Benzinga | Sep 14, 2021 10:46AM EDT

Core & Main Clocks 36% Sales Growth In Q2, Notes Margin Expansion

* Core & Main Inc (NYSE:CNM) reported second-quarter FY21 sales growth of 35.7% year-over-year to ~$1.29 billion, attributable to strong volume growth and price inflation, with price inflation representing approximately half of the net sales increase.

* The gross margin expanded by 100 bps to 25.1%, reflecting sourcing and pricing improvements.

* The operating income increased by 67.7% Y/Y to $99.8 million, and the margin expanded by 147 bps to 7.7%.

* Adjusted EBITDA increased by 56.8% Y/Y to $155.2 million, and margin expanded by 160 bps to 12%.

* Net Debt Leverage decreased to 3.3x as of August 1, 2021, compared with 5.2x as of May 2, 2021.

* The company's outlook for end markets remains positive, and it is confident to deliver above-market results for its stakeholders in 2021 and beyond.

* Core & Main held $66.6 million of cash and cash equivalents as of August 1, 2021. Net cash used in operating activities year-to-date of $99.1 million, compared to cash generated of $93.2 million a year ago.

* FY21 Outlook: Core & Main expects Adjusted EBITDA of $470 million - $510 million, representing a year-over-year increase of 37% - 49%.

* Price Action: CNM shares are trading higher by 0.71% at $26.99 on the last check Tuesday.