Greetings, and welcome to the SiteOne Landscape Supply third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. John Guthrie, Executive Vice President and Chief Financial Officer for SiteOne Landscape Supply. Thank you. You may begin. Thank you, and good morning, everyone. We issued our third quarter 2021 earnings press release this morning and posted a slide presentation to the investor relations portion of our website at investors.siteone.com. I am joined today by Doug Black, our Chairman and Chief Executive Officer, and Scott Salmon, Executive Vice President, Strategy and Development. Before we begin, I would like to remind everyone that today's press release, slide presentation, and the statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release in our filings with the Securities and Exchange Commission. Additionally, during today's call, we will discuss non-GAAP measures which we believe can be useful in evaluating our performance. A reconciliation of these measures can be found in our earnings release and in the slide presentation. I would now like to turn the call over to Doug Black. Thank you, John. Good morning, and thank you for joining us today. We were pleased to continue our excellent momentum during the third quarter, with strong growth in sales and profits. We have seen demand for professional landscaping products continue to be healthy as we lap the stronger growth months from last year. In this environment, our teams have continued to perform well, executing our commercial and operational initiatives and delivering superior value to our customers and suppliers while overcoming rapid product cost inflation, select supply shortages, and ongoing freight and labor constraints. As a result, we believe that we are steadily gaining market share on top of the underlying market growth. Furthermore, our recent acquisitions performed strongly, and we added another high-performing company to our family during the quarter. Accordingly, we are pleased to once again be raising our financial guidance for the year. It is clear at this point that 2021 will be a breakthrough year for SiteOne as we continue to build our great company and execute our long-term strategy. I will start today's call with a brief overview of our unique market position and our strategy for long-term performance and growth, followed by some highlights from the quarter. John Guthrie will then walk you through our third quarter financial results in more detail and provide an update on our balance sheet and liquidity position. Scott Salmon will discuss our acquisition strategy, and then I will come back and address our outlook for the remainder of the year before taking your questions. As shown on slide four of the earnings presentation, we have grown our footprint to more than 590 branches and four major distribution centers across 45 U.S. states and six Canadian provinces. We are the clear industry leader, yet we estimate that we only have about a 13% share of the very fragmented $20 billion wholesale landscaping products distribution market. Accordingly, our remaining growth opportunity is significant. We have a balanced mix of business with 59% focused on maintenance, repair, and upgrade, 27% focused on new residential construction, and 14% on new commercial construction. We are also the only national full product line wholesale distributor in the market. Our balanced end market mix, broad product portfolio, and geographic coverage give us multiple avenues to grow and more ways to add value for our customers and suppliers while providing important resiliency in softer markets. Turning to slide five, while we have come a long way in building SiteOne, we are still developing our full capabilities across all our product lines, and so we remain highly focused on our commercial and operational initiatives to build our capabilities and improve the value that we deliver to customers and suppliers. These initiatives are complemented by our acquisition strategy, which builds out our product portfolio, moves us into new geographic markets, and adds terrific new talent to SiteOne. Taken all together, our strategy creates superior value for our shareholders through organic growth, EBITDA margin expansion, and acquisition growth. If you turn to slide six, you will see that our strategy is working. Over the last five years, we have been able to deliver consistent organic growth, strong acquisition growth, and solid EBITDA margin expansion while investing heavily in SG&A to build our IT, category management, supply chain, finance, marketing, operational excellence, and acquisition teams, as well as our underlying systems infrastructure, including our digital capabilities. While work remains to be done on building our systems infrastructure, our field support teams are largely in place. Each year, our teamwork and synergies across SiteOne improve, along with our ability to leverage our infrastructure investments. We can see this in our increased market share gains, organic growth, and in the improved operating leverage that we are continuing to achieve in 2021. Going forward, we will build and leverage our capabilities further to accelerate performance for all stakeholders. You will also note that we have now completed 62 acquisitions across the irrigation, agronomics, nursery, hardscapes, and landscape supplies product lines during the last 7.5 years, with 6 so far in 2021. We only acquire well-run companies, and so all of these acquisitions are already high-performing companies before joining SiteOne. After they join us, we together enjoy the benefits of our combined commercial and operational capabilities. Acquisitions are a key source of new talent and ideas, and therefore they enhance our competitive advantage as we grow. Our acquisition pipeline remains very robust, and we have significant potential to continue growing through acquisition for many years to come. Slide 7 shows the long runway that we have ahead in filling in our product portfolio, which we aim to do primarily through acquisition, especially in the nursery, hardscapes, and landscape supplies categories. We are well-networked with the best companies in our industry and expect to continue filling in these markets systematically over the next decade. I will now discuss some of the third quarter performance highlights, as shown on slide 8. We delivered 25% net sales growth in the third quarter, with a nice balance of 15% organic daily sales growth and 10% net sales growth added through acquisitions. As expected, we saw our organic volume growth level off against the very high volume growth that we experienced in the third quarter of last year. Accordingly, our organic sales growth in the third quarter was driven mainly by price inflation as we worked with our suppliers and customers to pass through the extraordinary product cost inflation that has occurred in the market. We have seen this trend of lower volume growth and significant inflation continue in the fourth quarter so far, and we expect inflation will remain higher than normal through the first half of next year due to ongoing product constraints and rising manufacturer input costs. On top of the market growth, we believe that we are gaining share in all of our product categories as we execute our category management, operational excellence, sales force performance, and marketing initiatives. We are especially pleased with our progress in attracting new smaller and mid-size customers to SiteOne and increasing our market share among Hispanic customers. These segments are growing faster with us than our average, and they offer tremendous growth opportunities for SiteOne over the next several years. Overall, our initiatives are improving our product portfolio, customer service, partnership value, and our customers' awareness of our capabilities. As a result, we are now attracting new customers and gaining wallet share with existing customers on a more consistent basis. Gross margin improved 310 basis points to 36.4% in the third quarter, as we benefited significantly from our proactive inventory management during this high inflation period and as we earn higher supplier incentives with strong year-to-date organic sales. As we work through our inventory during the remainder of the year and as inflation normalizes in 2022, we expect this dynamic to be less pronounced. However, we are confident in our ability to continue executing our commercial and operational initiatives and expect to drive further improvement in gross margin over the next several years. On the SG&A side, our operational achievements and disciplined cost management were more than offset by higher variable compensation expense as our teams worked very hard to service our customers and achieve strong sales and profit results for the quarter. Accordingly, SG&A as a percent of net sales increased by 70 basis points to 25.1%. We continue to achieve cost efficiency benefits from Mobile PRO and from our new transportation management system, or TMS, which we began rolling out in 2019 and 2020. These two deployments highlight the power of investing in new technologies to achieve customer service benefits and increase operating leverage. We will continue to broaden the use of Mobile PRO and TMS across SiteOne while making more of these types of investments through our operational excellence teams in the future. The combination of strong organic sales, impressive gross margin improvement, and good contribution from acquisitions allowed us to deliver adjusted EBITDA growth of 46% for the third quarter and improve our adjusted EBITDA margin by 200 basis points. As mentioned on our second quarter earnings call, we expect to surpass the 10% adjusted EBITDA margin milestone this year. We have significant capability to further improve our EBITDA margin in years to come and expect to provide some new longer-term targets when we report our fourth quarter results. In addition to Mobile PRO and TMS, we continued to make progress on our other important investments during the third quarter to build our capabilities for the future. During the third quarter and into October, we established our fourth major distribution center in Dallas, Texas, to support our growing company and continue achieving competitive advantage with our world-class supply chain capabilities. The Dallas DC will support our business in the middle of the United States and help optimize our overall inventory and freight management strategies. During the quarter, we continued the development and rollout of our new Salesforce customer relationship management system, or CRM, which will help our over 400 outside sellers bring increased value to our customers and drive new business through new customers and increased share of wallet. We continue to make progress with siteone.com as we use the learnings gained from our Tampa, Florida, and Los Angeles, California, pilots to further improve the content, features, and service capabilities of our e-commerce platform. We are seeing the usage of siteone.com start to ramp up at a higher rate in these select markets, and we look forward to expanding the rollout of these improvements to the rest of SiteOne in 2022 and beyond. At the same time, we are continuing to connect directly with our larger customers to facilitate their ability to secure jobs and easily order from SiteOne. We will continue to invest to ensure that SiteOne is the digital leader in the professional landscaping services market. Lastly, we made further strategic investments in marketing during the third quarter to increase awareness of SiteOne and to drive organic sales growth in our targeted customer and product segments. The marketing team also initiated a complete review of our partners program to further improve customer benefits and loyalty in the coming years. Overall, through our strategic investments, we remain focused on providing world-class tools, processes, and technologies to deliver value to our customers and suppliers and help our associates be more productive so that they can better help our customers to win. On the acquisition front, we completed the acquisition of Green Brothers Earth Works during the quarter, bringing our total companies added year to date to six. These six companies are all high performers and provide us with excellent new talent and capability for growth in their respective markets while adding approximately $100 million in trailing twelve-month sales to SiteOne. Our development teams remain active with several attractive target companies, and we expect to complete additional deals during the remainder of the year. To ensure that we continue to drive attractive acquisition growth as we become a larger company, we recently expanded our development team under Scott Salmon, including the addition of a senior leader focused solely on integrating our new companies. We plan for our expanded team to drive even higher growth through acquisition in the next several years. With an experienced team, broad and deep relationships with the best companies, a strong balance sheet, and an exceptional reputation, we remain well positioned to grow consistently through acquisition. As a final recent achievement, we were excited to share our 2021 ESG report that was published in early October. In this report, we share our vision to become a true company of excellence, which we define with five objectives. These objectives are, 1, be a great place to work for our associates. 2, deliver superior value to our customers. 3, be the distributor of choice for our suppliers. 4, deliver attractive performance and growth to our shareholders. And 5, be a good neighbor in our communities. The 2021 report includes expanded disclosure of our team's progress across these objectives, and we look forward to updating you on our progress annually and continuing to enhance our disclosures going forward. In summary, I'm very proud of our team as we are keeping everyone safe, serving and supporting our customers, and delivering outstanding financial results in this extraordinary environment. We remain excited about both the short and long-term opportunities to drive excellent performance and growth for all our stakeholders. Now John will walk you through the quarter in more detail. John? Thanks, Doug. I'll begin on slide nine with some highlights from our third quarter results. We reported a net sales increase of 25% to $936 million in the quarter. There were 63 selling days this quarter, which is consistent with the prior year period. As a reminder, I want to highlight that we will have 61 selling days in the fourth quarter, which is 4 fewer than the 65 days we had in the fourth quarter of 2020. This translates into roughly $41 million in reduced sales for the fourth quarter of 2021. Organic daily sales increased 15% in the third quarter compared to the 11% we saw in the same quarter last year. Our organic daily sales benefited from the continuation of the stay-at-home trend as consumers spend more on maintaining and upgrading their outdoor living spaces. In addition, organic daily sales benefited from price inflation resulting from rising product costs. Prices increased 15% for the third quarter and 9% year-to-date as we saw supplier cost increases across all major product lines. Irrigation products were significantly impacted by increases in PVC pipe and plastic resin resulting from the supply disruptions caused by Winter Storm Uri and Hurricane Ida, as well as strong industrial demand. Agronomic products were significantly impacted by cost increases in fertilizer and grass seed. Urea, the primary ingredient in fertilizer, has increased from approximately $450 per ton at the beginning of the third quarter to over $700 per ton currently, as higher energy costs and strong demand from the agricultural markets have driven up prices. All products have also been impacted by increased freight and shipping costs. Fortunately, our strategic initiatives in supply chain have helped mitigate the impact. We're managing through the cost increases, and the market is passing the increases through in higher prices. We do not see the product cost inflation abating anytime soon, and as a result, we are increasing our full-year price increase forecast to 10%-11%. Organic daily sales for landscaping products, which includes irrigation, nursery, hardscapes, outdoor lighting, and landscape accessories, was strong again this quarter, increasing 14% compared to the prior year period. Organic daily sales for agronomic products, which includes fertilizer, control products, ice melt, and equipment, was also strong and grew 19% for the quarter. Both landscaping and agronomic products benefited from the stay-at-home trend and price inflation. Geographically, all regions were up with the greatest growth in the Sun Belt markets. While price played a large role in the growth for the quarter, we were pleased that the sales volumes were maintained despite the tough comparison with last year when we saw sales volumes increase following the reopening of our markets. We have also seen stronger growth this year with our target professional contractor compared to the DIY consumer. As Doug mentioned, we expect organic daily sales growth to remain healthy for the remainder of fiscal 2021. Acquisition sales, which reflect the sales attributable to acquisitions completed in both 2020 and 2021, contributed approximately $74 million or 10% to the overall third quarter growth rate. We are pleased with the performance of our acquisitions. Scott will provide more details regarding our acquisition strategy later in the call. Gross profit increased 36% to $341 million for the third quarter, and gross margin increased 310 basis points to 36.4%. The gross margin improvement reflects the execution of our supply chain initiatives for favorable pricing and increased supplier incentives. With regards to the supply chain initiatives, we have benefited from the previously mentioned freight initiatives as well as the strategic inventory purchases and higher inventory stocking levels ahead of the supplier cost increases. Selling, general, and administrative expense, or SG&A, increased 28% to $235 million for the third quarter. SG&A, as a percentage of net sales, increased 70 basis points to 25.1%. The increase in SG&A as a percentage of net sales primarily reflects increased incentive compensation resulting from our strong performance. Without the increased incentive compensation, we would have achieved SG&A leverage again this quarter. For the third quarter, we recorded income tax expense of $19.1 million compared to $13.8 million in the prior year period. The effective tax rate for the quarter was 19.3% compared to 22.3% for the prior year period. The decrease in the effective tax rate was due primarily to an increase in the amount of excess tax benefits from stock-based compensation. For 2021, we expect our effective tax rate will be between 25.5% and 26.5%, excluding discrete items such as excess tax benefits. We recorded net income for the third quarter of $80 million compared to $48.2 million for the prior year period. The improvement was primarily driven by our strong sales growth and gross margin improvement. Our weighted average diluted share count for the third quarter was 45.8 million compared to 44.6 million for the prior year period. This increase was primarily attributable to our August 6, 2020 equity offering. Adjusted EBITDA for the third quarter was $128 million compared to $88 million for the same period in the prior year. Adjusted EBITDA margin, reflecting our gross margin improvement, increased 200 basis points to 13.7%. Now I would like to provide a brief update on our balance sheet and cash flow statement as shown on slide 10. Net working capital at the end of the third quarter was $715 million compared to $710 million for the prior year period. The increase in net working capital is attributable to higher receivables resulting from our strong sales growth and our decision to operate with higher inventory levels given the supply chain disruptions and the strong sales environment. The increase in receivables and inventory was partially offset by less cash on the balance sheet as we have deployed the cash for acquisitions and debt reduction. Cash provided by operations increased to $67 million for the quarter compared to $62 million for the prior year period. The increase was primarily driven by our increased profitability, partially offset by the increase in working capital. We made cash investments of $15 million for the quarter compared to $31 million for the same quarter last year. The decrease in cash investments reflects less acquisition spend this quarter compared to the prior year period. Net debt at the end of the quarter was approximately $208 million compared to $195 million at the end of the prior year period. Leverage at the end of the third quarter decreased to 0.5 times our trailing twelve months adjusted EBITDA compared to 0.8 times at the end of the third quarter of 2020. This lower leverage reflects our improved profitability. Our target net debt to adjusted EBITDA leverage range at year-end is 1x-2x. We expect to be at or below our target leverage range, depending upon the amount of acquisition investment in the fourth quarter. At the end of the quarter, we had liquidity of $522 million, which consisted of $158 million of cash on hand and approximately $364 million in available capacity under our ABL facility. As a result of our strong operating performance, low leverage, and disciplined financial policy, Moody's upgraded our corporate debt rating to Ba2 this quarter. This follows a similar upgrade from S&P to a BB rating earlier this year. In summary, our priority from a balance sheet perspective is to maintain our financial strength and flexibility without sacrificing long-term growth or market opportunities. I will now turn the call over to Scott for an update on our acquisition strategy. Thanks, John. As shown on slide 11, we acquired one company in the third quarter, bringing our total to six year-to-date, with a combined trailing twelve-month net sales of approximately $100 million. Since 2014, we have acquired 62 companies with approximately $1.2 billion in trailing twelve-month net sales added to SiteOne. Turning to slide 12, you will find information on our most recent acquisition. On August 23, we acquired Green Brothers Earth Works, strengthening our landscape supplies and hardscapes presence in the Atlanta market. Summarizing on slide 13, our acquisition strategy continued to create significant value for SiteOne. Our pipeline remains strong and growing with three handshake deals, 10 active negotiations, and over 20 additional companies in early discussions. We expect to have a strong finish this year and have good momentum going into 2022. We are humbled that so many entrepreneurs are choosing SiteOne as the new home for their family business and are continuing to grow their companies with us. We provide them with the resources and flexibility to pursue both their personal and professional passions, and we are excited to have over 50 former owners today helping to drive our growth. These innovative leaders bring new ideas to SiteOne and help us realize our vision of being stronger together. We are also excited, as Doug mentioned, to be expanding our strategy and development team to enable both greater acquisition capacity and increased leadership for world-class integration. Providing an outstanding integration experience for the newly acquired companies delivers two very powerful outcomes. First, it accelerates our ability to create value for our customers and suppliers. Second, it creates many motivated and passionate ambassadors for SiteOne who help us attract other high-performing companies. I want to thank the entire SiteOne team for their passion and commitment to making SiteOne a great place to work and for welcoming the new teams when they join the SiteOne family. I am confident in our ability to deliver value to all of our stakeholders through further acquisitions in 2021 and beyond. I will now turn the call back to Doug. Thanks, Scott. I'll wrap up on slide 14. As mentioned, we have seen the strong organic sales growth that we experienced in the third quarter continue in October. October represents approximately 50% of our fourth quarter sales, and so we now anticipate healthy sales growth for the fourth quarter in total. Keep in mind that the weather was particularly warm last year in November and December, and our organic daily sales growth for the fourth quarter last year was very strong at 12%. Accordingly, we have built some moderation of sales growth into our forecast for the last two months of the year. In terms of end markets, we are currently seeing solid demand trends in all our end markets, maintenance, repair and upgrade, and both residential and commercial new construction. Our contractors remain busy and have strong backlogs to carry them through the remainder of the year and into 2022. Taken altogether, we expect to achieve healthy organic daily sales growth in the fourth quarter and record sales growth for the full year 2021. Additionally, we will continue to execute our commercial and operational initiatives, which we believe will yield good gross margin improvements and SD&A leverage for the full year, leading to solid adjusted EBITDA growth and margin expansion, exceeding our 10% milestone for adjusted EBITDA margin in 2021. In terms of acquisitions, as Scott mentioned, we currently have a very strong pipeline of high-quality companies and look forward to adding more of these to the SiteOne family before the end of the year. Our acquisitions are performing very well, and we continue to improve our ability to integrate them into our company. Accordingly, we expect acquisitions to contribute strongly to our performance and growth in 2021 and the years ahead. With all these factors in mind, we are raising our fiscal 2021 adjusted EBITDA guidance to be in the range of $380 million-$400 million, which represents year-over-year growth of 46%-54%. This range does not factor any contribution from unannounced acquisitions. This compares to our prior estimate of $335 million-$365 million. In closing, I would like to sincerely thank all our SiteOne associates who continue to amaze me with their passion, commitment, teamwork, and selfless service. We have a tremendous team, and it is an honor to be joined with them as we deliver increasing value for all our stakeholders. I would also like to thank our suppliers for supporting us so strongly and our customers for allowing us to be their partner. Operator, please open the line for questions. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In the interest of time, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Ryan Merkel with William Blair. Please proceed with your question. Thanks, and good morning, everyone. Good morning, Ryan. A lot of good news in this report. I wanted to focus on gross margins. Can you break out the impact of supply chain price and supplier incentives in terms of the year-over-year impact? Can you speak to sustainability, kind of focusing on Q4 right now, but also supply chain? How much more margin expansion do you expect to see from that? We would say it was roughly kind of 1/3 of the improvement year-over-year would be probably due to incentive, with the remainder kind of supply chain early buys combination driving that. What was your follow-up question then, Ryan? Just the sustainability into Q4 in terms of gross margins. I think seasonally it usually goes down a little. Should we expect to see that? Yeah. We would still expect we're forecasting continued positive growth in gross margin in the fourth quarter. We think it'll be another strong quarter. We expect the pricing that we're seeing now to carry through the fourth quarter. It'll be another good quarter also with regards to gross margin. Got it. Okay. Pricing up 15%, that was a little bigger than I was thinking for the quarter. Was the big surprise fertilizer in the quarter or was there something else? How should we think about the next few quarters on price? I know you're not giving guidance, but I'm just curious how it sort of trends, if you can help us there. Have your suppliers raised prices yet for 2022? We're following the market, similar to what we're seeing with our other competitors. With regards to the quarter, we think in general we break it down the following way. We think kind of this current increase with fertilizer, PVC pipe, those increases that really kind of accelerated in late August and September. We think those will carry through at least through the first half of the rest of this year and through probably the first half of next year, with regards when we start comping the higher ones. Then there may, since those have some commodity component, there may be some fluctuation with regards to that. We know also in the beginning of 2022, there are some suppliers who haven't put in the full cost increases that they're seeing in their raw materials. We expect a second wave to kind of come through at the beginning of next year of price inflation from our suppliers. In general, at least for the foreseeable future, we expect prices will be on a historical basis, relatively large. All right. Putting that in my own words, probably strong double-digit price at least through first half of 2022, then there's still inflation. Suppliers are still gonna raise prices, so still above normal for second half 2022 based on what we know right now. Well, obviously, we'll be comping this year in the second half of 2022, but certainly through the first half. I think that's fair what we're seeing right now. Great. Thanks for the comments. Great quarter. Pass it on. Thank you. Our next question comes from the line of Stephen Volkmann with Jefferies. Please proceed with your question. Hi. Good morning, guys. Thanks for taking the question. I'm gonna stick with the gross margin topic, if that's all right, 'cause I'm not quite sure if I understood sort of how to think about maybe 2022 and 2023. Because on the one hand, you talked about further opportunities as you work through your internal initiatives, but at the same time, I think there's probably some temporary benefits here, relative to some of the trends that you mentioned. You know, should I think about 2022 sort of pulling back a little bit, but then longer term it can still expand? Or were you actually trying to say that 2022 could actually see expansion? Well, I think as John mentioned, we've got a commodity component, which is, you know, the PVC pipe, fertilizer, you know, and put seed in there. That's driving a little under half of the inflation. That commodity component will likely, at some point in 2022, come off and may actually revert back, right? Or go negative. At the same time, you have the rest of the inflation, which is more kind of keeping up with costs on all the other products. It also includes freight. That's more sustainable. As John mentioned, the manufacturers really haven't passed all their costs through yet, and so we expect another wave on that piece, and let's call that a little over half. in 2022, you have the dynamic of the, let's call it the standard inflation, you know, continuing to move upward. You have the commodity inflation that may tail downward some time through 2022, and the mix of those, you know, you still end up with positive inflation in 2022, a stronger first half, not as much in the second half. You know, that's the dynamic we expect. Obviously, a lot can happen between now and then, but that's basically the trend. John, you wanna- Yeah, I would. Well, we're not fully giving guidance right now, but I think if we were to characterize the quarter, you said there is probably some temporary component on gross margin. There is also a temporary component on SG&A that somewhat offsets. Longer term, we believe you know kind of the initiatives are driving it, are driving kind of performance which we believe long term will take it. You know, we're not giving EBITDA guidance or 2022 guidance today. We'll give more at the end of next quarter. But I'll just say there'll be puts and takes next year and you know we still you know are positive on the outlook. Great. No, that's good color. I appreciate it. One thing I was a little surprised that you didn't talk too much about, 'cause we've been hearing it everywhere else, is just, you know, bottlenecks with respect to availability of product. Maybe that's not as big a deal for you guys, but I'm thinking about that in terms of are you, do you think you'll be able to add in sort of your normal fourth quarter inventory builds, maybe even a little bigger than normal given what's going on with inflation? Just talk about that dynamic, if you would, as we sort of shift into 2022. Right. So yeah, we've been facing the supply chain issues and bottlenecks and delays really for the last two years. You know, luckily, we have a great supply chain team. It's a strength of ours. We have the three distribution centers, you know, in Georgia, California, and Pennsylvania. We noted that we're putting in the fourth in Dallas, Texas, which gives us, you know, significantly more square footage. Through that supply chain team and those DCs and our over 600 branches, we do plan to continue to go heavy on inventory. We did that this year, and it insulated us a lot from a lot of the supply chain challenges. We're gonna continue that strategy going forward, and we have even more capacity to execute that strategy going forward. You know, you have constraints in nursery and in hardscapes that don't go through the DC, but there again, our teams stay out in front of the market. We've been able so far to battle our way to keep you know, stock and be able to supply our customers. We feel we'll continue to be able to manage you know, the supply chain shortages in both those you know, DC-related products and locally procured products on into 2022. Great. Thanks, guys. I'll pass it on. Appreciate it. Thank you. Thank you. Our next question comes from the line of Matthew Bouley with Barclays. Please proceed with your question. Hey, morning, everyone. Thanks for taking the questions. So sticking with the pricing topic, I know you called out sort of the commodity component versus the more sticky component of your different categories. In that scenario that you just mentioned, Doug, where commodity prices, you know, if you saw normalization, I'm just curious how the mechanics would work in such a scenario. Would you still see gross margin percentage expansion as kind of an offset to the dollar headwind? Is there a working capital benefit? How does that all come together if you did see that type of scenario? Thank you. No, good question. You know, obviously, we follow the market. We remain competitive in the market as commodities go up and as commodities go down. You know, we're always working to make that at a minimum gross margin neutral in terms of how we pass that on to the market. Then obviously, you know, as working capital, if you're having higher inflation, it's gonna make your working capital a little higher. If that drops down, your working capital will be a little lower, but so will sales. You know, those are the dynamics. You know, we have very good teams. We have great relationships with our customers and, you know, we're able to work through those ups and downs and still maintain our gross margin. Of course, we have our initiatives that are designed to improve our gross margin with that as a basis. Got it. Okay. No, that's helpful color there. Secondly, the commentary on gaining market share. You know, it sounds like you're both taking wallet share and winning new customers. Obviously, a lot of investments you're making alongside that. So any specifics to potentially call out that you're doing to kinda hold on to those share gains as we think about 2022? Thank you. Well, you know, we're gonna continue to focus on the smaller customers where we have less share than we do with our larger customers. Of course, you know, we serve all our customers and are focused on wallet share. We are making gains there, you know, with, in terms of market share. Overall market share is 13%. It tends to be more towards the 20%-25% of the larger customers, more 6%-8% with the small customers. So we have a long way to go with small customers in terms of gaining share. We're feeling good about our progress this year. Just as a specific, our overall customer count on the base is up 2.5%. With all the moving parts, we are, you know, winning new customers, and we feel like we're winning wallet share with the larger customers. We're gonna continue to stay focused. We do this really by improving the customer experience. We've got our operational excellence teams. We've got TMS. We've got Mobile PRO. We've got siteone.com. Those are tools we're using to do that. We focus our marketing efforts on the smaller customer, on the Hispanic customer, and on those groups. With our sales force, you know, we're continuing to work on our sales force performance. We have a new CRM that we're rolling out across our sales force, and that's really designed to gain more wallet share with those medium to larger customers. We can also hook in directly with our larger customers digitally, and that helps us to provide stickiness and gain wallet share with those larger customers. We have multiple initiatives going after, you know, the same thing, which is we wanna win new customers and keep them, and we wanna earn greater wallet share and keep adding. We feel like we're making progress. You know, the measurement of that is always tricky, but, you know, the information we're getting back from our suppliers and what we kinda see and can measure in the field tell us that we're gaining market share more consistently than, say, we would've two, three years ago, and we aim to continue that going forward. Great. Well, thank you, Doug, and good luck, everybody. Thank you. Thank you. Our next question comes from the line of Quinn Fredrickson with Baird. Please proceed with your question. Hey, good morning, guys. Thanks for taking the question. Good morning. Good morning. Wanted to start off with a question on OpEx and just what you see as transitory. You know, I know you mentioned the variable compensation, but just with the strong sales results, labor inflation, and then the new Dallas DC, I guess is the right way to think about it, the variable comp portion of that is more transitory, and then the rest, you know, kind of the opportunities to leverage the growth over that level of expenses, is that the right way to think about it? That's right. If we hadn't had kind of the you know the incentive comp for our associates, we would have actually achieved SG&A leverage this quarter. With regards to that, we achieved good leverage on you know the traditional kind of our operations. We're basically the only things that we didn't were kind of the things that were one time last year, you know, if you will. You know, healthcare, a little bit more travel and expense, but relatively minor amounts. Those weren't significant contributors to our overall OpEx. We still feel very good about you know what we're doing and achieving the leverage. Obviously, when we have a big quarter like that, we wanna reward our associates and that's what you're seeing on the OpEx side. Okay. Makes sense. Secondly, just on demand, specifically within the commercial side and just interesting to hear the strength there. Would you say that's mostly maintenance and upgrades versus new construction, or is it pretty broad-based there? Just what verticals are you seeing the most strength within commercial? Yeah. I would call it broad-based. And you can see that really reflected in the ABI index, which is going up. We see that in our own project services group, which are bidding on, and those would be primarily new commercial construction projects. That bidding has accelerated really in the fall of this year. I would say it's broad-based. You know, we have our typical maintenance and upgrades on commercial properties, but the new commercial construction seems to be robust and it's really the type of commercial that follows residential, you know, retail, you know, education, you know, et cetera. Those types of commercial projects. Some of it also is, you know, kind of, you know, apartments and those types of properties are really, you know, quite strong right now, which is interesting, but I think it reflects the strength in residential and the fact that, you know, you've got now with folks kind of working remotely and companies going to hybrid scenarios, you know, that supports more, you know, neighborhood growth on the outskirts of the metro areas. You know, when you put in a neighborhood, you need to put in shopping and grocery and gas stations and other commercial, you know, properties to keep up with that growth. That's what we're seeing. Okay. Thank you very much. Thank you. Our next question comes from the line of Judy Merrick with Truist Securities. Please proceed with your question. I think it's Judy in for Keith Hughes. Most of the questions have been asked, but is there anything else that you can add from the pauses you saw from either customer mix, you mentioned some of the smaller customers or any of the impact from expanding private label? Well, we didn't talk about private label, but we are achieving a lot of success there. We have our LESCO brand, which is our private label agronomic brand, which we've got a lot of new products out with LESCO. We're driving more LESCO equipment, you know, spreaders, sprayers, et cetera. We're just excited that the growth of the LESCO brand is very healthy. You know, we're excited about progress there. Pro-Trade is our other private label brand that's more for lighting and tools and landscape supplies. Pro-Trade is seeing significant growth. You know, with private label products obviously are great in that they bring us expanded margins and, you know, they allow us to kind of grow and take real share. We are quite happy with the progress on private label, and we're gonna continue to push that going forward. Okay, great. Thank you. Thank you. Our next question comes from the line of Mike Dahl with RBC Capital Markets. Please proceed with your question. Hey, thanks for taking my questions. Also, just a couple of cleanup ones. First, with respect to the DC, can you just give us any more detail on how to think about the financial impact, whether it's on costs with the ramp or you know, any associated top line benefit? Just how should we be thinking about that over the next couple of quarters? Yeah, I'll touch on it. I mean, you know, essentially, you know, we're adding a DC in Dallas. It's a larger DC. It's about 340,000 sq ft. We're also expanding our distribution center in Georgia. We're adding 130,000 sq ft to that. If you take our overall, you know, what we had prior, which was about 600,000 sq ft of space, you know, we're now creating significant capacity for the future. You know, we lease the facilities, and we have a third-party operator of the DC, so the ramp cost is pretty reasonable. We'll spend about $2.5 million in Dallas and about $1.5 million in Fairburn, Georgia, you know, with that expansion. That really, you know, goes some of that's capital, and then some of that goes into the kind of gross margin cost of goods. You know, when we're managing the DC, those costs would go into the ultimate product costs and be more of an effect on gross margin. You know, we expect the Dallas DC to ramp up nicely this year and be a, you know, contributor in 2022 to our overall success. John, anything? Two additional things. We'll give more guidance at the end of the quarter for next year's numbers. It's not a significant contributor to either expense or our gross profit. You probably see maybe $2 million of additional capital this year. But really kind of the justification of why we're doing it, we've gotten now significant enough size where historically kind of the Texas market, a lot of that product actually is coming from the West Coast. So if you will, you think, it comes from, you know, let's say California, it shipped all the way across to Atlanta, and then we have to ship it back to Texas. We've now got sufficient volume with our growth as a company where instead of shipping it back, we will actually achieve freight savings by shipping it to the Dallas market directly. In addition, you know, this is kind of as Doug Black has inventory and stocking, it'll just enable us overall to be able to service those markets better, quicker. We'll be able to get product to market faster. We're just real excited about kind of now that we've grown large enough to kind of justify the additional costs, the benefits that we'll see going forward. Okay. Yeah, that's great. Very helpful. My second question is just one more back on the 4Q guide when you talked about kind of the healthy embedded daily growth, but some of the dynamics continuing in terms of price versus volume. Any further quantification you could give us on how to think about volume? I guess if it was flat in the quarter in 3Q or flattish, is it, you know, flat again on a daily basis in 4Q, or are you embedding actual declines off the tougher comp? We would expect similar performance. I mean, volume, we will lose a week of sales, so that will impact volume and sales in general. The exact split between price and volume through October is very similar to what we saw in Q3. Got it. I guess the one thing that we're to look at is December was especially warm last year. Even in northern markets, the business continued on. We're not certain. You know, when the winter shutdown comes, if you will, that could cause some quite a bit of variability with regards to sales in the fourth quarter. So that, I guess that would be the other call-out with regards to our fourth quarter. Right. All right. Okay. Got it. Thanks, John. Doug? Thank you. Thank you. Our next question comes from the line of Jeff Stevenson with Loop Capital Markets. Please proceed with your question. Hi. Thanks for taking my questions, and congrats on the strong quarter. My first question was just on the M&A environment. The pipeline continues to sound strong, but the pace of acquisitions is a little slower than we've seen from you guys in the past. Is this primarily a timing issue? Is there anything else we should take note of? Yeah, Jeff, it's exactly a timing issue. As we noted, the pipeline is very full, and you know, we don't see anything structurally within the markets that would cause us to believe anything different in terms of our ongoing ability to acquire companies. We still feel very confident about that. Okay, great. Just a quick question on DIY versus professional. Have you seen DIY demand kind of moderate back to kind of closer to normalized levels as shelter and place benefits have decelerated here this year? I wouldn't say it's gone back. It's still at an elevated rate. What we have seen, though, is kind of last year was really hot, if you will. What we've seen is a stronger recovery this year of the professional contractor. Last year, I would say it was more heavily weighted to the small customers and the DIY. This year, our growth on a relative basis is probably what we're seeing is our target customer, the professional contractor, is really in a strong position right now. Very helpful. Thanks, guys. Thank you. Thank you. Our next question comes from the line of Damian Karas with UBS. Please proceed with your question. Hey, good morning, guys. Congrats on the solid execution. Thanks, Damian. Obviously, first thing, obviously, you've covered a lot of ground. Just a follow-up question on the organic daily sales growth being driven by kind of mid-teens price and more flattish volumes. I'm just wondering if you get the sense that some of this price inflation is starting to have an impact on incremental demand. Or do you just think that the industry is kind of maxed out now in terms of capacity? Yeah, it's more the latter. You know, the labor constraint is still very real. You know, you read about it every day in the news. Our contractors are really struggling to keep their crews full and to hire new associates. What you see is that they still have very strong backlogs, but you know have a challenging time getting to them. We really feel that's the constraint. You know, price inflation is high, but you have to keep in mind that when you look at it, a landscaping project, the majority of that is labor. You know, the material cost ranges from 10%-20% of that overall job. You know, labor and equipment and other costs are gonna be more drivers. Now, there has been labor inflation for our customers, and they're passing that through to the end user. We really haven't perceived a fall off or a negative effect on demand. You know, there's always a limit to everything, right? We're keeping an eye on that. So far, the demand seems to be very robust for our customers. They're just having a hard time getting to it at this point. Got it. You did mention the backlog carrying over into 2022. Just curious if you could offer any more visibility into that, whether through the spring or possibly even, you know, kind of through all of 2022. How much visibility do you have into that project backlog? Yeah, no, we, you know, we would rather wait until, you know, we report our final results to talk specifically about 2022. Suffice to say, we, our customers are busy and they have good backlogs. If we, you know, certainly we'd be optimistic at this point about about next year based on what we see. You know, we'll get into more specifics when we report our fourth quarter and we've got better visibility. Understood. Appreciate the color. Thanks, guys. Great. Thank you. Thank you. Ladies and gentlemen, this concludes our question and answer session. I'll turn the floor back to Mr. Black for any final comments. Well, thank you again for joining us today. We appreciate everybody's interest in SiteOne. As you can tell, we're excited about our long-term growth and performance ability of the company. We appreciate your interest. We hope you all have a safe and happy holiday season, and we look forward to speaking to you again in February with our fourth quarter and full year report. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.