Distributions to partners | (6.6) | (6.6) | ||||||||||||
Ending balance at Aug. 02, 2020 | 780.6 | 780.6 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 18.1 | 18.1 | ||||||||||||
Net interest rate swap gain (loss), net of tax | 1.6 | |||||||||||||
Beginning balance at Jan. 31, 2021 | 800.7 | 800.7 | ||||||||||||
Partners' Capital | ||||||||||||||
Equity investment from partners | 0.3 | 0.3 | ||||||||||||
Equity-based compensation | 1 | 1 | ||||||||||||
Net income | 27.4 | 27.4 | ||||||||||||
Net interest rate swap gain, net of tax | 1.9 | 1.9 | ||||||||||||
Distributions to partners | (10.4) | (10.4) | ||||||||||||
Ending balance at May. 02, 2021 | 820.9 | 820.9 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 27.4 | 27.4 | ||||||||||||
Beginning balance at Jan. 31, 2021 | 800.7 | 800.7 | ||||||||||||
Partners' Capital | ||||||||||||||
Net income | 36.9 | |||||||||||||
Ending balance at Aug. 01, 2021 | 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 36.9 | |||||||||||||
Net interest rate swap gain (loss), net of tax | 6.6 | |||||||||||||
Ending balance at Aug. 01, 2021 | 1,548 | $ 1.5 | $ 0.9 | $ 1,090.3 | $ (0.8) | $ (20) | $ 476.1 | |||||||
Beginning balance at May. 02, 2021 | 820.9 | 820.9 | ||||||||||||
Partners' Capital | ||||||||||||||
Net income | 9.5 | |||||||||||||
Ending balance at Aug. 01, 2021 | 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 9.5 | |||||||||||||
Net interest rate swap gain (loss), net of tax | 4.7 | |||||||||||||
Ending balance at Aug. 01, 2021 | 1,548 | $ 1.5 | $ 0.9 | 1,090.3 | (0.8) | (20) | 476.1 | |||||||
Beginning balance at May. 02, 2021 | 820.9 | 820.9 | ||||||||||||
Partners' Capital | ||||||||||||||
Equity-based compensation | 14 | 14 | ||||||||||||
Net income | 46.5 | 46.5 | ||||||||||||
Net interest rate swap gain, net of tax | 1.7 | 1.7 | ||||||||||||
Distributions to partners | (12.5) | (12.5) | ||||||||||||
Ending balance at Jul. 22, 2021 | 870.6 | 870.6 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 46.5 | 46.5 | ||||||||||||
Net income | (37) | (20) | (17) | |||||||||||
Ending balance at Aug. 01, 2021 | 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Reclassification of partners' capital | 0 | $ (870.6) | 870.6 | |||||||||||
Reorganization transactions (in shares) | 119,950,882 | 85,853,383 | ||||||||||||
Reorganization transactions | 0 | $ 1.2 | $ 0.9 | (2.1) | ||||||||||
Reclassification of non-controlling interests upon reorganization | 0 | (299.5) | (2.3) | 301.8 | ||||||||||
Issuance of Class A Shares, net of issuance costs | 34,883,721 | |||||||||||||
Issuance of Class A Shares, net of issuance costs | 655.9 | $ 0.3 | 655.6 | |||||||||||
Non-controlling interests adjustment for purchase of Partnership Interests from Core & Main Holdings, LP | 0 | (180.1) | (0.2) | 180.3 | ||||||||||
Adjustment of deferred tax liability associated with Core & Main investment in Core & Main Holdings, LP | 139.6 | 139.6 | ||||||||||||
Impact of Former Limited Partners Tax Receivable Agreement | (88.6) | (88.6) | ||||||||||||
Net income (loss) | (37) | (20) | (17) | |||||||||||
Equity-based compensation | 4.5 | 2.9 | 1.6 | |||||||||||
Net interest rate swap gain (loss), net of tax | $ 4.3 | $ (1.3) | $ 2.5 | $ (0.8) | $ 1.8 | $ (0.5) | ||||||||
Non-controlling interests adjustment for vesting of Core & Main Holdings, LP Partnership Interests held by non-controlling interests | 0 | (8.1) | 8.1 | |||||||||||
Ending balance at Aug. 01, 2021 | $ 1,548 | $ 1.5 | $ 0.9 | $ 1,090.3 | $ (0.8) | $ (20) | $ 476.1 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Shares, Outstanding | 154,834,603 | 85,853,383 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Aug. 01, 2021 | Aug. 02, 2020 | |
Cash Flows From Operating Activities: | ||
Net income | $ 36.9 | $ 14.9 |
Adjustments to reconcile net cash from operating activities: | ||
Depreciation and amortization | 75.2 | 75.6 |
Provision for bad debt | 0.9 | 1.6 |
Non-cash inventory charge | 0 | 0.6 |
Equity-based compensation expense | 19.5 | 2 |
Loss on debt modification and extinguishment | 48.4 | 0 |
Other | (3.6) | (0.2) |
Changes in assets and liabilities: | ||
(Increase) decrease in receivables | (276.5) | (79.9) |
(Increase) decrease in inventories | (209.4) | (21.2) |
(Increase) decrease in other assets | (0.3) | 4 |
Increase (decrease) in accounts payable | 238.7 | 91.6 |
Increase (decrease) in accrued liabilities | (23.8) | (3) |
Increase (decrease) in other liabilities | (5.1) | 7.2 |
Net cash (used in) provided by operating activities | (99.1) | 93.2 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (8.1) | (5.7) |
Acquisitions of businesses, net of cash acquired | 0 | (206.1) |
Settlement of interest rate swap | (5.2) | 0 |
Proceeds from the sale of property and equipment | 0.4 | 0.1 |
Net cash used in investing activities | (12.9) | (211.7) |
Cash Flows From Financing Activities: | ||
IPO proceeds, net of underwriting discounts and commissions | 663.7 | 0 |
Payments for offering costs | (5.1) | 0 |
Partnership investment | 0.3 | 0.8 |
Partnership distributions | (19.5) | (6.8) |
Borrowings on asset-based revolving credit facility | 0 | 460 |
Repayments on asset-based revolving credit facility | 0 | (460) |
Issuance of long-term debt | 1,500 | 250 |
Repayments of long-term debt | (2,311.1) | (6.5) |
Payment of contingent consideration | (0.3) | 0 |
Payment of debt redemption premiums | (17.5) | 0 |
Debt issuance costs | (12.8) | (8.1) |
Net cash (used in) provided by financing activities | (202.3) | 229.4 |
(Decrease) increase in cash and cash equivalents | (314.3) | 110.9 |
Cash and cash equivalents at the beginning of the period | 380.9 | 180.9 |
Cash and cash equivalents at the end of the period | $ 66.6 | $ 291.8 |
Basis of Presentation & Descrip
Basis of Presentation & Description of Business | 6 Months Ended |
Aug. 01, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation & Description of Business | BASIS OF PRESENTATION & DESCRIPTION OF BUSINESS Organization Core & Main , Inc. (“Core & Main”) is a Delaware corporation that was incorporated on April 9, 2021 for the purpose of facilitating an initial public offering (“IPO”) and other related transactions, as described below, in order to carry on the business of Core & Main Holdings, LP, a Delaware limited partnership (“Holdings”), and its consolidated subsidiaries. Core & Main is a holding company and its sole material asset is its ownership interest in Holdings, a portion of which is held indirectly through CD&R WW, LLC. Holdings has no operations and no material assets of its own other than its indirect ownership interest in Core & Main LP, a Florida limited partnership, the legal entity that conducts the operations of Core & Main. Core & Main, together with its wholly-owned subsidiaries, including Holdings and its consolidated subsidiaries, are referred to as the "Company". The Company 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. The Company's specialty products and services are used in the maintenance, repair, replacement, and construction of water and fire protection infrastructure. The Company reaches customers through a nationwide network of more than 285 branches across 48 states. The Company's products include pipes, valves, fittings, storm drainage products, fire protection products, meter products and other products for use in the construction, maintenance and repair of water and waste-water systems as well as fire protection systems. The Company has complemented its core products through additional offerings, including smart meter systems, fusible high density polyethylene (“fusible HDPE”) piping solutions and specifically engineered treatment plant products, services and geosynthetics used in erosion control. The Company’s services and capabilities allow for integration with customers and form part of their sourcing and procurement function. All of the Company's long-lived assets are located within the United States (“U.S.”). Initial Public Offering On July 27, 2021, Core & Main completed its IPO of 34,883,721 shares of Class A common stock at a price to the public of $20.00 per share (the "IPO Transaction"). Core & Main received net proceeds of approximately $663.7 million, after deducting underwriting discounts and commissions. All of the net proceeds from the IPO Transaction, less $7.8 million of transactions costs directly attributable to the IPO Transaction, were utilized to purchase 34,883,721 newly issued limited partner interests of Holdings (“Partnership Interests”) for approximately $655.9 million in the aggregate. Holdings and its consolidated subsidiaries used these amounts received from Core & Main, the proceeds from the Refinancing Transactions (as defined below in Note 6) and cash on hand to repay certain existing indebtedness. On August 20, 2021, Core & Main issued 5,232,558 shares of Class A common stock pursuant to the full exercise of the underwriters' option to purchase additional shares of Class A common stock in connection with the IPO Transaction at the initial public offering price of $20.00 per share before underwriting discounts and commissions. Holdings and its consolidated subsidiaries intend to use the net proceeds received from Core & Main for general corporate purposes. See Note 15 for additional information. Reorganization Transactions In connection with the IPO, the Company completed the following transactions (collectively the “Reorganization Transactions”): • the formation of Core & Main as a Delaware corporation to function as the direct and indirect parent of Holdings and a publicly traded entity; • the amendment and restatement of the limited partnership agreement of Holdings to, among other things first, modify the capital structure of Holdings and second, admit Core & Main as the general partner and a limited partner of Holdings; • Core & Main’s acquisition of the Partnership Interests held by certain Former Limited Partners (as defined below) and the issuance of Class A common stock to the Former Limited Partners, pursuant to the mergers of CD&R WW Advisor, LLC and CD&R WW Holdings, LLC (the "Blocker Companies") with and into Core & Main via merger subsidiaries of Core & Main (the “Blocker Mergers”); and • entry into a Master Reorganization Agreement, dated as of July 22, 2021 (the “Master Reorganization Agreement”), with Holdings, the Continuing Limited Partners (as defined below), the Blocker Companies, CD&R Waterworks Holdings GP, CD&R Associates X Waterworks, L.P., CD&R WW Holdings, L.P., Core & Main GP, LLC, CD&R Plumb Buyer, LLC, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P., CD&R Fund X-A Waterworks B, L.P., CD&R WW, LLC, Brooks Merger Sub 1, Inc. and Brooks Merger Sub 2, Inc. Pursuant to the Master Reorganization Agreement, the Former Limited Partners received Partnership Interests in exchange for their indirect ownership interests in Holdings and exchanged these Partnership Interests for shares of Class A common stock of Core & Main prior to the consummation of the IPO Transaction. The Former Limited Partners are defined as CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P., CD&R Fund X-A Waterworks B, L.P. and the other Original Limited Partners (as defined below) that transferred all or a portion of their Partnership Interests (including those held indirectly through the Blocker Companies) for shares of Class A common stock in connection with the Reorganization Transactions and the IPO Transaction, and represent entities that transferred all of their Partnership Interests (including Partnership Interests held indirectly through certain “blocker” corporations) for shares of Class A common stock in connection with the consummation of the Reorganization Transactions. The Continuing Limited Partners are defined as CD&R Waterworks Holdings, LLC (“CD&R Waterworks Holdings”) and Core & Main Management Feeder, LLC (“Management Feeder”), and represent the Original Limited Partners that continued to own Partnership Interests after the Reorganization Transactions and that are entitled to exchange their Partnership Interests and shares of Class B common stock for shares of Class A common stock. The Original Limited Partners are defined as CD&R Waterworks Holdings, the Former Limited Partners and Management Feeder and represent the direct and indirect owners of Holdings prior to the Reorganization Transactions and the IPO Transaction. Immediately following and as a result of the IPO Transaction and Reorganization Transactions and the use of proceeds therefrom as described above: • the investors in the IPO Transaction collectively held 34,883,721 shares of Class A common stock and, following the closing of the issuance and sale of an additional 5,232,558 shares of Class A common stock on August 20, 2021 pursuant to the full exercise of the underwriters’ option to purchase additional shares of Class A common stock in connection with the IPO, collectively held 40,116,279 shares of Class A common stock; • the Former Limited Partners collectively held 119,950,882 shares of Class A common stock; • Core & Main, directly or indirectly through its wholly-owned subsidiary, held 154,834,603 Partnership Interests and, following the closing of the issuance and sale of an additional 5,232,558 shares of Class A common stock described above and the issuance of an additional 5,232,558 from Holdings to Core & Main, held 160,067,161 Partnership Interests; and • the Continuing Limited Partners collectively held 85,853,383 Partnership Interests and 85,853,383 shares of Class B common stock. Core & Main is a holding company whose sole material asset is the direct and indirect ownership interest in Holdings, which also is a holding company and indirectly holds the sole equity interests in the Company's operating subsidiary. Because Core & Main is the general partner of Holdings, it operates and controls all of the business and affairs of Holdings and its subsidiaries. Therefore, the condensed consolidated financial statements of Core & Main include the consolidated financial statements of Holdings. The ownership interest of the Continuing Limited Partners related to Partnership Interests held by the Continuing Limited Partners is reflected as non-controlling interests in Core & Main’s condensed consolidated financial statements. As the Reorganization Transactions are accounted for as transactions between entities under common control, the financial statements for the periods prior to the IPO and Reorganization Transactions have been adjusted to combine previously separate entities for presentation purposes. These entities include Core & Main, Holdings and its consolidated subsidiaries and the Blocker Companies. Prior to the Reorganization Transactions, Core & Main had no operations. Prior to the Reorganization Transactions, the Blocker Companies were holding companies for indirect investments in Holdings. The Blocker Companies had no operations but did receive distributions from Holdings associated with their tax obligations from allocations of Holdings' taxable income. As such, the Blocker Companies' financial statements reflected tax provisions and operating cash outflows for payments to taxing authorities. Their balance sheets collectively included $330.0 million of goodwill; and deferred tax liabilities and equity. In connection with the Blocker Mergers, Core & Main assumed the balance sheets of the Blocker Companies. Basis of Presentation The accompanying unaudited condensed consolidated financial statements present the results of operations, financial position and cash flows of Core & Main and its subsidiaries, which includes the consolidated financial statements of Holdings and its consolidated subsidiary, Core & Main LP, as the legal entity that conducts the operations of the Company. Holdings is considered a variable interest entity. Core & Main is the primary beneficiary and general partner of Holdings and has decision making authority that significantly affects the economic performance of the entity. As a result, Core & Main consolidates the consolidated financial statements of Holdings. All intercompany balances and transactions have been eliminated in consolidation. The Company records non-controlling interests related to Partnership Interest held by the Continuing Limited Partners in Holdings. For the periods prior to the Reorganization Transactions, the condensed consolidated financial statements of the Company include the Blocker Companies, which were merged into Core & Main as part of the Blocker Mergers. In management’s opinion, the unaudited condensed consolidated financial information for the interim periods presented include all normal recurring adjustments necessary for a fair statement of the Company's results of operations, financial position and cash flows, which include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim unaudited condensed consolidated financial statements may not be the same as those for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Holdings audited consolidated financial statements and the related notes thereto as of and for the fiscal year ended January 31, 2021 included in the prospectus (File No. 333-256382), dated July 22, 2021, filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on July 26, 2021 (the “Prospectus”). Segments The Company’s chief operating decision maker (“CODM”) manages the business as a single operating and reportable segment. The Company operates more than 285 branch locations across the U.S. The nature of the products and services, vendors, customers and distribution methods are similar across branches. Accordingly, the CODM evaluates the performance of the business and makes management decisions on a consolidated basis. Performance is most notably measured based on Adjusted EBITDA at the consolidated level. The consolidated performance of the Company is utilized to determine incentive compensation for executive officers, annual merit decisions, management of national vendor relationships, allocation of resources and in evaluating acquisitions and the Company's capital structure. Fiscal Year The Company’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31 st . Quarters within the fiscal year include 13-week periods, unless a fiscal year includes a 53 rd week, in which case the fourth quarter of the fiscal year will be a 14-week period. Both the three months ended August 1, 2021 and three months ended August 2, 2020 included 13 weeks, and both the six months ended August 1, 2021 and six months ended August 2, 2020 included 26 weeks. The current fiscal year ending January 30, 2022 ("fiscal 2021") will include 52 weeks. Estimates Management has made a number of estimates and assumptions relating to the reporting of certain assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing the elements of these financial statements in conformity with U.S. GAAP. Actual results could differ from these estimates. Accounting Policies The Company’s significant accounting policies are discussed in Note 2 to Holdings' audited consolidated financial statements in the Prospectus. There have been no significant changes to these policies which have had a material impact on the Company’s interim unaudited condensed consolidated financial statements and related notes during the three and six months ended August 1, 2021, except as noted below. Income Taxes As a result of the Reorganization Transactions, Core & Main became the general partner of Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Holdings is not generally subject to U.S. federal and certain state and local income taxes. Any taxable income or loss from Holdings is passed through to and included in the taxable income or loss of its partners, including Core & Main, following the Reorganization Transactions. Core & Main is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to Core & Main’s allocable share of any taxable income or loss of Holdings following the Reorganization Transactions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If it is determined that the Company is not able to realize deferred tax assets in the future a valuation allowance would be established, which would impact the provision for income taxes. Uncertain tax positions are recorded on the basis of a two-step process in which (1) it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records interest and penalties related to uncertain tax positions in the provision for income taxes in the unaudited Condensed Consolidated Statements of Operations. The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments. Tax Receivable Agreements In connection with the Reorganization Transactions and the IPO Transaction, Core & Main entered into a tax receivable agreement with the Former Limited Partners ("Former Limited Partners Tax Receivable Agreement") and a tax receivable agreement with the Continuing Limited Partners ("Continuing Limited Partners Tax Receivable Agreement") (collectively, the "Tax Receivable Agreements"). Under these agreements, Core & Main expects to generate tax attributes that will reduce amounts that it would otherwise pay in the future to various tax authorities. The Former Limited Partners Tax Receivable Agreement provides for the payment by Core & Main to certain Former Limited Partners, or their permitted transferees, of 85% of the tax benefits, if any, that Core & Main actually realizes, or in some circumstances is deemed to realize, as a result of (i) certain tax attributes of the Partnership Interests Core & Main holds in respect of such Former Limited Partners’ interest in Core & Main, including such attributes which resulted from such Former Limited Partners’ prior acquisition of ownership interests in Holdings and Core & Main's allocable share of existing tax basis acquired in connection with the IPO Transaction attributable to the Former Limited Partners and (ii) certain other tax benefits. The Continuing Limited Partners Tax Receivable Agreement provides for the payment by Core & Main to the Continuing Limited Partners, or their permitted transferees, of 85% of the benefits, if any, that Core & Main realizes, or in some circumstances is deemed to realize, as a result of (i) increases in tax basis or other similar tax benefits as a result of exchanges of Partnership Interests for cash or shares of Class A common stock pursuant to the Exchange Agreement, dated as of July 22, 2021 (the "Exchange Agreement"), by and among Core & Main, Holdings, CD&R Waterworks Holdings and Management Feeder, (ii) Core & Main's allocable share of existing tax basis acquired in connection with the IPO Transaction attributable to the Continuing Limited Partners and in connection with exchanges of Partnership Interests for cash or shares of Class A common stock pursuant to the Exchange Agreement and (iii) Core & Main's utilization of certain other tax benefits related to Core & Main's entering into the Continuing Limited Partners Tax Receivable Agreement, including tax benefits attributable to payments under the Continuing Limited Partners Tax Receivable Agreement. Core & Main expects to obtain an increase in its share of the tax basis in the net assets of Holdings as Partnership Interests are exchanged by Continuing Limited Partners. Core & Main intends to treat any exchanges of Partnership Interests as direct purchases of Partnership Interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that it would otherwise pay in the future to various tax authorities. Core & Main will receive the full benefit in tax savings from relevant taxing authorities and provide payment of 85% of the amount of any tax benefits Core & Main actually realizes to the Former Limited Partners or the Continuing Limited Partners, as applicable, or their permitted transferees. Core & Main expects to benefit from the remaining 15% of any cash tax savings that it realizes. For the Tax Receivable Agreements, Core & Main will assess the tax attributes to determine if it is more likely than not that the benefit of any deferred tax assets will be realized. Following that assessment, Core & Main will recognize a liability under the applicable Tax Receivable Agreements, reflecting approximately 85% of the expected future realization of such tax benefits. Amounts payable under the Tax Receivable Agreements are contingent upon, among other things, (i) generation of sufficient future taxable income during the term of the applicable Tax Receivable Agreements and (ii) future changes in tax laws. Equity-Based Compensation The Company recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant date fair value of those awards. That cost is recognized over the requisite service period (generally the vesting period), which is the period during which an employee is required to provide service in exchange for the award. In connection with the Reorganization Transactions, which included the recapitalization of Management Feeder and entry into the Exchange Agreement, the equity awards issued by Holdings and held by Management Feeder were deemed to be modified for accounting purposes. The Company calculated the incremental fair value associated with the modification and will recognize this incremental fair value immediately for each vested award with no remaining service period and over the remaining service period associated with each unvested award. Basic and Diluted Loss per Share Basic loss per share is computed by dividing net loss attributable to Core & Main for the period following the Reorganization Transactions by the weighted average number of shares of Class A common stock outstanding during the same period. Shares of Class A common stock issued during that period, including shares of Class A common stock issued in the IPO Transaction, were weighted for the portion of that period in which the shares of Class A common stock were outstanding. The Company did not apply the two-class method because shares of Class B common stock have voting rights but no economic rights to participate in earnings or losses of Core & Main. As a result, no earnings or loss per share of Class B common stock was presented. Losses allocated to holders of non-controlling interests were excluded from losses available to the Class A common stock. There were no preferred dividends and no shares of preferred stock outstanding for the period. The diluted net loss per share calculation includes the basic weighted average number of shares of Class A common stock outstanding plus the dilutive impact of potential outstanding shares of Class A common stock that would be issued upon exchange of Partnership Interests and shares of Class B common stock, under the if-converted method, if dilutive. The treasury stock method is applied to outstanding awards, including unvested Partnership Interests and outstanding stock appreciation rights. Non-controlling Interests The non-controlling interests represent the Partnership Interests of Holdings held by the Continuing Limited Partners. Income or loss is attributed to the non-controlling interests based on the weighted average percentage of Partnership Interests held by Continuing Limited Partners, excluding unvested Partnership Interests held by Management Feeder, relative to all Partnership Interests of Holdings during the period following the Reorganization Transactions. The non-controlling interests’ ownership percentage may fluctuate over time as the Continuing Limited Partners exchange Partnership Interests and shares of Class B common stock for shares of Class A common stock and Partnership Interests held by Management Feeder vest. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Aug. 01, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Cloud computing arrangements - In August 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). The new guidance aligns the requirements for capitalizing implementation costs in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. ASU 2018-15 is effective for annual periods beginning after December 15, 2019, and interim periods within these annual periods. The standard permits two approaches, one requiring prospective application to eligible costs incurred on or after the date this guidance is first applied and one requiring retrospective application. The Company adopted the provisions of ASU 2018-15 during the first quarter of the fiscal year ended January 31, 2021 (“fiscal 2020”) using the prospective method. The adoption of ASU 2018-15 did not have a material impact on the Company's financial position, results of operations or cash flows. The Company made no adjustments to its financial position upon adoption. Measurement of Credit Losses - In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). The new guidance introduces a new accounting model for recognizing expected credit losses upon the initial recognition of certain financial instruments, including accounts receivable, based on historical information, current information, and forecasted future events. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within these annual periods. The Company adopted the provisions of ASU 2016-13 during the first quarter of fiscal 2020, using the modified retrospective approach. The adoption of ASU 2016-13 did not result in a material impact to the Company's financial position, results of operations or cash flows upon adoption. Accounting for Income Taxes - In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside tax basis. The transition requirements are dependent upon each amendment within ASU 2019-12 and will be applied either prospectively or retrospectively. The Company adopted the provisions of ASU 2019-12, during the second quarter of fiscal 2021. The adoption of ASU 2019-12 did not result in a material impact to the Company's financial position, results of operations or cash flows upon adoption. Not Yet Adopted Reference Rate Reform - In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by ASU 2020-04 are effective for prospective contract modifications made and qualifying hedging relationships entered into as of March 12, 2020 through December 31, 2022. As discussed in Note 6, the debt modification performed by the Company on July 27, 2021 did not qualify under the guidance of ASU 2020-04 as the debt and interest rate swap instruments continue to reference LIBOR. At the time of a qualifying transaction and/or modification of debt and interest rate swap instruments to replace LIBOR with a new interest rate index, the Company will consider the application of ASU 2020-04. |
Revenue
Revenue | 6 Months Ended |
Aug. 01, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Disaggregation of Revenue The following table represents net sales disaggregated by product category: Three Months Ended Six Months Ended Product Category August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Pipes, valves & fittings products $ 887.8 $ 621.7 $ 1,592.8 $ 1,160.3 Storm drainage products 172.8 142.6 302.5 246.6 Fire protection products 137.9 101.0 256.6 209.2 Meter products 99.1 90.6 200.8 181.9 Total Net Sales $ 1,297.6 $ 955.9 $ 2,352.7 $ 1,798.0 |
Acquisitions
Acquisitions | 6 Months Ended |
Aug. 01, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | ACQUISITIONS R&B Co. On March 11, 2020, the Company completed the acquisition of all of the outstanding shares of R&B Co. (“R&B”) in a transaction valued at $215.0 million, subject to a working capital adjustment (the “R&B Acquisition”). The transaction price consisted of $212.0 million of initial cash consideration, subject to working capital adjustments, and $3.0 million of contingent consideration to be paid upon satisfaction of certain conditions to either the sellers of R&B or certain former R&B employees and recognized as compensation expense. During the six months ended August 1, 2021 the Company settled the R&B contingent consideration liability. This resulted in a financing cash outflow of $0.3 million to the R&B sellers for the six months ended August 1, 2021. With the R&B Acquisition, the Company added approximately 10 branch locations to the business, which expanded the Company's presence in California and strengthened the Company's ability to offer complementary waterworks products and fusible services. The transaction price was funded with cash on hand. The following represents the final allocation of the transaction price to the fair value of identifiable assets acquired and liabilities assumed in the R&B Acquisition. R&B Acquisition Cash $ 2.7 Accounts receivable 25.0 Inventories 19.8 Intangible assets 114.5 Goodwill 88.4 Operating lease right-of-use assets 9.5 Other assets, current and non-current 10.7 Total assets acquired 270.6 Accounts payable 17.5 Deferred income taxes 31.2 Operating lease liabilities 9.5 Other liabilities, current and non-current 3.6 Net assets acquired $ 208.8 The following reconciles the total consideration to net assets acquired: R&B Acquisition Total consideration, net of cash $ 207.4 Plus: Cash acquired in acquisition 2.7 Less: Working capital adjustment (1.3) Total consideration 208.8 Less: non-cash contingent consideration — Net assets acquired $ 208.8 The R&B Acquisition included a contingent consideration arrangement of up to $3.0 million that was payable to the R&B sellers, if certain R&B employees failed to complete a post-acquisition one-year service period. The range of the undiscounted amounts payable by the Company under the contingent consideration agreement was between zero and $3.0 million. The fair value of the contingent consideration recognized on the acquisition date of zero was determined based on the expectation that all former R&B employees would be retained during the one-year retention period (a level 3 fair value measurement based on unobservable inputs). In connection with the R&B Acquisition, the Company purchased all of the outstanding shares of R&B, a corporate entity, and assumed R&B’s tax basis in their assets and liabilities. This resulted in the recognition of $31.2 million in deferred tax liabilities as part of the purchase price allocation, as further described in Note 7. In the R&B Acquisition, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce and anticipated long-term growth in new markets, customers and products. Pro Forma Financial Information The following pro forma information presents a summary of the results of operations for the periods indicated as if the R&B Acquisition and associated senior notes issuance had been completed as of February 4, 2019. The pro forma financial information is based on the historical financial information for the Company and R&B, along with certain pro forma adjustments. These pro forma adjustments consist primarily of: • Increased amortization expense related to the intangible assets acquired in the R&B Acquisition; • Increased interest expense to reflect the fixed rate notes entered into in connection with the R&B Acquisition including interest and amortization of deferred financing costs; • Reclassification of direct acquisition transaction costs, retention bonuses and inventory fair value adjustments from the period incurred to periods these expenses would have been recognized given the assumed transaction dates identified above; and • The related income tax effects of the aforementioned adjustments and legal entity restructuring performed to effect the R&B Acquisition. The following pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations as they would have been had the R&B Acquisition occurred on the assumed dates, nor is it necessarily an indication of future operating results. In addition, the pro forma information does not reflect the cost of any integration activities, benefits from any synergies that may be derived from the R&B Acquisition or revenue growth that may be anticipated. Six Months Ended August 2, 2020 Net sales $ 1,817.0 Net income $ 10.1 As a result of integration of the R&B Acquisition, including the consolidation of certain acquired and existing branches, it is impracticable to identify the explicit financial performance associated with the R&B Acquisition. As such, the Company has not presented the post-acquisition net sales and net income for the R&B Acquisition. Intangible Assets For the R&B Acquisition discussed above, the Company valued intangible assets acquired, which included customer relationships, non-compete agreements, and/or trademarks. The customer relationship intangible assets represent the value associated with those customer relationships in place at the date of the R&B Acquisition. The Company valued the customer relationships using an excess earnings method using various inputs such as customer attrition rate, revenue growth rate, gross margin percentage and discount rate. Cash flows associated with the existing relationships are expected to diminish over time due to customer turnover. The Company reflected this expected diminishing cash flow through the utilization of an annual customer attrition rate assumption and in its method of amortization. The non-compete intangible asset represents the value associated with a non-compete agreement for a former executive in place at the date of the R&B Acquisition. The trademark intangible asset represents the value associated with the brand name in place at the date of the R&B Acquisition. A summary of the intangible assets acquired and assumptions utilized in the valuation for the R&B Acquisition is as follows: Intangible Asset Amount Amortization Period Discount Rate Attrition Rate R&B Acquisition Customer relationships $ 113.7 15 years 10.0 % 7.5 % Non-compete agreement 0.4 5 years 10.0 % N/A Trademark 0.4 1 year 10.0 % N/A Acquisition-Related Costs Acquisition-related costs, which are included within selling, general and administrative expenses, for the R&B Acquisition were as follows: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 R&B Acquisition $ — $ 0.2 $ — $ 1.4 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Aug. 01, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill The carrying amount of the Company's goodwill included in the Balance Sheets is as follows: August 1, 2021 January 31, 2021 Gross Goodwill $ 1,452.5 $ 1,452.7 Accumulated Impairment — — Net Goodwill $ 1,452.5 $ 1,452.7 The changes in the carrying amount of goodwill are as follows: Six Months Ended August 1, 2021 Beginning Balance $ 1,452.7 Goodwill acquired during the year — Goodwill adjusted during the year (0.2) Ending balance $ 1,452.5 Adjustments to goodwill during the three and six months ended August 1, 2021 were related to the R&B Acquisition, as further described in Note 4. Goodwill represents the excess of purchase price over the fair value of net assets acquired. The Company does not amortize goodwill, but does assess the recoverability of goodwill on an annual basis during the fourth quarter. If an event occurs or circumstances change that would "more likely than not" reduce the fair value of a reporting unit below its carrying value, an interim impairment test would be performed between annual tests. Intangible Assets The Company's intangible assets included in the Balance Sheets consist of the following: August 1, 2021 January 31, 2021 Gross Intangible Accumulated Amortization Net Intangible Gross Intangible Accumulated Amortization Net Intangible Customer relationships $ 1,277.1 $ 416.3 $ 860.8 $ 1,276.8 $ 358.8 $ 918.0 Other intangible assets 2.6 1.7 0.9 2.6 1.4 1.2 Total $ 1,279.7 $ 418.0 $ 861.7 $ 1,279.4 $ 360.2 $ 919.2 Amortization expense related to intangible assets was as follows: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Amortization expense $ 28.8 $ 29.6 $ 57.8 $ 58.2 The estimated aggregate amortization expense on intangible assets owned by the Company for the remainder of fiscal 2021 and the next four full fiscal years is expected to be as follows: Fiscal 2021 $ 57.0 Fiscal 2022 107.1 Fiscal 2023 98.9 Fiscal 2024 91.3 Fiscal 2025 85.6 |
Debt
Debt | 6 Months Ended |
Aug. 01, 2021 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Debt consisted of the following: August 1, 2021 January 31, 2021 Principal Unamortized Discount and Debt Issuance Costs Principal Unamortized Discount and Debt Issuance Costs Current maturities of long-term debt: Senior Term Loan due August 2024 $ — $ — $ 13.0 $ — Senior Term Loan due July 2028 15.0 — — — Long-term debt: Senior Term Loan due August 2024 — — 1,248.0 19.1 Senior Notes due September 2024 — — 300.0 8.9 Senior Notes due August 2025 — — 750.0 14.8 ABL Credit Facility due July 2026 — — — 3.5 Senior Term Loan due July 2028 1,485.0 23.0 — — 1,485.0 23.0 2,298.0 46.3 Total $ 1,500.0 $ 23.0 $ 2,311.0 $ 46.3 Debt Transactions On July 27, 2021, Core & Main LP: (i) amended the terms of the credit agreement governing the senior term loan facility in an aggregate principal amount of $1,300.0 million maturing on August 1, 2024 issued by Core & Main LP (the “Senior Term Loan”) in order to, among other things, enter into a new $1,500.0 million seven-year senior term loan (the “New Senior Term Loan”) and (ii) amended the terms of the credit agreement governing the senior asset-based revolving credit facility in order to, among other things, increase the aggregate amount of commitments by $150.0 million to $850.0 million overall and extend the maturity date from July 2024 to July 2026 (as amended, the “ABL Credit Facility”). Core & Main LP and Holdings utilized the net proceeds from the IPO Transaction, together with the net proceeds from borrowings under the New Senior Term Loan and cash on hand, to redeem (i) all $300.0 million aggregate principal amount of the senior unsecured notes due September 15, 2024 issued by Holdings (the “Senior 2024 Notes”) then outstanding at a redemption price equal to 102.000% of the aggregate principal amount thereof and (ii) all $750.0 million aggregate principal amount of the senior unsecured notes due August 15, 2025 issued by Core & Main LP (the “Senior 2025 Notes”) then outstanding at a redemption price equal to 101.531% of the aggregate principal amount thereof, plus, in each case, accrued and unpaid interest, by satisfying and discharging the indenture governing the Senior 2025 Notes at the closing of the IPO and redeeming the Senior 2025 Notes on August 15, 2021. Additionally, Core & Main LP repaid $1,257.8 million outstanding under the Senior Term Loan, plus accrued and unpaid interest, and settled the interest rate swap associated with the Senior Term Loan (collectively, the “Refinancing Transactions”). The Company recorded a loss on debt modification and extinguishment of $50.4 million for each of the three and six months ended August 1, 2021. The loss on debt modification and extinguishment included (i) the write off of $7.7 million in deferred financing fees associated with the redemption of the Senior 2024 Notes, (ii) the write off of $13.2 million in deferred financing fees associated with the redemption of the Senior 2025 Notes, (iii) the write off of $4.8 million in deferred financing fees associated with the settlement of the Senior Term Loan, (iv) redemption premiums of $6.0 million and $11.5 million for the Senior 2024 Notes and Senior 2025 Notes, respectively, (v) the settlement of the cash flow interest rate swap of $5.2 million which had its changes in fair value previously attributed to accumulated other comprehensive loss, and (vi) third-party expenses for the New Senior Term Loan of $2.0 million. The remaining debt obligations as of August 1, 2021 include the following debt agreements: New Senior Term Loan On July 27, 2021, Core & Main LP entered into the New Senior Term Loan that matures on July 27, 2028, with an aggregate principal amount of $1,500.0 million. The New Senior Term Loan requires quarterly principal payments, payable on the last business day of each fiscal quarter in an amount equal to approximately 0.25% of the original principal amount of the New Senior Term Loan. The first quarterly principal payment is due on October 29, 2021. The remaining balance is payable upon final maturity of the New Senior Term Loan on July 27, 2028. The New Senior Term Loan bears interest at a LIBOR rate plus an applicable margin of 2.50%. The weighted average interest rate, excluding the effect of an interest rate swap, of Core & Main LP's outstanding borrowings under the New Senior Term Loan as of August 1, 2021 was 2.59%. See further discussion of the interest rate swap below. Based on quotes from financial institutions (i.e., level 2 of the fair value hierarchy), the fair value of the New Senior Term Loan was $1,485.0 million at August 1, 2021. Asset-Based Credit Facility Core & Main LP has an asset-based revolving credit facility with a borrowing capacity of up to $850.0 million, subject to borrowing base availability, with a maturity date of July 27, 2026. Borrowings under the ABL Credit Facility bear interest at either a LIBOR rate plus an applicable margin ranging from 1.25% to 1.75%, or an alternate base rate plus an applicable margin ranging from 0.25% to 0.75%, depending on the borrowing capacity under the ABL Credit Facility. Additionally, Core & Main LP pays a fee of 0.25% on unfunded commitments under the ABL Credit Facility. The book value of the ABL Credit Facility approximates fair value due to the variable interest rate nature of these borrowings; however there were no amounts outstanding as of August 1, 2021. The aforementioned debt agreements include customary affirmative and negative covenants, which include, among other things, restrictions on Core & Main LP's ability to pay dividends, create liens, incur additional indebtedness, make investments, dispose of assets and merge or consolidate with any other person. The New Senior Term Loan may require accelerated repayment based upon cash flows generated in excess of operating and investing requirements when the Consolidated Secured Leverage Ratio (as defined in the agreement governing the New Senior Term Loan) is greater than or equal to 3.25. In addition, the ABL Credit Facility requires Core & Main LP to comply with a consolidated fixed charge coverage ratio of greater than or equal to 1.00 when availability under the ABL Credit Facility is less than 10.0% of the lesser of (i) the then applicable borrowing base or (ii) the then aggregate effective commitments. Substantially all of Core & Main LP's assets are pledged as collateral for the New Senior Term Loan and the ABL Credit Facility. The aggregate amount of debt payments for the remainder of fiscal 2021 and the next four full fiscal years are as follows: Fiscal 2021 $ 7.5 Fiscal 2022 15.0 Fiscal 2023 15.0 Fiscal 2024 15.0 Fiscal 2025 15.0 Interest Rate Swaps On February 28, 2018, Core & Main LP entered into an instrument pursuant to which it made payments to a third party based upon a fixed interest rate of 2.725% and received payments based upon the three-month LIBOR rate, based on a $500.0 million notional amount, which mirrored then outstanding borrowings under the Senior Term Loan. On July 27, 2021, Core & Main LP repaid the approximately $1,257.8 million outstanding under the Senior Term Loan and settled the interest rate swap. As of July 27, 2021, the remaining interest rate swap liability of $5.2 million was repaid as part of this settlement, and the associated accumulated other comprehensive loss was reclassified to the loss on debt modification and extinguishment as the interest rate swap interest payments will no longer occur. Three Months Ended Six Months Ended Accumulated Other Comprehensive Loss August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Beginning of period balance $ (6.0) $ (13.4) $ (7.9) $ (11.0) Measurement adjustment (losses) for interest rate swap — (0.1) — (4.2) Reclassification of expense to interest expense 7.1 2.0 9.3 3.3 Tax (expense) benefit on interest rate swap adjustments Measurement adjustment (losses) for interest rate swap — — — 0.6 Reclassification of expense to interest expense (1.1) (0.3) (1.4) (0.5) End of period balance $ — $ (11.8) $ — $ (11.8) On July 27, 2021, Core & Main LP entered into an instrument in which it makes payments to a third-party based upon a fixed interest rate of 0.74% and receives payments based upon the one-month LIBOR rate, based on notional amounts associated with borrowings under the New Senior Term Loan. The measurement period of the interest rate swap commenced on July 27, 2021 with a notional amount of $1,000.0 million. The notional amount decreases to $900.0 million on July 27, 2023, $800.0 million on July 27, 2024, and $700.0 million on July 27, 2025 through the instrument maturity on July 27, 2026. This instrument is intended to reduce the Company's exposure to variable interest rates under the New Senior Term Loan. As of August 1, 2021, this resulted in an effective fixed rate of 3.24%, based upon the 0.74% fixed rate plus an applicable margin of 2.50%, on $1,000.0 million of borrowings under the New Senior Term Loan. The fair value of this cash flow interest rate swap was a $1.5 million liability as of August 1, 2021, which is included within other liabilities in the Balance Sheet. Fair value is based upon the present value of future cash flows under the terms of the contract and observable market inputs (level 2). Significant inputs used in determining fair value include forward-looking one-month LIBOR rates and the discount rate applied to projected cash flows Three Months Ended Six Months Ended Accumulated Other Comprehensive Loss August 1, 2021 August 1, 2021 Beginning of period balance $ — $ — Measurement adjustment (losses) for interest rate swap (1.5) (1.5) Reclassification of expense to interest expense — — Tax benefit on interest rate swap adjustments Measurement adjustment (losses) for interest rate swap 0.2 0.2 Reclassification of expense to interest expense — — End of period balance $ (1.3) $ (1.3) |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 01, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES As a result of the Reorganization Transactions, Core & Main became the general partner of Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Holdings is not generally subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Holdings is passed through to and included in the taxable income or loss of its partners, including Core & Main, following the Reorganization Transactions. Core & Main is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income of Holdings following the Reorganization Transactions. As the Reorganization Transactions are accounted for as transactions between entities under common control, the financial statements for the periods prior to the Reorganization Transactions reflect the combination of previously separate entities for presentation purposes. These entities include Core & Main, Holdings and its consolidated subsidiaries and the Blocker Companies. The Blocker Companies were holding companies with indirect investments in Holdings. They had no operations but did receive distributions from Holdings for their tax obligations as a corporation based on the taxable income allocated to them from Holdings. The condensed consolidated financial statements for periods prior to the Reorganization Transactions reflect the provision for income taxes and related balances on the Balance Sheet for the Blocker Companies. For the three months ended August 1, 2021 and August 2, 2020, the Company's effective tax rate was 24.6% and 26.1%, respectively. For the six months ended August 1, 2021 and August 2, 2020, the Company's effective tax rate was 20.1% and 25.5%, respectively. The variations between the Company's estimated effective tax rate and the U.S. statutory rate are primarily due to the portion of the Company's earnings (or loss) attributable to non-controlling interests following the Reorganization Transactions partially offset by certain permanent book-tax differences. The Company's operations have resulted in income, and as such, the Company maintains no valuation allowance against its deferred tax assets, including tax attributes recognized in connection with the Reorganization Transactions as described below. Tax Receivable Agreements and Reorganization Transactions As discussed in Note 1, the Company entered into the Tax Receivable Agreements with the Former Limited Partners and the Continuing Limited Partners. Under these agreements, the Company expects to generate tax attributes that will reduce amounts that it would otherwise pay in the future to various tax authorities. The Tax Receivable Agreements provide for the payment to either the Former Limited Partners or Continuing Limited Partners, or their permitted transferees, of 85% of the tax benefits realized by the Company. In connection with the Reorganization Transactions, the Former Limited Partners exchanged Partnership Interests for shares of Class A common stock of Core & Main. As a result of this exchange, the Company acquired certain tax attributes held by the Former Limited Partners. The Company expects that these tax attributes will reduce future payments to taxing authorities. As such, the Company recorded a payable associated with the Former Limited Partners Tax Receivable Agreement that represents their 85% share of these anticipated tax savings. As of August 1, 2021, the Company had recorded an $88.6 million payable to related parties pursuant to the Former Limited Partners Tax Receivable Agreement. The Company also entered into the Continuing Limited Partners Tax Receivable Agreement that provides for payment to the Continuing Limited Partners of 85% of the amount of tax savings, if any, that Core & Main realizes, or is deemed to realize, as a result of redemptions or exchanges of Partnership Interests pursuant to the Exchange Agreement. As of August 1, 2021, no Continuing Limited Partners have exchanged Partnership Interests and shares of Class B common stock for shares of Class A common stock; as such, the Company has not recorded a liability under the Continuing Limited Partners Tax Receivable Agreement. The actual amount and timing of any payments under the Tax Receivable Agreements will vary depending upon a number of factors, including the timing of exchanges by the holders of Partnership Interests, the amount of gain recognized by such holders of Partnership Interests, the amount and timing of the taxable income the Company generates in the future and the federal tax rates then applicable. Assuming (i) that the Continuing Limited Partners exchanged all of their Partnership Interests at $26.50 per share of our Class A common stock (the closing stock price on July 30, 2021), (ii) no material changes in relevant tax law, (iii) a constant corporate tax rate of 25.1%, which represents a pro forma tax rate that includes a provision for U.S. federal income taxes and assumes the highest statutory rate apportioned to each state and local jurisdiction and (iv) that the Company earns sufficient taxable income in each year to realize on a current basis all tax benefits that are subject to the Continuing Limited Partners Tax Receivable Agreement, the Company would recognize a deferred tax asset (subject to offset with existing deferred tax liabilities) of approximately $827.3 million and a Continuing Limited Partners Tax Receivable Agreement liability of approximately $703.2 million, payable to the Continuing Limited Partners over the life of the Continuing Limited Partners Tax Receivable Agreement. The full exchange by the Continuing Limited Partners will also increase Core & Main's deferred tax liability associated with its investment in Holdings by $84.5 million. The foregoing amounts are estimates only and are subject to change. Reorganization Transactions and IPO Transaction Deferred Tax Liability Prior to the Reorganization Transactions, the Blocker Companies were holding corporations for indirect investments in Holdings. The Blocker Companies had no operations but did receive distributions from Holdings associated with their tax obligations from allocations of Holdings taxable income. As such, the Blocker Companies' financial statements reflected a deferred tax liability associated with the difference between their financial reporting investment and tax basis in Holdings. In connection with the Blocker Mergers, Core & Main assumed the balance sheets of the Blocker Companies. The assumed deferred tax liability was adjusted to reflect the IPO Transaction and as of August 1, 2021, the Company had a $58.8 million deferred tax liability associated with the difference between Core & Main's financial reporting basis and the tax basis of Core & Main’s investment in Holdings. R&B Acquisition Deferred Tax Liability On March 11, 2020, the Company completed the acquisition of all of the outstanding shares of R&B, a corporation for income tax purposes. The acquisition was completed through Core & Main Buyer, Inc. (“Buyer”), a wholly-owned subsidiary of the Company. Buyer subsequently contributed R&B to Core & Main LP, and then R&B was merged with Core & Main LP. The Company assumed R&B’s tax basis in its assets and liabilities, resulting in the recognition of $31.2 million of deferred tax liabilities, primarily associated with intangible assets, as part of the opening balance sheet. The taxable income that is allocated to Buyer is subject to corporate federal and state income tax in substantially all fifty states. As of August 1, 2021 this deferred tax liability was $30.8 million. Total gross unrecognized tax benefits as of August 1, 2021 and August 2, 2020, as well as activity within each of the years, were not material. |
Leases
Leases | 6 Months Ended |
Aug. 01, 2021 | |
Leases [Abstract] | |
Leases | LEASES The Company occupies certain facilities and operates certain equipment and vehicles under operating leases that expire at various dates through the year 2036. Disclosures The table below presents lease costs associated with facility and vehicle operating leases: Three Months Ended Six Months Ended Lease Cost Classification August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Operating Lease Cost Selling, general, and administrative expense $ 14.1 $ 13.2 $ 27.9 $ 26.1 Future aggregate rental payments under non-cancelable operating leases for the remainder of fiscal 2021 and the next four full fiscal years as of August 1, 2021 are as follows: August 1, 2021 Fiscal 2021 $ 27.8 Fiscal 2022 44.1 Fiscal 2023 34.9 Fiscal 2024 24.6 Fiscal 2025 15.7 Thereafter 19.5 Total minimum lease payments 166.6 Less: present value discount (22.4) Present value of lease liabilities $ 144.2 To calculate the present value of the operating lease liabilities, the Company determined its incremental borrowing rate by considering market and company specific factors, including interest rates for borrowings secured by collateral and adjusted for the remaining term of the leased facility, machinery, or vehicle categories. The table below presents the weighted average remaining lease term (years) and the weighted average discount rate of the Company's operating leases: Operating Lease Term and Discount Rate August 1, 2021 Weighted average remaining lease term (years) 2.8 Weighted average discount rate 4.2 % The table below presents cash and non-cash impacts associated with leases: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from operating leases $ 14.1 $ 13.2 $ 27.9 $ 26.0 Right-of-use assets obtained in exchange for new lease liabilities Operating leases $ 12.0 $ 5.5 $ 37.0 $ 18.9 The non-cash impact related to right-of-use assets obtained in exchange for new operating lease liabilities in the table above excludes the impact from acquisitions. Right-of-use assets acquired as part of the R&B Acquisition are presented in Note 4. |
Commitment and Contingencies
Commitment and Contingencies | 6 Months Ended |
Aug. 01, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Matters The Company is involved in various legal proceedings arising in the normal course of its business. The Company establishes reserves for litigation and similar matters when those matters present loss contingencies that it determines to be both probable and reasonably estimable. In the opinion of management, based on current knowledge, all probable and reasonably estimable matters are believed to be adequately reserved for or covered by insurance and are not expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows. For all other matters, management believes the possibility of losses from such matters is not probable, the potential loss from such matters is not reasonably estimable, or such matters are of such kind or involve such amounts that would not have a material adverse effect on the financial position, results of operations or cash flows of the Company if resolved unfavorably. Self-Insurance The Company has high deductible insurance programs for most losses related to general liability, product liability, automobile liability and workers’ compensation, and is self-insured for medical claims, while maintaining per employee stop loss coverage, and certain legal claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability in the accompanying Balance Sheets. The Company’s self-insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. At August 1, 2021 and January 31, 2021, the Company's self-insurance liabilities totaled $24.7 million and $23.5 million, respectively. Continuing Limited Partners Tax Receivable Agreement Core & Main is party to the Continuing Limited Partners Tax Receivable Agreement, which will result in the recognition of deferred tax benefits and liabilities upon the exchange of Partnership Interests and shares of Class B common stock by the Continuing Limited Partners for shares of Class A common stock of Core & Main or cash pursuant to the Exchange Agreement. See further discussion in Notes 1 and 7. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 6 Months Ended |
Aug. 01, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Information | SUPPLEMENTAL BALANCE SHEET INFORMATION Receivables Receivables consisted of the following: August 1, 2021 January 31, 2021 Trade receivables, net of allowance for credit losses $ 770.5 $ 494.9 Vendor rebate receivables 62.4 61.9 Receivables, net of allowance for credit losses $ 832.9 $ 556.8 Property, Plant and Equipment Property, plant and equipment consisted of the following: August 1, 2021 January 31, 2021 Land $ 23.4 $ 23.1 Buildings and improvements 31.9 31.5 Transportation equipment 26.8 27.2 Furniture, fixtures and equipment 62.6 60.0 Capitalized software 14.3 13.1 Construction in progress 4.6 3.1 Property, plant and equipment 163.6 158.0 Less accumulated depreciation and amortization (81.4) (71.8) Property, plant and equipment, net $ 82.2 $ 86.2 Depreciation expense is classified within cost of sales and depreciation and amortization. Depreciation expense related to property, plant and equipment, including capitalized software, was as follows: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Depreciation expense $ 5.6 $ 5.9 $ 11.3 $ 11.6 Accrued Compensation and Benefits Accrued compensation and benefits consisted of the following: August 1, 2021 January 31, 2021 Accrued bonuses and commissions $ 48.2 $ 50.5 Other compensation and benefits 19.8 20.2 Accrued compensation and benefits $ 68.0 $ 70.7 Other Current Liabilities Other current liabilities consisted of the following: August 1, 2021 January 31, 2021 Accrued interest $ 0.7 $ 34.5 Accrued non-income taxes 22.7 13.6 Other 28.1 22.0 Other current liabilities $ 51.5 $ 70.1 Other Liabilities Other liabilities consisted of the following: August 1, 2021 January 31, 2021 Self-insurance reserves $ 15.8 $ 15.2 Other 7.5 15.8 Other liabilities $ 23.3 $ 31.0 |
Non-controlling Interests
Non-controlling Interests | 6 Months Ended |
Aug. 01, 2021 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | NON-CONTROLLING INTERESTS Core & Main is the general partner of Holdings and operates and controls all of the business and affairs of Holdings and, through Holdings and its subsidiaries, conducts the Company's business. Accordingly, Core & Main consolidates the consolidated financial statements of Holdings and attributes a portion of net income and equity of Holdings to non-controlling interests related to the vested Partnership Interests held by the Continuing Limited Partners. Income or loss is attributed to the non-controlling interests based on the weighted average percentage of Partnership Interests held by Continuing Limited Partners, excluding unvested Partnership Interests held by Management Feeder, relative to all Partnership Interests of Holdings during the period following the Reorganization Transactions. Holdings equity is attributed to non-controlling interests based on the Partnership Interests held by Continuing Limited Partners, excluding unvested Partnership Interests held by Management Feeder, relative to all Partnership Interests as of the balance sheet date. The non-controlling interests’ ownership percentage may fluctuate over time as the Continuing Limited Partners exchange Partnership Interests and shares of Class B common stock for shares of Class A common stock and Partnership Interests held by Management Feeder vest. The following table summarizes the ownership of Partnership Interests of Holdings as of August 1, 2021 (excluding unvested Partnership Interests held by Management Feeder): Partnership Interests Ownership Percentage Core & Main ownership of Partnership Interests 154,834,603 65.18 % Partnership Interests held by the Continuing Limited Partners 82,724,349 34.82 % Balance at end of period 237,558,952 100.0 % |
Basic and Diluted Loss Per Shar
Basic and Diluted Loss Per Share | 6 Months Ended |
Aug. 01, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss Per Share | BASIC AND DILUTED LOSS PER SHARE The following table presents the calculation of basic and diluted loss per share for July 23, 2021 to August 1, 2021, the period following the Reorganization Transactions. Basic loss per share is computed by dividing net loss attributable to Core & Main for the period following the Reorganization Transactions by the weighted average number of shares of Class A common stock outstanding during the same period. Shares of Class A common stock issued during the period, including shares of Class A common stock issued in the IPO Transaction, were weighted for the portion of the period in which the shares of Class A common stock were outstanding. The Company did not apply the two-class method because shares of Class B common stock do not participate in earnings or losses of Core & Main. As a result, the shares of Class B common stock are not considered participating securities and are not included in the weighted average shares outstanding for purposes of loss per share. Losses allocated to holders of non-controlling interests were excluded from losses available to the Class A common stock. There were no preferred dividends and no shares of preferred stock outstanding for the period. The diluted net loss per share calculation includes the basic weighted average number of shares of Class A common stock outstanding plus the dilutive impact of potential outstanding shares of Class A common stock that would be issued upon exchange of Partnership Interests and shares of Class B common stock, under the if-converted method, if dilutive. The treasury stock method is applied to outstanding awards, including unvested Partnership Interests and outstanding stock appreciation rights. The Company analyzed the calculation of net income per unit for periods prior to the Reorganization Transactions and determined that it resulted in values that would not be meaningful to the users of these unaudited condensed consolidated financial statements due to the effects of the Reorganization Transactions on July 22, 2021. Therefore, earnings per unit information has not been presented for the three and six months ended August 2, 2020. Basic loss per share: July 23, 2021 through August 1, 2021 Net loss $ (37.0) Net loss attributable to non-controlling interests (17.0) Net loss available to Class A common stock (20.0) Weighted average shares outstanding 138,978,366 Net loss per share $ (0.14) Diluted loss per share: Net loss available to common shareholders - diluted $ (20.0) Weighted average shares outstanding - diluted 138,978,366 Net loss per share - diluted $ (0.14) For the period from July 23, 2021 to August 1, 2021, 81,006,587 vested Partnership Interests, each weighted for the portion of the period for which they were outstanding, together with a corresponding number of shares of Class B common stock which were exchangeable for Class A common stock were not included in the computation of diluted loss per share because the effect would have been anti-dilutive. For the period from July 23, 2021 to August 1, 2021, 3,129,034 unvested Partnership Interests, each weighted for the portion of the period for which they were outstanding, together with a corresponding number of shares of Class B common stock which were exchangeable for Class A common stock were not included in the computation of diluted loss per share because the effect would have been anti-dilutive. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Aug. 01, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | EQUITY-BASED COMPENSATION Equity-Based Compensation Plan Prior to the IPO Transaction, the board of Holdings approved the Core & Main Holdings, LP Equity Incentive Plan. Employees and independent directors of the Company previously received profits units and unit appreciation rights in Holdings indirectly through Management Feeder. These awards were issued from Management Feeder, which in turn received grants from Holdings in the amounts and terms that were identical to those that were issued to employees and independent directors. Treatment of Profit Units in Reorganization Transaction In connection with the Reorganization Transactions, Holdings was recapitalized and its common units and profits units were converted to a single class of Partnership Interests. Partnership Interests in the recapitalized Holdings, which correspond to prior profits units of Holdings, which were held by Management Feeder (which relate to profits units in Management Feeder held by the Company's employees and directors), remain subject to the same time-based vesting requirements that existed prior to the Reorganization Transactions. As part of the recapitalization of Holdings, the quantity of Partnership Interests issued in the recapitalization contemplated the settlement of the historical benchmark prices and the public offering price of Class A common stock in the IPO Transaction. A summary of the Partnership Interests is presented below (shares in thousands): Number of Shares Weighted Average Benchmark Price Outstanding on January 31, 2021 6,322 $ 6.92 Granted 406 18.00 Forfeitures (15) 8.46 Repurchases (58) 8.46 Outstanding prior to Reorganization Transactions 6,655 7.58 Conversion 4,684 Outstanding following Reorganization Transactions 11,339 $ — Number of Shares Outstanding following Reorganization Transactions 11,339 Vested awards following the Reorganization Transactions (6,320) Non-vested following the Reorganization Transactions 5,019 Vested (1,890) Non-vested at August 1, 2021 3,129 Treatment of Unit Appreciation Rights in Reorganization Transactions In connection with the Reorganization Transactions, unit appreciation rights of Holdings were converted to stock appreciation rights denominated in shares of Class A common stock with adjustments to the number of awards and benchmark prices. A summary of the stock appreciation rights is presented below (shares in thousands): Number of Shares Weighted Average Benchmark Price Outstanding on January 31, 2021 200 $ 10.00 Granted 100 18.00 Outstanding prior to Reorganization Transactions 300 12.66 Conversion 334 Outstanding following Reorganization Transactions 634 $ 5.00 Number of Shares Weighted Average Benchmark Price Outstanding following the Reorganization Transactions 634 $ 5.00 Vested awards following the Reorganization Transactions (242) 3.24 Non-vested following the Reorganization Transactions 392 6.09 Vested (43) 3.24 Non-vested at August 1, 2021 349 $ 6.44 Omnibus Incentive Plan In July 2021, in connection with the IPO Transaction, Core & Main's sole stockholder approved and Core & Main’s board of directors adopted the 2021 Omnibus Equity Incentive Plan (the “Omnibus Incentive Plan”). Under the Omnibus Incentive Plan, 12,600,000 shares of Class A common stock, plus 633,683 shares of Class A common stock in respect of stock appreciation rights that were converted from unit appreciation rights of Holdings outstanding prior to the IPO Transaction, are reserved and available for future issuance. Compensation Expense The Company evaluated the conversions of the profits units and unit appreciation rights as part of the Reorganization Transactions and concluded that each represented an accounting modification of the original awards. As such, the Company is required to recognize the incremental fair value immediately after each modification compared with immediately before as additional compensation expense. Incremental compensation expense for awards that were vested as of the Reorganization Transactions were recognized immediately and expense for unvested awards will be recognized over the remaining service period. During the three and six months ended August 1, 2021, the Company recognized compensation expense of $18.5 million and $19.5 million, respectively, compared with $1.0 million and $2.0 million during the three and six months ended August 2, 2020, respectively. As of August 1, 2021, the unrecognized share based compensation was $14.1 million. |
Related Parties
Related Parties | 6 Months Ended |
Aug. 01, 2021 | |
Related Party Transactions [Abstract] | |
Related Parties | RELATED PARTIES CD&R affiliates During the three and six months ended August 1, 2021, the Company had $0.5 million and $1.1 million, respectively, in purchases of product from affiliates of Clayton, Dubilier & Rice, LLC (“CD&R”), including other companies invested in by funds affiliated with or managed by CD&R (the “CD&R Funds”). During the three and six months ended August 2, 2020, the Company had $0.1 million and $0.3 million, respectively, in purchases of product from affiliates of CD&R, including other companies invested in by the CD&R Funds. There were no amounts payable to affiliates of CD&R at August 1, 2021 and January 31, 2021. There were $0.1 million and $5.3 million in sales to affiliates of CD&R for the three and six months ended August 1, 2021, respectively, and no sales to affiliates of CD&R for the three and six months ended August 2, 2020. There were no amounts and $0.1 million receivable from affiliates of CD&R at August 1, 2021 and January 31, 2021, respectively. Tax Receivable Agreements In connection with the Reorganization Transactions, Core & Main entered into the Former Limited Partners Tax Receivable Agreement with the Former Limited Partners and the Continuing Limited Partners Tax Receivable Agreement with the Continuing Limited Partners. See further discussion in Notes 1 and 7. Master Reorganization Agreement In connection with the Reorganization Transactions, Core & Main entered into the Master Reorganization Agreement as further described in Note 1. Pursuant to the Master Reorganization Agreement, the Former Limited Partners received Partnership Interests in exchange for their indirect ownership interests in Holdings and exchanged these Partnership Interests for shares of Class A common stock of Core & Main prior to the consummation of the IPO Transaction. Exchange Agreement In connection with the Reorganization Transactions, Core & Main entered into the Exchange Agreement as further described in Note 1. Pursuant to the Exchange Agreement, the Continuing Limited Partners (or their permitted transferees) will have the right, subject to the terms of the Exchange Agreement, to exchange their Partnership Interests, together with the retirement of a corresponding number of shares of Class B common stock, for shares of Class A common stock on a one-for-one basis or for cash in limited circumstances as specified in the Exchange Agreement. Holders of Partnership Interests will not have the right to exchange Partnership Interests if Core & Main determines that such exchange would be prohibited by law or regulation or would violate other agreements with Core & Main or its subsidiaries to which the holder of Partnership Interests may be subject. Core & Main may also refuse to honor any request to effect an exchange if it determines such exchange would pose a material risk that Holdings would be treated as a “publicly traded partnership” for U.S. federal income tax purposes. Notwithstanding the foregoing, the Continuing Limited Partners are generally permitted to exchange Partnership Interests, subject to the terms of the Exchange Agreement. The Exchange Agreement also provides that, in connection with any such exchange, to the extent that Holdings has, since consummation of the Reorganization Transactions and the IPO Transaction, made distributions to the applicable Continuing Limited Partner that are proportionately lesser or greater than the distributions made to Core & Main, on a pro rata basis, the number of shares of Class A common stock to be issued or cash to be paid to such Continuing Limited Partner will be adjusted to take into account the amount of such discrepancy that is allocable to the Partnership Interests, and Class B common stock, subject to such exchange. Core & Main expects to cause Holdings to make distributions to its partners in such a manner as generally to limit increases to the number of shares of Class A common stock to be issued or cash to be paid to exchanging Continuing Limited Partners in connection with the adjustment described in the preceding sentence. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Aug. 01, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Management has evaluated events or transactions that may have occurred since August 1, 2021 that would merit recognition or disclosure in the condensed consolidated financial statements. Acquisitions On August 9, 2021, the Company completed the acquisition of all of the outstanding shares of Pacific Pipe Company, Inc. (“Pacific Pipe”) in a transaction valued up to $102.5 million, subject to working capital adjustments (the “Pacific Pipe Acquisition”). Given the recent closure of the Pacific Pipe Acquisition, the preliminary purchase price allocation is not available as of the date of the issuance of these unaudited condensed consolidated financial statements but is expected to primarily be ascribed to customer relationships, working capital, and fixed assets with the residual balance going to goodwill. On August 30, 2021, the Company completed the acquisition of certain assets and assumption of certain liabilities of L&M Bag & Supply Co., Inc. (“L&M”) in a transaction valued up to $60.0 million, subject to working capital adjustments (the “L&M Acquisition”). Given the recent closure of the L&M Acquisition, the preliminary purchase price allocation is not available as of the date of the issuance of these unaudited condensed consolidated financial statements but is expected to primarily be ascribed to customer relationships, working capital, and fixed assets with the residual balance going to goodwill. Exercise of Underwriters' Option |
Basis of Presentation & Descr_2
Basis of Presentation & Description of Business (Policies) | 6 Months Ended |
Aug. 01, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation - Consolidation | The accompanying unaudited condensed consolidated financial statements present the results of operations, financial position and cash flows of Core & Main and its subsidiaries, which includes the consolidated financial statements of Holdings and its consolidated subsidiary, Core & Main LP, as the legal entity that conducts the operations of the Company. Holdings is considered a variable interest entity. Core & Main is the primary beneficiary and general partner of Holdings and has decision making authority that significantly affects the economic performance of the entity. As a result, Core & Main consolidates the consolidated financial statements of Holdings. All intercompany balances and transactions have been eliminated in consolidation. The Company records non-controlling interests related to Partnership Interest held by the Continuing Limited Partners in Holdings. For the periods prior to the Reorganization Transactions, the condensed consolidated financial statements of the Company include the Blocker Companies, which were merged into Core & Main as part of the Blocker Mergers. |
Basis of Presentation - Accounting | In management’s opinion, the unaudited condensed consolidated financial information for the interim periods presented include all normal recurring adjustments necessary for a fair statement of the Company's results of operations, financial position and cash flows, which include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim unaudited condensed consolidated financial statements may not be the same as those for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Holdings audited consolidated financial statements and the related notes thereto as of and for the fiscal year ended January 31, 2021 included in the prospectus (File No. 333-256382), dated July 22, 2021, filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on July 26, 2021 (the “Prospectus”). |
Segments | Segments The Company’s chief operating decision maker (“CODM”) manages the business as a single operating and reportable segment. The Company operates more than 285 branch locations across the U.S. The nature of the products and services, vendors, customers and distribution methods are similar across branches. Accordingly, the CODM evaluates the performance of the business and makes management decisions on a consolidated basis. Performance is most notably measured based on Adjusted EBITDA at the consolidated level. The consolidated performance of the Company is utilized to determine incentive compensation for executive officers, annual merit decisions, management of national vendor relationships, allocation of resources and in evaluating acquisitions and the Company's capital structure. |
Fiscal Year | Fiscal Year The Company’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31 st . Quarters within the fiscal year include 13-week periods, unless a fiscal year includes a 53 rd |
Estimates | Estimates Management has made a number of estimates and assumptions relating to the reporting of certain assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing the elements of these financial statements in conformity with U.S. GAAP. Actual results could differ from these estimates. |
Income Taxes and Tax Receivable Agreements | Income Taxes As a result of the Reorganization Transactions, Core & Main became the general partner of Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Holdings is not generally subject to U.S. federal and certain state and local income taxes. Any taxable income or loss from Holdings is passed through to and included in the taxable income or loss of its partners, including Core & Main, following the Reorganization Transactions. Core & Main is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to Core & Main’s allocable share of any taxable income or loss of Holdings following the Reorganization Transactions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If it is determined that the Company is not able to realize deferred tax assets in the future a valuation allowance would be established, which would impact the provision for income taxes. Uncertain tax positions are recorded on the basis of a two-step process in which (1) it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records interest and penalties related to uncertain tax positions in the provision for income taxes in the unaudited Condensed Consolidated Statements of Operations. The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments. Tax Receivable Agreements In connection with the Reorganization Transactions and the IPO Transaction, Core & Main entered into a tax receivable agreement with the Former Limited Partners ("Former Limited Partners Tax Receivable Agreement") and a tax receivable agreement with the Continuing Limited Partners ("Continuing Limited Partners Tax Receivable Agreement") (collectively, the "Tax Receivable Agreements"). Under these agreements, Core & Main expects to generate tax attributes that will reduce amounts that it would otherwise pay in the future to various tax authorities. The Former Limited Partners Tax Receivable Agreement provides for the payment by Core & Main to certain Former Limited Partners, or their permitted transferees, of 85% of the tax benefits, if any, that Core & Main actually realizes, or in some circumstances is deemed to realize, as a result of (i) certain tax attributes of the Partnership Interests Core & Main holds in respect of such Former Limited Partners’ interest in Core & Main, including such attributes which resulted from such Former Limited Partners’ prior acquisition of ownership interests in Holdings and Core & Main's allocable share of existing tax basis acquired in connection with the IPO Transaction attributable to the Former Limited Partners and (ii) certain other tax benefits. |
Equity-Based Compensation | Equity-Based Compensation The Company recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant date fair value of those awards. That cost is recognized over the requisite service period (generally the vesting period), which is the period during which an employee is required to provide service in exchange for the award. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share Basic loss per share is computed by dividing net loss attributable to Core & Main for the period following the Reorganization Transactions by the weighted average number of shares of Class A common stock outstanding during the same period. Shares of Class A common stock issued during that period, including shares of Class A common stock issued in the IPO Transaction, were weighted for the portion of that period in which the shares of Class A common stock were outstanding. The Company did not apply the two-class method because shares of Class B common stock have voting rights but no economic rights to participate in earnings or losses of Core & Main. As a result, no earnings or loss per share of Class B common stock was presented. Losses allocated to holders of non-controlling interests were excluded from losses available to the Class A common stock. There were no preferred dividends and no shares of preferred stock outstanding for the period. |
Non-controlling Interests | Non-controlling Interests The non-controlling interests represent the Partnership Interests of Holdings held by the Continuing Limited Partners. Income or loss is attributed to the non-controlling interests based on the weighted average percentage of Partnership Interests held by Continuing Limited Partners, excluding unvested Partnership Interests held by Management Feeder, relative to all Partnership Interests of Holdings during the period following the Reorganization Transactions. The non-controlling interests’ ownership percentage may fluctuate over time as the Continuing Limited Partners exchange Partnership Interests and shares of Class B common stock for shares of Class A common stock and Partnership Interests held by Management Feeder vest. |
Recent Accounting Pronouncements | Cloud computing arrangements - In August 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). The new guidance aligns the requirements for capitalizing implementation costs in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. ASU 2018-15 is effective for annual periods beginning after December 15, 2019, and interim periods within these annual periods. The standard permits two approaches, one requiring prospective application to eligible costs incurred on or after the date this guidance is first applied and one requiring retrospective application. The Company adopted the provisions of ASU 2018-15 during the first quarter of the fiscal year ended January 31, 2021 (“fiscal 2020”) using the prospective method. The adoption of ASU 2018-15 did not have a material impact on the Company's financial position, results of operations or cash flows. The Company made no adjustments to its financial position upon adoption. Measurement of Credit Losses - In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). The new guidance introduces a new accounting model for recognizing expected credit losses upon the initial recognition of certain financial instruments, including accounts receivable, based on historical information, current information, and forecasted future events. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within these annual periods. The Company adopted the provisions of ASU 2016-13 during the first quarter of fiscal 2020, using the modified retrospective approach. The adoption of ASU 2016-13 did not result in a material impact to the Company's financial position, results of operations or cash flows upon adoption. Accounting for Income Taxes - In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside tax basis. The transition requirements are dependent upon each amendment within ASU 2019-12 and will be applied either prospectively or retrospectively. The Company adopted the provisions of ASU 2019-12, during the second quarter of fiscal 2021. The adoption of ASU 2019-12 did not result in a material impact to the Company's financial position, results of operations or cash flows upon adoption. Not Yet Adopted Reference Rate Reform - In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by ASU 2020-04 are effective for prospective contract modifications made and qualifying hedging relationships entered into as of March 12, 2020 through December 31, 2022. As discussed in Note 6, the debt modification performed by the Company on July 27, 2021 did not qualify under the guidance of ASU 2020-04 as the debt and interest rate swap instruments continue to reference LIBOR. At the time of a qualifying transaction and/or modification of debt and interest rate swap instruments to replace LIBOR with a new interest rate index, the Company will consider the application of ASU 2020-04. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of net sales disaggregated by product category | The following table represents net sales disaggregated by product category: Three Months Ended Six Months Ended Product Category August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Pipes, valves & fittings products $ 887.8 $ 621.7 $ 1,592.8 $ 1,160.3 Storm drainage products 172.8 142.6 302.5 246.6 Fire protection products 137.9 101.0 256.6 209.2 Meter products 99.1 90.6 200.8 181.9 Total Net Sales $ 1,297.6 $ 955.9 $ 2,352.7 $ 1,798.0 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of allocation of transaction price to the fair value of identifiable assets acquired and liabilities assumed | The following represents the final allocation of the transaction price to the fair value of identifiable assets acquired and liabilities assumed in the R&B Acquisition. R&B Acquisition Cash $ 2.7 Accounts receivable 25.0 Inventories 19.8 Intangible assets 114.5 Goodwill 88.4 Operating lease right-of-use assets 9.5 Other assets, current and non-current 10.7 Total assets acquired 270.6 Accounts payable 17.5 Deferred income taxes 31.2 Operating lease liabilities 9.5 Other liabilities, current and non-current 3.6 Net assets acquired $ 208.8 |
Schedule of reconciliation of total consideration to net assets acquired | The following reconciles the total consideration to net assets acquired: R&B Acquisition Total consideration, net of cash $ 207.4 Plus: Cash acquired in acquisition 2.7 Less: Working capital adjustment (1.3) Total consideration 208.8 Less: non-cash contingent consideration — Net assets acquired $ 208.8 |
Schedule of pro forma information | The following pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations as they would have been had the R&B Acquisition occurred on the assumed dates, nor is it necessarily an indication of future operating results. In addition, the pro forma information does not reflect the cost of any integration activities, benefits from any synergies that may be derived from the R&B Acquisition or revenue growth that may be anticipated. Six Months Ended August 2, 2020 Net sales $ 1,817.0 Net income $ 10.1 |
Schedule of intangible assets acquired and assumptions utilized in the valuation | A summary of the intangible assets acquired and assumptions utilized in the valuation for the R&B Acquisition is as follows: Intangible Asset Amount Amortization Period Discount Rate Attrition Rate R&B Acquisition Customer relationships $ 113.7 15 years 10.0 % 7.5 % Non-compete agreement 0.4 5 years 10.0 % N/A Trademark 0.4 1 year 10.0 % N/A |
Schedule of acquisition related costs | Acquisition-related costs, which are included within selling, general and administrative expenses, for the R&B Acquisition were as follows: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 R&B Acquisition $ — $ 0.2 $ — $ 1.4 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The carrying amount of the Company's goodwill included in the Balance Sheets is as follows: August 1, 2021 January 31, 2021 Gross Goodwill $ 1,452.5 $ 1,452.7 Accumulated Impairment — — Net Goodwill $ 1,452.5 $ 1,452.7 The changes in the carrying amount of goodwill are as follows: Six Months Ended August 1, 2021 Beginning Balance $ 1,452.7 Goodwill acquired during the year — Goodwill adjusted during the year (0.2) Ending balance $ 1,452.5 |
Schedule of net intangible assets | The Company's intangible assets included in the Balance Sheets consist of the following: August 1, 2021 January 31, 2021 Gross Intangible Accumulated Amortization Net Intangible Gross Intangible Accumulated Amortization Net Intangible Customer relationships $ 1,277.1 $ 416.3 $ 860.8 $ 1,276.8 $ 358.8 $ 918.0 Other intangible assets 2.6 1.7 0.9 2.6 1.4 1.2 Total $ 1,279.7 $ 418.0 $ 861.7 $ 1,279.4 $ 360.2 $ 919.2 |
Schedule of amortization expense related to intangible assets | Amortization expense related to intangible assets was as follows: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Amortization expense $ 28.8 $ 29.6 $ 57.8 $ 58.2 |
Schedule of estimated aggregate amortization expense on intangible assets | The estimated aggregate amortization expense on intangible assets owned by the Company for the remainder of fiscal 2021 and the next four full fiscal years is expected to be as follows: Fiscal 2021 $ 57.0 Fiscal 2022 107.1 Fiscal 2023 98.9 Fiscal 2024 91.3 Fiscal 2025 85.6 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Debt consisted of the following: August 1, 2021 January 31, 2021 Principal Unamortized Discount and Debt Issuance Costs Principal Unamortized Discount and Debt Issuance Costs Current maturities of long-term debt: Senior Term Loan due August 2024 $ — $ — $ 13.0 $ — Senior Term Loan due July 2028 15.0 — — — Long-term debt: Senior Term Loan due August 2024 — — 1,248.0 19.1 Senior Notes due September 2024 — — 300.0 8.9 Senior Notes due August 2025 — — 750.0 14.8 ABL Credit Facility due July 2026 — — — 3.5 Senior Term Loan due July 2028 1,485.0 23.0 — — 1,485.0 23.0 2,298.0 46.3 Total $ 1,500.0 $ 23.0 $ 2,311.0 $ 46.3 |
Schedule of aggregate future debt payments | The aggregate amount of debt payments for the remainder of fiscal 2021 and the next four full fiscal years are as follows: Fiscal 2021 $ 7.5 Fiscal 2022 15.0 Fiscal 2023 15.0 Fiscal 2024 15.0 Fiscal 2025 15.0 |
Schedule of interest rate swap impact on accumulated other comprehensive loss | Three Months Ended Six Months Ended Accumulated Other Comprehensive Loss August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Beginning of period balance $ (6.0) $ (13.4) $ (7.9) $ (11.0) Measurement adjustment (losses) for interest rate swap — (0.1) — (4.2) Reclassification of expense to interest expense 7.1 2.0 9.3 3.3 Tax (expense) benefit on interest rate swap adjustments Measurement adjustment (losses) for interest rate swap — — — 0.6 Reclassification of expense to interest expense (1.1) (0.3) (1.4) (0.5) End of period balance $ — $ (11.8) $ — $ (11.8) Three Months Ended Six Months Ended Accumulated Other Comprehensive Loss August 1, 2021 August 1, 2021 Beginning of period balance $ — $ — Measurement adjustment (losses) for interest rate swap (1.5) (1.5) Reclassification of expense to interest expense — — Tax benefit on interest rate swap adjustments Measurement adjustment (losses) for interest rate swap 0.2 0.2 Reclassification of expense to interest expense — — End of period balance $ (1.3) $ (1.3) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Leases [Abstract] | |
Schedule of lease costs, operating lease term and discount rate, and cash and non-cash impacts associated with leases | The table below presents lease costs associated with facility and vehicle operating leases: Three Months Ended Six Months Ended Lease Cost Classification August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Operating Lease Cost Selling, general, and administrative expense $ 14.1 $ 13.2 $ 27.9 $ 26.1 Operating Lease Term and Discount Rate August 1, 2021 Weighted average remaining lease term (years) 2.8 Weighted average discount rate 4.2 % The table below presents cash and non-cash impacts associated with leases: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from operating leases $ 14.1 $ 13.2 $ 27.9 $ 26.0 Right-of-use assets obtained in exchange for new lease liabilities Operating leases $ 12.0 $ 5.5 $ 37.0 $ 18.9 |
Schedule of future aggregate rental payments under non-cancelable operating leases | Future aggregate rental payments under non-cancelable operating leases for the remainder of fiscal 2021 and the next four full fiscal years as of August 1, 2021 are as follows: August 1, 2021 Fiscal 2021 $ 27.8 Fiscal 2022 44.1 Fiscal 2023 34.9 Fiscal 2024 24.6 Fiscal 2025 15.7 Thereafter 19.5 Total minimum lease payments 166.6 Less: present value discount (22.4) Present value of lease liabilities $ 144.2 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of receivables | Receivables consisted of the following: August 1, 2021 January 31, 2021 Trade receivables, net of allowance for credit losses $ 770.5 $ 494.9 Vendor rebate receivables 62.4 61.9 Receivables, net of allowance for credit losses $ 832.9 $ 556.8 |
Schedule of property, plant and equipment and related depreciation expense | Property, plant and equipment consisted of the following: August 1, 2021 January 31, 2021 Land $ 23.4 $ 23.1 Buildings and improvements 31.9 31.5 Transportation equipment 26.8 27.2 Furniture, fixtures and equipment 62.6 60.0 Capitalized software 14.3 13.1 Construction in progress 4.6 3.1 Property, plant and equipment 163.6 158.0 Less accumulated depreciation and amortization (81.4) (71.8) Property, plant and equipment, net $ 82.2 $ 86.2 Depreciation expense is classified within cost of sales and depreciation and amortization. Depreciation expense related to property, plant and equipment, including capitalized software, was as follows: Three Months Ended Six Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Depreciation expense $ 5.6 $ 5.9 $ 11.3 $ 11.6 |
Schedule of accrued compensation and benefits | Accrued compensation and benefits consisted of the following: August 1, 2021 January 31, 2021 Accrued bonuses and commissions $ 48.2 $ 50.5 Other compensation and benefits 19.8 20.2 Accrued compensation and benefits $ 68.0 $ 70.7 |
Schedule of other current liabilities | Other current liabilities consisted of the following: August 1, 2021 January 31, 2021 Accrued interest $ 0.7 $ 34.5 Accrued non-income taxes 22.7 13.6 Other 28.1 22.0 Other current liabilities $ 51.5 $ 70.1 |
Schedule of other liabilities | Other liabilities consisted of the following: August 1, 2021 January 31, 2021 Self-insurance reserves $ 15.8 $ 15.2 Other 7.5 15.8 Other liabilities $ 23.3 $ 31.0 |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Noncontrolling Interest [Abstract] | |
Schedule of ownership of Partnership Interests | The following table summarizes the ownership of Partnership Interests of Holdings as of August 1, 2021 (excluding unvested Partnership Interests held by Management Feeder): Partnership Interests Ownership Percentage Core & Main ownership of Partnership Interests 154,834,603 65.18 % Partnership Interests held by the Continuing Limited Partners 82,724,349 34.82 % Balance at end of period 237,558,952 100.0 % |
Basic and Diluted Loss Per Sh_2
Basic and Diluted Loss Per Share (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted loss per share | Basic loss per share: July 23, 2021 through August 1, 2021 Net loss $ (37.0) Net loss attributable to non-controlling interests (17.0) Net loss available to Class A common stock (20.0) Weighted average shares outstanding 138,978,366 Net loss per share $ (0.14) Diluted loss per share: Net loss available to common shareholders - diluted $ (20.0) Weighted average shares outstanding - diluted 138,978,366 Net loss per share - diluted $ (0.14) |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Aug. 01, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of outstanding Partnership Interests | A summary of the Partnership Interests is presented below (shares in thousands): Number of Shares Weighted Average Benchmark Price Outstanding on January 31, 2021 6,322 $ 6.92 Granted 406 18.00 Forfeitures (15) 8.46 Repurchases (58) 8.46 Outstanding prior to Reorganization Transactions 6,655 7.58 Conversion 4,684 Outstanding following Reorganization Transactions 11,339 $ — |
Schedule of non-vested Partnership Interests | Number of Shares Outstanding following Reorganization Transactions 11,339 Vested awards following the Reorganization Transactions (6,320) Non-vested following the Reorganization Transactions 5,019 Vested (1,890) Non-vested at August 1, 2021 3,129 |
Schedule of stock appreciation rights | A summary of the stock appreciation rights is presented below (shares in thousands): Number of Shares Weighted Average Benchmark Price Outstanding on January 31, 2021 200 $ 10.00 Granted 100 18.00 Outstanding prior to Reorganization Transactions 300 12.66 Conversion 334 Outstanding following Reorganization Transactions 634 $ 5.00 Number of Shares Weighted Average Benchmark Price Outstanding following the Reorganization Transactions 634 $ 5.00 Vested awards following the Reorganization Transactions (242) 3.24 Non-vested following the Reorganization Transactions 392 6.09 Vested (43) 3.24 Non-vested at August 1, 2021 349 $ 6.44 |
Basis of Presentation & Descr_3
Basis of Presentation & Description of Business (Details) | Aug. 20, 2021$ / sharesshares | Jul. 27, 2021USD ($)$ / sharesshares | Aug. 01, 2021USD ($)branch_locationsegmentstateshares | Aug. 02, 2020USD ($) | Jan. 31, 2021USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of branch locations (more than) | branch_location | 285 | ||||
Number of states with branches | state | 48 | ||||
Class of Stock and Other Items [Line Items] | |||||
IPO proceeds, net of underwriting discounts and commissions | $ | $ 663,700,000 | $ 0 | |||
Partnership Interests acquired from consolidated entity (in units) | 34,883,721 | ||||
Partnership Interests acquired from consolidated entity | $ | $ 655,900,000 | ||||
Partnership Interests held (in units) | 154,834,603 | ||||
Goodwill | $ | $ 1,452,500,000 | $ 1,452,700,000 | |||
Operating segments | segment | 1 | ||||
Reportable segments | segment | 1 | ||||
Percent of Company realized tax benefits payable to Limited Partners pursuant to Tax Receivable Agreements | 85.00% | ||||
Percent of realized tax benefits retained by Company, pursuant to Tax Receivable Agreements | 15.00% | ||||
Preferred dividends | $ | $ 0 | ||||
Preferred stock outstanding (in shares) | 0 | ||||
Subsequent event | |||||
Class of Stock and Other Items [Line Items] | |||||
Partnership Interests acquired from consolidated entity (in units) | 5,232,558 | ||||
Partnership Interests held (in units) | 160,067,161 | ||||
Class A common stock | |||||
Class of Stock and Other Items [Line Items] | |||||
Public ownership interest (in shares) | 34,883,721 | ||||
Class A common stock | Subsequent event | |||||
Class of Stock and Other Items [Line Items] | |||||
Public ownership interest (in shares) | 40,116,279 | ||||
IPO | |||||
Class of Stock and Other Items [Line Items] | |||||
Stock offering price (in dollars per share) | $ / shares | $ 20 | ||||
IPO proceeds, net of underwriting discounts and commissions | $ | $ 663,700,000 | ||||
Transaction costs directly attributable to the IPO Transaction | $ | $ 7,800,000 | ||||
IPO | Class A common stock | |||||
Class of Stock and Other Items [Line Items] | |||||
Number of shares issued (in share) | 34,883,721 | ||||
Underwriter option | Subsequent event | |||||
Class of Stock and Other Items [Line Items] | |||||
Stock offering price (in dollars per share) | $ / shares | $ 20 | ||||
Underwriter option | Class A common stock | Subsequent event | |||||
Class of Stock and Other Items [Line Items] | |||||
Number of shares issued (in share) | 5,232,558 | ||||
Stock offering price (in dollars per share) | $ / shares | $ 20 | ||||
Former Limited Partners | Class A common stock | |||||
Class of Stock and Other Items [Line Items] | |||||
Ownership interest (in shares) | 119,950,882 | ||||
Continuing Limited Partners | |||||
Class of Stock and Other Items [Line Items] | |||||
Partnership Interests held (in units) | 85,853,383 | ||||
Continuing Limited Partners | Class B common stock | |||||
Class of Stock and Other Items [Line Items] | |||||
Ownership interest (in shares) | 85,853,383 | ||||
Blocker Company | |||||
Class of Stock and Other Items [Line Items] | |||||
Goodwill | $ | $ 330,000,000 | ||||
Former Limited Partners | |||||
Class of Stock and Other Items [Line Items] | |||||
Percent of Company realized tax benefits payable to Limited Partners pursuant to Tax Receivable Agreements | 85.00% | ||||
Continuing Limited Partners | |||||
Class of Stock and Other Items [Line Items] | |||||
Percent of Company realized tax benefits payable to Limited Partners pursuant to Tax Receivable Agreements | 85.00% |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 1,297.6 | $ 955.9 | $ 2,352.7 | $ 1,798 |
Pipes, valves & fittings products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 887.8 | 621.7 | 1,592.8 | 1,160.3 |
Storm drainage products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 172.8 | 142.6 | 302.5 | 246.6 |
Fire protection products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 137.9 | 101 | 256.6 | 209.2 |
Meter products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 99.1 | $ 90.6 | $ 200.8 | $ 181.9 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | Mar. 11, 2020USD ($)branch_location | Aug. 01, 2021USD ($) | Aug. 02, 2020USD ($) |
Business Acquisition [Line Items] | |||
Payment of contingent consideration | $ 300,000 | $ 0 | |
R&B | |||
Business Acquisition [Line Items] | |||
Transaction value | $ 215,000,000 | ||
Initial cash consideration | $ 212,000,000 | ||
Payment of contingent consideration | $ 300,000 | ||
Number of branch locations acquired | branch_location | 10 | ||
Contingent consideration arrangement, low range of outcomes | $ 0 | ||
Contingent consideration arrangement, high range of outcomes | $ 3,000,000 | ||
Post-acquisition service period | 1 year | ||
Fair value of contingent consideration recognized | $ 0 | ||
Recognition of deferred tax liabilities as part of purchase price allocation | $ 31,200,000 |
Acquisitions - Allocation of Tr
Acquisitions - Allocation of Transaction Price (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 | Mar. 11, 2020 |
Allocation of transaction price | |||
Goodwill | $ 1,452.5 | $ 1,452.7 | |
R&B | |||
Allocation of transaction price | |||
Cash | $ 2.7 | ||
Accounts receivable | 25 | ||
Inventories | 19.8 | ||
Intangible assets | 114.5 | ||
Goodwill | 88.4 | ||
Operating lease right-of-use assets | 9.5 | ||
Other assets, current and non-current | 10.7 | ||
Total assets acquired | 270.6 | ||
Accounts payable | 17.5 | ||
Deferred income taxes | 31.2 | ||
Operating lease liabilities | 9.5 | ||
Other liabilities, current and non-current | 3.6 | ||
Net assets acquired | $ 208.8 |
Acquisitions - Total Considerat
Acquisitions - Total Consideration and Net Assets Acquired (Details) - R&B | Mar. 11, 2020USD ($) |
Total consideration and net assets acquired | |
Total consideration, net of cash | $ 207,400,000 |
Plus: Cash acquired in acquisition | 2,700,000 |
Less: Working capital adjustment | (1,300,000) |
Total consideration | 208,800,000 |
Less: non-cash contingent consideration | 0 |
Net assets acquired | $ 208,800,000 |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - R&B $ in Millions | 6 Months Ended |
Aug. 02, 2020USD ($) | |
Pro forma financial information | |
Net sales | $ 1,817 |
Net income | $ 10.1 |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets (Details) - R&B $ in Millions | Mar. 11, 2020USD ($) |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible Asset Amount | $ 113.7 |
Amortization Period | 15 years |
Discount Rate | 10.00% |
Attrition Rate | 7.50% |
Non-compete agreement | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible Asset Amount | $ 0.4 |
Amortization Period | 5 years |
Discount Rate | 10.00% |
Trademark | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible Asset Amount | $ 0.4 |
Amortization Period | 1 year |
Discount Rate | 10.00% |
Acquisitions - Acquisition-Rela
Acquisitions - Acquisition-Related Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
R&B | ||||
Business Acquisition [Line Items] | ||||
R&B Acquisition | $ 0 | $ 0.2 | $ 0 | $ 1.4 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Balance (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Goodwill: | ||
Gross Goodwill | $ 1,452.5 | $ 1,452.7 |
Accumulated Impairment | 0 | 0 |
Net Goodwill | $ 1,452.5 | $ 1,452.7 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill Rollforward (Details) $ in Millions | 6 Months Ended |
Aug. 01, 2021USD ($) | |
Goodwill changes: | |
Goodwill, beginning balance | $ 1,452.7 |
Goodwill acquired during the year | 0 |
Goodwill adjusted during the year | (0.2) |
Goodwill, ending balance | $ 1,452.5 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Intangible assets, net: | ||
Gross Intangible | $ 1,279.7 | $ 1,279.4 |
Accumulated Amortization | 418 | 360.2 |
Net Intangible | 861.7 | 919.2 |
Customer relationships | ||
Intangible assets, net: | ||
Gross Intangible | 1,277.1 | 1,276.8 |
Accumulated Amortization | 416.3 | 358.8 |
Net Intangible | 860.8 | 918 |
Other intangible assets | ||
Intangible assets, net: | ||
Gross Intangible | 2.6 | 2.6 |
Accumulated Amortization | 1.7 | 1.4 |
Net Intangible | $ 0.9 | $ 1.2 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Amortization expense related to intangible assets: | ||||
Amortization expense | $ 28.8 | $ 29.6 | $ 57.8 | $ 58.2 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Estimated Aggregate Amortization Expense (Details) $ in Millions | Aug. 01, 2021USD ($) |
Estimated prospective aggregate amortization expense: | |
Fiscal 2021 | $ 57 |
Fiscal 2022 | 107.1 |
Fiscal 2023 | 98.9 |
Fiscal 2024 | 91.3 |
Fiscal 2025 | $ 85.6 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term debt, Principal | $ 1,485 | $ 2,298 |
Unamortized Discount and Debt Issuance Costs | 23 | 46.3 |
Long-term Debt | 1,500 | 2,311 |
Senior Term Loan due August 2024 | Term loan | ||
Debt Instrument [Line Items] | ||
Current maturities of long-term debt, Principal | 0 | 13 |
Long-term debt, Principal | 0 | 1,248 |
Unamortized Discount and Debt Issuance Costs | 0 | 19.1 |
Senior Notes due September 2024 | Senior notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, Principal | 0 | 300 |
Unamortized Discount and Debt Issuance Costs | 0 | 8.9 |
Senior Notes due August 2025 | Senior notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, Principal | 0 | 750 |
Unamortized Discount and Debt Issuance Costs | 0 | 14.8 |
ABL Credit Facility due July 2026 | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, Principal | 0 | 0 |
Unamortized Discount and Debt Issuance Costs | 0 | 3.5 |
Senior Term Loan due July 2028 | Term loan | ||
Debt Instrument [Line Items] | ||
Current maturities of long-term debt, Principal | 15 | 0 |
Long-term debt, Principal | 1,485 | 0 |
Unamortized Discount and Debt Issuance Costs | $ 23 | $ 0 |
Debt - Debt Transactions Narrat
Debt - Debt Transactions Narrative (Details) - USD ($) | Jul. 27, 2021 | Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 |
Debt Instrument [Line Items] | |||||
Loss on debt modification and extinguishment | $ 50,400,000 | $ 0 | $ 50,400,000 | $ 0 | |
Redemption premiums | 17,500,000 | 0 | |||
Third-party debt issuance expenses | 12,800,000 | $ 8,100,000 | |||
Senior Term Loan | Term loan | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 1,300,000,000 | ||||
Repayment of senior debt | 1,257,800,000 | ||||
Write off of deferred financing fees | 4,800,000 | 4,800,000 | |||
New Senior Term Loan | Term loan | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 1,500,000,000 | ||||
Debt instrument term (in years) | 7 years | ||||
Third-party debt issuance expenses | $ 2,000,000 | $ 2,000,000 | |||
Periodic payment as a percentage of original principal | 0.25% | ||||
Weighted average interest rate (percent) | 2.59% | 2.59% | |||
Debt covenant, consolidated secured coverage ratio | 3.25 | 3.25 | |||
New Senior Term Loan | Term loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Applicable margin (percent) | 2.50% | ||||
New Senior Term Loan | Term loan | Level 2 | |||||
Debt Instrument [Line Items] | |||||
Fair value of debt | $ 1,485,000,000 | $ 1,485,000,000 | |||
Senior 2024 Notes | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Repayment of senior debt | $ 300,000,000 | ||||
Redemption price (percent) | 102.00% | ||||
Write off of deferred financing fees | 7,700,000 | 7,700,000 | |||
Redemption premiums | 6,000,000 | 6,000,000 | |||
Senior 2025 Notes | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Repayment of senior debt | $ 750,000,000 | ||||
Redemption price (percent) | 101.531% | ||||
Write off of deferred financing fees | 13,200,000 | 13,200,000 | |||
Redemption premiums | 11,500,000 | 11,500,000 | |||
ABL Credit Facility | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Increase in aggregate commitments | $ 150,000,000 | ||||
Aggregate commitments | $ 850,000,000 | 850,000,000 | $ 850,000,000 | ||
Fee on unfunded commitments (percent) | 0.25% | ||||
Amount outstanding | $ 0 | $ 0 | |||
Debt covenant, consolidated fixed charge coverage ratio | 1 | 1 | |||
Debt covenant, threshold percentage of borrowing base or aggregate effective commitments for fixed charge coverage ratio | 10.00% | 10.00% | |||
ABL Credit Facility | Revolving credit facility | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin (percent) | 1.25% | ||||
ABL Credit Facility | Revolving credit facility | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin (percent) | 1.75% | ||||
ABL Credit Facility | Revolving credit facility | Alternate base rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin (percent) | 0.25% | ||||
ABL Credit Facility | Revolving credit facility | Alternate base rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin (percent) | 0.75% | ||||
Cash flow | Interest rate swap | |||||
Debt Instrument [Line Items] | |||||
Loss on settlement | $ 5,200,000 | $ 5,200,000 |
Debt - Aggregate Future Debt Pa
Debt - Aggregate Future Debt Payments (Details) $ in Millions | Aug. 01, 2021USD ($) |
Aggregate future debt payments | |
Fiscal 2021 | $ 7.5 |
Fiscal 2022 | 15 |
Fiscal 2023 | 15 |
Fiscal 2024 | 15 |
Fiscal 2025 | $ 15 |
Debt - Interest Rate Swaps Narr
Debt - Interest Rate Swaps Narrative (Details) - USD ($) | Jul. 27, 2021 | Aug. 01, 2021 | Aug. 02, 2020 | Jul. 27, 2025 | Jul. 27, 2024 | Jul. 27, 2023 | Feb. 28, 2018 |
Derivative [Line Items] | |||||||
Settlement of interest rate swap | $ 5,200,000 | $ 0 | |||||
Interest rate swap 1 | Cash flow | |||||||
Derivative [Line Items] | |||||||
Fixed interest rate (percent) | 2.725% | ||||||
Notional amount | $ 500,000,000 | ||||||
Settlement of interest rate swap | $ 5,200,000 | ||||||
Interest rate swap 2 | |||||||
Derivative [Line Items] | |||||||
Fair value of this cash flow interest rate swap | $ 1,500,000 | ||||||
Interest rate swap 2 | Cash flow | |||||||
Derivative [Line Items] | |||||||
Fixed interest rate (percent) | 0.74% | 0.74% | |||||
Notional amount | $ 1,000,000,000 | ||||||
Interest rate swap 2 | Cash flow | Forecast | |||||||
Derivative [Line Items] | |||||||
Notional amount | $ 700,000,000 | $ 800,000,000 | $ 900,000,000 | ||||
Senior Term Loan | Term loan | |||||||
Derivative [Line Items] | |||||||
Repayment of senior debt | $ 1,257,800,000 | ||||||
New Senior Term Loan | Term loan | |||||||
Derivative [Line Items] | |||||||
Hedged borrowings | $ 1,000,000,000 | ||||||
New Senior Term Loan | Term loan | LIBOR | |||||||
Derivative [Line Items] | |||||||
Effective fixed rate (percent) | 3.24% | ||||||
Applicable margin (percent) | 2.50% |
Debt - Accumulated Other Compre
Debt - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Tax (expense) benefit on interest rate swap adjustments | ||||
Measurement adjustment (losses) for interest rate swap | $ 0.2 | $ 0.2 | ||
Reclassification of expense to interest expense | 0 | 0 | ||
Ending balance | 1,548 | 1,548 | ||
Interest rate swap 1 | ||||
Accumulated Other Comprehensive Loss | ||||
Measurement adjustment (losses) for interest rate swap | 0 | $ (0.1) | 0 | $ (4.2) |
Reclassification of expense to interest expense | 7.1 | 2 | 9.3 | 3.3 |
Tax (expense) benefit on interest rate swap adjustments | ||||
Measurement adjustment (losses) for interest rate swap | 0 | 0 | 0 | 0.6 |
Reclassification of expense to interest expense | (1.1) | (0.3) | (1.4) | (0.5) |
Interest rate swap 2 | ||||
Accumulated Other Comprehensive Loss | ||||
Measurement adjustment (losses) for interest rate swap | (1.5) | (1.5) | ||
Reclassification of expense to interest expense | 0 | 0 | ||
Accumulated other comprehensive loss, cash flow hedge | Interest rate swap 1 | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (6) | (13.4) | (7.9) | (11) |
Tax (expense) benefit on interest rate swap adjustments | ||||
Ending balance | 0 | $ (11.8) | 0 | $ (11.8) |
Accumulated other comprehensive loss, cash flow hedge | Interest rate swap 2 | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | 0 | 0 | ||
Tax (expense) benefit on interest rate swap adjustments | ||||
Ending balance | $ (1.3) | $ (1.3) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Aug. 01, 2021 | Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Jul. 30, 2021 | Jan. 31, 2021 | Mar. 11, 2020 |
Income Taxes [Line Items] | ||||||||
Effective tax rate (percent) | 24.60% | 26.10% | 20.10% | 25.50% | ||||
Valuation allowance against deferred tax assets | $ 0 | $ 0 | $ 0 | |||||
Percent of Company realized tax benefits payable to Limited Partners pursuant to Tax Receivable Agreements | 85.00% | 85.00% | 85.00% | |||||
Payable to related parties pursuant to Tax Receivable Agreements | $ 88,600,000 | $ 88,600,000 | $ 88,600,000 | $ 0 | ||||
Pro forma tax rate per agreements (percent) | 25.10% | 25.10% | 25.10% | |||||
Deferred tax liability associated partnership investment in Holdings | $ 58,800,000 | $ 58,800,000 | $ 58,800,000 | |||||
Former Limited Partners | ||||||||
Income Taxes [Line Items] | ||||||||
Percent of Company realized tax benefits payable to Limited Partners pursuant to Tax Receivable Agreements | 85.00% | 85.00% | 85.00% | |||||
Payable to related parties pursuant to Tax Receivable Agreements | $ 88,600,000 | $ 88,600,000 | $ 88,600,000 | |||||
Continuing Limited Partners | ||||||||
Income Taxes [Line Items] | ||||||||
Percent of Company realized tax benefits payable to Limited Partners pursuant to Tax Receivable Agreements | 85.00% | 85.00% | 85.00% | |||||
Payable to related parties pursuant to Tax Receivable Agreements | $ 0 | $ 0 | $ 0 | |||||
Estimated deferred tax asset target per agreement | 827,300,000 | 827,300,000 | 827,300,000 | |||||
Estimated tax liability per agreement | 703,200,000 | 703,200,000 | 703,200,000 | |||||
Estimated increase in deferred tax liability due to exchange of Partnership Interests | 84,500,000 | |||||||
Class A common stock | ||||||||
Income Taxes [Line Items] | ||||||||
Closing stock price (in dollars per share) | $ 26.50 | |||||||
R&B | ||||||||
Income Taxes [Line Items] | ||||||||
Recognition of deferred tax liabilities as part of purchase price allocation | $ 31,200,000 | |||||||
Deferred tax liability | $ 30,800,000 | $ 30,800,000 | $ 30,800,000 |
Leases - Operating Lease Costs
Leases - Operating Lease Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Leases [Abstract] | ||||
Operating Lease Cost | $ 14.1 | $ 13.2 | $ 27.9 | $ 26.1 |
Leases - Future Aggregate Renta
Leases - Future Aggregate Rental Payments (Details) $ in Millions | Aug. 01, 2021USD ($) |
Future aggregate rental payments under non-cancelable operating leases | |
Fiscal 2021 | $ 27.8 |
Fiscal 2022 | 44.1 |
Fiscal 2023 | 34.9 |
Fiscal 2024 | 24.6 |
Fiscal 2025 | 15.7 |
Thereafter | 19.5 |
Total minimum lease payments | 166.6 |
Less: present value discount | (22.4) |
Present value of lease liabilities | $ 144.2 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Aug. 01, 2021 |
Leases [Abstract] | |
Weighted average remaining lease term (years) | 2 years 9 months 18 days |
Weighted average discount rate | 4.20% |
Leases - Cash and Non-cash Impa
Leases - Cash and Non-cash Impacts Associated with Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Leases [Abstract] | ||||
Operating cash flows from operating leases | $ 14.1 | $ 13.2 | $ 27.9 | $ 26 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 12 | $ 5.5 | $ 37 | $ 18.9 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Self-insurance liabilities | $ 24.7 | $ 23.5 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Receivables (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Total Receivables, net | ||
Trade receivables, net of allowance for credit losses | $ 770.5 | $ 494.9 |
Vendor rebate receivables | 62.4 | 61.9 |
Receivables, net of allowance for credit losses | $ 832.9 | $ 556.8 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Property and Equipment, net | ||
Property, plant and equipment, gross | $ 163.6 | $ 158 |
Less accumulated depreciation and amortization | (81.4) | (71.8) |
Property, plant and equipment, net | 82.2 | 86.2 |
Land | ||
Property and Equipment, net | ||
Property, plant and equipment, gross | 23.4 | 23.1 |
Buildings and improvements | ||
Property and Equipment, net | ||
Property, plant and equipment, gross | 31.9 | 31.5 |
Transportation equipment | ||
Property and Equipment, net | ||
Property, plant and equipment, gross | 26.8 | 27.2 |
Furniture, fixtures and equipment | ||
Property and Equipment, net | ||
Property, plant and equipment, gross | 62.6 | 60 |
Capitalized software | ||
Property and Equipment, net | ||
Property, plant and equipment, gross | 14.3 | 13.1 |
Construction in progress | ||
Property and Equipment, net | ||
Property, plant and equipment, gross | $ 4.6 | $ 3.1 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information - Depreciation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Depreciation expense related to property and equipment, including capitalized software | ||||
Depreciation expense | $ 5.6 | $ 5.9 | $ 11.3 | $ 11.6 |
Supplemental Balance Sheet In_6
Supplemental Balance Sheet Information - Accrued Compensation and Benefits (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Accrued Compensation and Benefits | ||
Accrued bonuses and commissions | $ 48.2 | $ 50.5 |
Other compensation and benefits | 19.8 | 20.2 |
Accrued compensation and benefits | $ 68 | $ 70.7 |
Supplemental Balance Sheet In_7
Supplemental Balance Sheet Information - Other Current Liabilities (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Other Current Liabilities | ||
Accrued interest | $ 0.7 | $ 34.5 |
Accrued non-income taxes | 22.7 | 13.6 |
Other | 28.1 | 22 |
Other current liabilities | $ 51.5 | $ 70.1 |
Supplemental Balance Sheet In_8
Supplemental Balance Sheet Information - Other Liabilities (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Jan. 31, 2021 |
Other Liabilities | ||
Self-insurance reserves | $ 15.8 | $ 15.2 |
Other | 7.5 | 15.8 |
Other liabilities | $ 23.3 | $ 31 |
Non-controlling Interests (Deta
Non-controlling Interests (Details) - Holdings | Aug. 01, 2021shares |
Noncontrolling Interest [Line Items] | |
Partnership Interests (in units) | 237,558,952 |
Ownership Percentage | 100.00% |
Core & Main | |
Noncontrolling Interest [Line Items] | |
Partnership Interests (in units) | 154,834,603 |
Ownership Percentage | 65.18% |
Continuing Limited Partners | |
Noncontrolling Interest [Line Items] | |
Partnership Interests (in units) | 82,724,349 |
Ownership Percentage | 34.82% |
Basic and Diluted Loss Per Sh_3
Basic and Diluted Loss Per Share - Calculation (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 01, 2021 | Aug. 01, 2021 | Jul. 22, 2021 | May 02, 2021 | Aug. 02, 2020 | May 03, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | ||
Basic loss per share: | ||||||||||
Net income (loss) | $ (37) | $ 9.5 | $ 46.5 | $ 27.4 | $ 18.1 | $ (3.2) | $ 36.9 | $ 14.9 | ||
Net loss attributable to non-controlling interests | (17) | $ (17) | $ (17) | |||||||
Net loss available to Class A common stock | $ (20) | |||||||||
Weighted average shares outstanding | 138,978,366 | |||||||||
Net loss per share (in dollars per share) | $ (0.14) | $ (0.14) | [1] | $ (0.14) | [1] | |||||
Diluted loss per share: | ||||||||||
Net loss available to common shareholders - diluted | $ (20) | |||||||||
Weighted average shares outstanding - diluted | 138,978,366 | 138,978,366 | [1] | 138,978,366 | [1] | |||||
Net loss per share - diluted (in dollars per share) | $ (0.14) | $ (0.14) | [1] | $ (0.14) | [1] | |||||
[1] | Represents basic and diluted loss per share of Class A common stock and weighted average shares of Class A common stock outstanding for the period from July 23, 2021 through August 1, 2021, the period following the Reorganization Transactions described in Note 1. See Note 12 for additional information on basic and diluted loss per share. |
Basic and Diluted Loss Per Sh_4
Basic and Diluted Loss Per Share - Narrative (Details) | Aug. 01, 2021shares |
Vested Partnership Interests | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Securities not included in computation of diluted loss per share because the effect would have been anti-dilutive | 81,006,587 |
Unvested Partnership Interests | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Securities not included in computation of diluted loss per share because the effect would have been anti-dilutive | 3,129,034 |
Stock appreciation rights | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Securities not included in computation of diluted loss per share because the effect would have been anti-dilutive | 633,683 |
Equity-Based Compensation - Out
Equity-Based Compensation - Outstanding Partnership Interests (Details) - Partnership Interests - $ / shares shares in Thousands | Jul. 23, 2021 | Jul. 22, 2021 |
Number of Shares | ||
Outstanding, beginning (in shares) | 6,655 | 6,322 |
Granted (in shares) | 406 | |
Forfeitures (in shares) | (15) | |
Repurchases (in shares) | (58) | |
Conversion (in shares) | 4,684 | |
Outstanding, ending (in shares) | 11,339 | 6,655 |
Weighted Average Benchmark Price | ||
Outstanding, beginning (in dollars per share) | $ 7.58 | $ 6.92 |
Granted (in dollars per share) | 18 | |
Forfeitures (in dollars per share) | 8.46 | |
Repurchases (in dollars per share) | 8.46 | |
Outstanding, ending (in dollars per share) | $ 0 | $ 7.58 |
Equity-Based Compensation - Ves
Equity-Based Compensation - Vested and Non-vested Partnership Interests (Details) - Partnership Interests - shares shares in Thousands | Aug. 01, 2021 | Jul. 23, 2021 | Jul. 22, 2021 | Jan. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding (in shares) | 11,339 | 6,655 | 6,322 | |
Vested awards (in shares) | (6,320) | |||
Non-vested, Number of Shares | ||||
Non-vested, beginning (in shares) | 5,019 | |||
Vested (in shares) | (1,890) | |||
Non-vested, ending (in shares) | 3,129 |
Equity-Based Compensation - O_2
Equity-Based Compensation - Outstanding Stock Appreciation Rights (Details) - Stock appreciation rights - $ / shares shares in Thousands | Jul. 23, 2021 | Jul. 22, 2021 |
Number of Shares | ||
Outstanding, beginning (in shares) | 300 | 200 |
Granted (in shares) | 100 | |
Conversion (in shares) | 334 | |
Outstanding, ending (in shares) | 634 | 300 |
Weighted Average Benchmark Price | ||
Outstanding, beginning (in dollars per share) | $ 12.66 | $ 10 |
Granted (in dollars per share) | 18 | |
Outstanding, ending (in dollars per share) | $ 5 | $ 12.66 |
Equity-Based Compensation - V_2
Equity-Based Compensation - Vested and Non-vested Stock Appreciation Rights (Details) - Stock appreciation rights - $ / shares shares in Thousands | Aug. 01, 2021 | Jul. 23, 2021 | Jul. 22, 2021 | Jan. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding (in shares) | 634 | 300 | 200 | |
Outstanding , Weighted Average Benchmark Price (in dollars per share) | $ 5 | $ 12.66 | $ 10 | |
Vested awards (in shares) | (242) | |||
Vested awards, Weighted Average Benchmark Price (in dollars per share) | $ 3.24 | |||
Non-vested, Number of Shares | ||||
Non-vested, beginning (in shares) | 392 | |||
Vested (in shares) | (43) | |||
Non-vested, ending (in shares) | 349 | |||
Non-vested, Weighted Average Benchmark Price | ||||
Non-vested, beginning (in dollars per share) | $ 6.09 | |||
Vested (in dollars per share) | 3.24 | |||
Non-vested, ending (in dollars per share) | $ 6.44 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Jul. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation expense | $ 18.5 | $ 1 | $ 19.5 | $ 2 | |
Unrecognized share based compensation | $ 14.1 | $ 14.1 | |||
Omnibus Incentive Plan | Class A common stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved and available for future issuance | 12,600,000 | ||||
Omnibus Incentive Plan | Class A common stock | Stock appreciation rights | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved and available for future issuance | 633,683 |
Related Parties (Details)
Related Parties (Details) - Affiliates of CD&R - CD&R transactions - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Jan. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Purchases of product from affiliates | $ 500,000 | $ 100,000 | $ 1,100,000 | $ 300,000 | |
Amounts payable to affiliates | 0 | 0 | $ 0 | ||
Sales to affiliates | 100,000 | $ 0 | 5,300,000 | $ 0 | |
Receivable from affiliates | $ 0 | $ 0 | $ 100,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 30, 2021 | Aug. 20, 2021 | Aug. 09, 2021 | Jul. 27, 2021 |
Subsequent Event [Line Items] | ||||
Partnership Interests acquired from consolidated entity (in units) | 34,883,721 | |||
Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Partnership Interests acquired from consolidated entity (in units) | 5,232,558 | |||
Subsequent event | Pacific Pipe | ||||
Subsequent Event [Line Items] | ||||
Transaction value | $ 102.5 | |||
Subsequent event | L&M | ||||
Subsequent Event [Line Items] | ||||
Transaction value | $ 60 | |||
Subsequent event | Underwriter option | ||||
Subsequent Event [Line Items] | ||||
Stock offering price (in dollars per share) | $ 20 | |||
Subsequent event | Underwriter option | Class A common stock | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued (in share) | 5,232,558 | |||
Stock offering price (in dollars per share) | $ 20 | |||
Net proceeds after deducting underwriting discounts and commissions | $ 99.5 |