Greetings, and welcome to the SiteOne Landscape Supply, Inc. Fourth Quarter and Full Year 2016 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Pascal Convers, Executive Vice President of Strategy, Development and Investor Relations for SiteOne. Thank you. You may begin.

Thank you. Good morning, everyone. We issued our earnings press release this morning and posted a slide presentation to the Investor Relations portion of our website at investors.siteone.com. We will be referencing these slides during this call. I'm joined today by Doug Black, our Chief Executive Officer; and John Guthrie, our Chief Financial Officer. Before we begin, I would like to remind everyone that during this call, SiteOne management may make certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about future expectations, anticipation, beliefs, estimates, forecasts, plans and prospects. Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Such risks and other factors are set forth in the company's earnings release posted on the website and provided in our Form 10-K for the fiscal year ended January 1, 2017, as filed with the Securities and Exchange Commission. The company does not undertake any duty to update such forward-looking statements. Additionally, during today's call, the company will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of adjusted EBITDA to net income calculated under GAAP and other non-GAAP measures can be found in our earnings release, which is posted on the website and in our Form 10-K, which we filed with the SEC today. I would now like to turn the call over to our CEO, Doug Black.

Thank you, Pascal. Good morning, and thank you for taking the time to join us today. We had a very good year in 2016 during our first year as a public company, and we look forward to sharing our progress with you. Before I cover our 2016 results, I would like to start today's call with a reflection on our unique market position, our strategy to deliver superior long-term performance and growth and our progress during the last 3 years. In this context, I will cover our specific 2016 results. John Guthrie will then walk you through our fourth quarter and full year financial results in more detail. Pascal Convers will provide an update on our acquisition strategy. And finally, I will come back to provide comments on our guidance and outlook before taking your questions. Slide 3 of the earnings presentation shows an overview of SiteOne and our industry. As a reminder, we are the largest and only national wholesale distributor of landscaping supplies in this $17 billion highly fragmented market. We believe that we are over 4x larger than our next competitor and larger than #2 through #10 combined, yet we only have 10% market share. Importantly, we are the only distributor of scale who provides the full range of products and services that professional landscape contractors and maintainers need. Lastly, our market has approximately 3,000 manufacturing suppliers trying to reach almost 0.5 million customers. So the market lends itself to a strong world-class wholesale distributor to connect them. In turning to Slide 4, our strategy combines the scale, resources and capabilities of a large world-class company with the passion, deep knowledge and entrepreneurialism of our local teams in order to deliver superior value to our customers and suppliers. We do this across the full range of products…

Thanks, Doug. Before I begin, I wanted to highlight a new table in the press release and 10-K that reconciles net sales, organic sales and a new metric, organic daily sales, which we define as organic sales divided by the number of selling days in the relevant reporting period. We find that metric useful and plan on using it to help explain sales trends going forward. Now turning to Slide 7 for our fourth quarter and full year 2016 results. We reported a net sales increase of 6% to $362 million in the fourth quarter compared to $340 million in the fourth quarter of the prior fiscal year. Net sales for the fiscal year 2016 increased by 14% to $1.65 billion compared to $1.45 billion for fiscal 2015. We had 61 selling days in the fourth quarter of 2016 compared to 65 selling days in the fourth quarter of 2015. Organic sales declined by 3% for the quarter, but organic daily sales increased 3%. For the year, organic sales increased 3% and organic daily sales, reflecting 3 less selling days, increased 4%. In both the fourth quarter and for the year, we saw strength in our irrigation, hardscapes, nursery, lighting and landscape accessory products, reflecting continued strong growth in both the new construction and repair and remodel end markets. Organic daily sales for these products grew 8% for the quarter and 7% for the year. Nursery sales, which we called out last quarter as being weaker than the other product lines, saw a nice recovery, experiencing 7% organic daily sales growth for the quarter and 5% for the year. Organic daily sales for agronomic products, like fertilizer and control products, declined by 3% for the quarter and were flat for the year. Over the course of both the quarter and…

Thank you, John. As many of you know, acquisitions play a key role within our overall growth strategy. As shown on Slide 10, we have now acquired 18 companies since the beginning of 2014 that added 112 branches to SiteOne and contributed $500 million in sales on a trailing 12-month basis. We've made good progress accelerating our pace of acquisitions from 4 in 2015 to 6 in 2016, and now 4 more through the first 2.5 months of 2017. It is important to note that many of these acquisitions have been fully integrated into the SiteOne organization and are delivering clear value as we realize our planned synergies. We continue to see a significant opportunity to grow profitably through acquisitions, which allows our company to move into new markets, expand our presence in existing ones, broaden our product offering and also, very importantly, add outstanding talent to our team. The company will acquire leaders in their own right and they all have a recipe for winning in the local marketplace. At SiteOne, we spend a lot of time and energy to understand our acquisitions' secret sauce and also share our best practices so that we become stronger together and ultimately continue to better serve our customers and suppliers. We talked on our last call about the acquisition of Loma Vista Nursery, which has 2 landscape distribution centers in the Kansas City market with a focus on nursery products and hardscapes. Loma Vista establishes SiteOne as the #1 supplier of nursery products in the Kansas City market and enables SiteOne to offer a full suite of products to our Kansas City customers. Now as we turn to Slide 11, you can see some details on our acquisition of East Haven in December of last year, which strengthens our #1 nursery position…

Thanks, Pascal. Overall, we are pleased with our fourth quarter and full year 2016 results and excited about the momentum that we carry into 2017. We see continued positive underlying market trends with good growth in residential and commercial construction, solid demand in repair and remodel and steady demand in maintenance. All in all, our customers' backlogs are strong and we anticipate market growth this year to be comparable with what we saw in 2016. I would remind you that our busy season during the spring falls into both the first and second quarters. In many parts of the country, the spring application season typically starts in the third and fourth weeks of March. Last year, the season started much earlier in March than normal, and when combined with a very strong growth in January and February, resulted in 23% organic sales growth for the first quarter of 2016. This was balanced with a negative 2% organic growth in the second quarter, which resulted in 7% organic sales growth for the first half of 2016. Although we are off to a good start in January and February, which are traditionally slower months, we do not see the season starting early this year and therefore do not expect our organic sales growth in the first quarter to be positive against a very difficult comparison. We do expect strong growth in the second quarter to balance out the first quarter. Again, though it's hard to predict quarter-to-quarter swings, which can be impacted by weather, we anticipate healthy overall market growth for the year. Building off of this market growth, our sales force performance and marketing initiatives are gaining momentum and are expected to accelerate market share gains for SiteOne in 2017. We expect continued gross margin expansion though at a more moderate rate as compared to 2016. We also expect to achieve modest SG&A leverage in 2017 with our functional team build now completed, though we are still investing significantly in important initiatives for the future, such as in e-commerce. Lastly, as Pascal has stated, our acquisition program is gaining momentum and we expect to acquire more companies during the rest of the year. Overall, we are confident that we can deliver another year of excellent performance and growth. And for the full year 2017, we expect adjusted EBITDA to be in the range of $155 million to $165 million. In closing, I would like to acknowledge all of the SiteOne associates who have worked tirelessly serving our customers and who have made us successful to this point. We have a tremendous team, and it is a true honor to be joined with them as we build a company of excellence for all of our stakeholders. Operator, please open the lines for your questions.

[Operator Instructions] Our first question comes from the line of Bob Wetenhall with RBC Capital Markets.

Congratulations on a fantastic first year, and thanks for all the detailed information. Doug, I was hoping you could talk a little bit about year-to-date performance. You mentioned the challenging comparison in the first quarter. I was hoping you could give a little color how you see things unfolding in the first half of the year. I noted your commentary about a later start to spring planting season. And I was hoping you could provide a little view on your thinking about kind of the pace and cadence of demand year-to-date and what you're seeing in terms of pricing initiatives across the portfolio.

Okay, great, Bob. And thank you for the compliment on the year. Yes, in terms of what we've seen year-to-date, we're pleased with how the year has unfolded so far. Obviously, we're early in the year. January and February were good months, positive for us on difficult comps from last year. We're seeing very strong markets in the South, strong markets in the North. We have been inhibited in the West by the rain. I think you guys are aware of that. But all in all, the demand in the West is quite robust. And we think when the rains subside, we'll have good demand out there. So we like what we're seeing. I made the comment about the season. The season makes a big difference. Just to give you a feel, the difference in daily sales between a traditional March, early March month and a late March season-breaking month is $1 million to $2 million in sales a day. So it's a significant difference. And of course, last year, the season broke early in March and the whole month was busy. This year, we're seeing a more traditional March, where you can see that -- the weather that we're having this week. And we feel like once that's over, the normal season will break and we'll see the growth. But it's going to spill more into April versus March. So fundamentally, we see a strong underlying market. We're pleased with where we're at today. The season will dictate whether the sales in the next 30 days fall into the first quarter or second quarter, but we're pleased. In terms of pricing, it's early in the year. Manufacturers are pushing through price increases. We're -- it's early to tell kind of where inflation is going to go, but the fundamentals are there. We have a very strong pricing team and kind of we're right on top of all the trends in the market. So we feel good overall in what we're going to be able to do this year in terms of being competitive for our customers but also making sure that we drive prices responsibly in the marketplace.

Does that hold true as well for the fertilizer category?

Yes, fertilizer, where -- as you know, there were deflationary pressures last year. We ended up flat to slightly up in fertilizer prices. So we managed that well. Going into this year, there's still -- we're seeing costs that are stabilized. There could be additional price deflation. But we'll manage that and work our way through the year. So we're okay in terms of fertilizer. John, do you want to comment on that?

Yes, I think this first quarter, you'll see some -- a little year-over-year deflation on fertilizer. But then I think with -- the downward trend is pretty much stabilized. So there's a little bit of a negative trend in Q1, but that will flatten out over the course of the year.

Got it. And you guys have talked repeatedly and very consistently about being in the early innings of achieving operational and commercial excellence. And some of the levers you've highlighted have included category management, pricing, supply chain improvements, sales force performance and marketing. Those seem like the big 5 levers you're pulling on to drive the sizable amount of margin expansion you're anticipating. Can you tell us, as we think about profitability in 2017, which will be the most predominant levers that will make the greatest contribution to EBITDA growth?

Sure. So in taking the 5, and we start with category. Category, we feel like we're about half through with what we can do there. The early parts were just making better deals with our suppliers, syncing up with our preferred suppliers, and then trimming some of the suppliers that weren't preferred. We're now into reducing our number of SKUs. We're consolidating volume and moving that to preferred suppliers. And so we're halfway into the opportunity. We've got good line of sight in 2017 for more progress there. Pricing is, I'd say, 60% to 70% along in terms of what we're doing there. So pricing will not contribute as much this year as it has in years past. Supply chain is early on, and so supply chain has really contributed very little in '15 or '16. We're going to see that come on in '17 with some good contribution. And then in '18, we expect supply chain efforts to really kick in, in terms of margin improvement. And then in terms of sales force and marketing, those are really around driving organic sales, which obviously give us leverage on SG&A. We're quite pleased with where we are this year to start the year versus last year. We've done a lot of work with our sales force. We reorganized our sales force so that we're covering our customer segments better. And we've lined up our marketing behind our sales force. We've just built our marketing team in the end of last year, but we've got some good initiatives in marketing, on social media and using our vendor co-op more effectively to go after all market segments, especially the small customer segment where we've got more firepower now in terms of sales and marketing. So that's kind of where we are. A lot left to go on supply chain, a lot left to go on sales force and marketing. And then category and pricing contributing -- still contributing over the next year or so.

Understood. And one final question, then I'll turn it over. On the M&A side, you've been incredibly active year-to-date with 18 acquisitions for $85 million. So you've roughly done half of what you spent last year in just 2 months. So it seems like a pretty torrid pace. What's the anticipated EBITDA contribution year-to-date from these acquisitions? What kind of multiples did you pay? And do you -- looking into the pipeline, do you see the pace slowing down? And just finally, where is net leverage after this? Have you been financing this off the balance sheet? How have you paid for this?

Thanks, Bob. Great questions on the M&A side. I'll start with the multiple. If you look at the multiple, it's been consistent since we started doing the acquisitions in 2014. There's really no difference, pre synergies or post synergies. So it's completely consistent. And the fact that we're public is actually giving us a little more visibility out there. I think there's more people aware on what the company's about, our team, our performance and eventually wants to join the team here. So we think it's a positive. If you look at the EBITDA contribution, I think similar to what we said over the last couple of years, it's really about the average of where we are, right? A 7% to 8% EBITDA, I think, is the right number to use for those acquisitions going forward. And of course, as we extract the synergies, be it purchasing, fixed cost, cross-selling and trying to learn about their secret sauce and sharing best practices, eventually we can ramp up the EBITDA from there. If you look at the pipeline, it's extremely healthy. We've got a few LOIs in place that we plan to close in 2017. We've got a growing number of NDAs. We've got to keep in mind that we've had an M&A team in place for only a couple of years. So it's still the very early days of the acquisition program. And when you combine that with the fact that we only have a 10% market share nationally and there's still a lot of markets -- about 75% of the markets where we are, we're missing either nursery or hardscapes or both. So there's a tremendous amount of white space, which creates that deep pipeline. And I'll add, too, also the fact that every time we make an acquisition, it leads to a few more. Bissett was a follow-on to Shemin. East Haven also was a follow-on to Shemin over there in Connecticut. So every time we do an acquisition, there's more to come. So we feel very strong about the pipeline, Bob.

Yes, with regards to the leverage, we are financing these acquisitions using our existing facilities. We had plenty of borrowing capabilities in our capital structure last year. We did a term loan and we have an ABL facility, up to $325 million. So we have plenty of capacity to execute our strategy with regards to that. With regards to leverage, leverage normally will go up in the springtime just because of a normal spring. And we'll be able to fund that through our ABL facility. But if you look at this year, we were able to do $66 million in acquisitions and still delever the company from adjusted -- from a net debt over adjusted EBITDA. And we would expect that trend to continue, primarily funding these through cash flow from operations to continue maintaining a leverage within our 2x to 3x net debt over EBITDA range.

Our next question comes from the line of David Manthey with Robert W. Baird.

So given where we are in March, and Doug, you gave us some good information there in terms of the $1 million to $2 million per day, if we do the math, and then run it out, I'm just trying to figure out what the magnitude of the ADS decline should look like in the first quarter. And if I run $1.5 million a day times 20 days last year, I'm coming up with like $30 million of incremental sales, which might be a mid-teens-type contribution. So is it safe to assume that in the first quarter, we could see a low double-digit-type decline this year?

Given our start, David, we wouldn't expect that dramatic of a decline. I think we're talking a couple of weeks here and not the full month, right? So yes, so I would kind of cut in half your math there and that's what we might get here. Obviously, the month's got to finish itself, right? So we're likely to have a good couple of weeks in ending the month. But we just don't know right now, so -- but the swing there is more 10 days than 20 normally.

Okay, all right. But then for the first half in aggregate, you should assume that's all stabilized and be at a mid-single-digit-type organic growth rate?

Exactly, that's the -- the good part is it will completely balance. With the second quarter, we're just really talking between March and April. And so it doesn't affect our growth rate. And again, last year, just to remind you, we had a 23% average with a negative 2% and we ended up at 7%. So this year, we won't be as dramatic on either ends of those spectrums because we have started well in January and February. So we had that going for us in the first quarter. But you'll see a negative in the first quarter balanced by a very, very strong positive in the second quarter for a good growth rate for the half year.

Okay, that's great. And then thinking about the cost structure today and what it looks like in 2017, are there any step function-type expenses that we should expect in 2017? When we look at the contribution margin over the last couple of years, they've been -- 12% and 14% is what we calculate. All else being equal, should we expect something in that range in 2017 as well?

Well, in terms of our EBITDA kind of leverage, normal gearing is -- for every incremental dollar, we'd normally put down about 15% to the adjusted EBITDA line. That assumes no gross margin improvement and kind of SG&A -- no SG&A build. As we go into 2017, we're going to have some annualization of the SG&A build and we will have some investments that we're making. We're investing about $4 million in e-commerce, and so we are building those capabilities, so those -- that expense is there. However, we do expect continued gross margin improvement. And we do expect with our organic growth and acquisitions that we will get a net leverage on the SG&A line. So we do feel like we'll have good expansion on our EBITDA margin. And so that will give us good operating leverage in terms of converting sales to EBITDA growth.

Our next question comes from the line of Nishu Sood with Deutsche Bank.

So going back to November when you -- when we talked about the outlook for flattish daily sales in 4Q, and then ending up, up 3%, obviously a nice surprise. Considering that 4Q is mostly driven by what happens in October, what was able to drive the daily sales positive? So what was -- what happened as the quarter progressed? And obviously, there's been some discussion already of 1Q. But did any of those factors bleed over into 1Q?

Yes, great question, Nishu. What we saw basically was we were predicting a more normal end to the construction season, which would have been late November, early December. And we did see an extension of the construction season -- not as good as 2015, but it was an extension there. And we saw a nice recovery in our nursery product line. And again, nursery had been constrained, if you remember in the third quarter, by the hot dry weather that went way into September and we had a constrained season there. With the season being extended, we saw nursery come through. And our construction products in general were just stronger. So really, that was the difference is the construction season went a little longer than we thought it was going to go. And we always talked about that the underlying growth was there. And so we saw that underlying growth come through. And particularly, we're pleased with the nursery product line, which ended up with nice growth for the quarter and 5% overall for the year, which was good.

Got it, that's helpful. Looking at the margins -- and you discussed a little bit earlier pricing and category management that are, in fact, petering out in '17, supply chain picking up. So if we think about the gross margin line first, basically flat year-over-year in 4Q '16. So how are those -- I mean, how much leverage -- if you're already getting to the stage where it's kind of flattening out and obviously off of very, very impressive gains in the last 4 or 5 quarters or so or 6 quarters really, how much impact could those have in '17? And I don't want to make too much of just 1 quarter, but it does -- since the trend is flattening out. So how should we expect those to play out?

Right, good question. We wouldn't read too much into the fourth quarter. It was a tougher comp in '15. And so -- but you're correct, we're not going to have a pace of 170 basis points, right? So we would see gross margin -- the combination of gross margin expansion and SG&A leverage will keep us on track on an EBITDA basis, down from 6% to 7% to 8% and we're heading toward 10%-plus over the next couple of years. So we feel like we'll make good progress, similar progress on the EBITDA. Some of that, a slight bit of that will be SG&A leverage, the rest will be gross margin expansion. So that's the way to think about it.

Got it. And just a final one, in the discretionary product categories, can you give us some sense now -- now that 2016 has come to a close, which of the discretionary product categories you've seen better growth in? Is that something that you continue to think, the difference on -- obviously leaving aside the agronomics, where I think you discussed that pretty well? Nursery, you mentioned towards the end of the year, obviously some of the construction season effects. But just generally, what categories have you seen more growth on and less growth on, on the discretionary side?

Right. No, that's a great question. One good measure of discretionary growth, if you will, is hardscapes, right, because hardscapes tend to be bigger-ticket remodel. Obviously, they go into new construction as well. But there are parts of redoing your back lawn and more big-ticket remodel. We saw 12% organic growth in hardscapes last year. And we don't see that slowing down. I mean, that's a good growth category. But I think it's also a barometer of consumer confidence and discretionary spend. So the hardscapes line is a good indicator that the market's healthy, confidence is up, the jobs are improving. And so that lends itself to that repair/remodel. And we're happy to be filling in across the country. By the way, in hardscapes, as we fill out our portfolio and become a full-on provider in all markets, that's a nice high-growth category to fill in. So that would be a good example. We've seen high growth -- good growth in lighting. We've seen good growth in stormwater, which is -- I don't know if that's necessarily discretionary, but that's really driven by higher standards and codes. But there's a good underlying growth in hardscapes, which is a good indicator of discretionary spend.

Our next question comes from the line of Mike Dahl with Barclays.

Just a follow-up, I guess, Doug, to partially follow up to that last response regarding hardscapes, and then also a question earlier around kind of what's embedded in the guidance. If I look at the $85 million in sales that you guys outlined for trailing 12-month contribution from the 2017 acquisitions, just want to get a little more color on how we should think about that for a go-forward number. Because clearly, with something like an AB Supply solidifying your hardscapes platform in California, it seems like there would be a really good opportunity for cross-selling. So just wondering how to think about the sales contribution and level of growth that we can expect on some of those numbers.

Yes, I'll take that. And maybe Pascal can add some color. So in acquisitions, we've given you the annual -- the trailing 12-month annual sales. When we bring acquisitions on, we get immediate synergies in terms of purchasing that go right in. The cross-selling, that takes kind of 18 months to get those going and the acquisition has to get settled. We get them onboard, we get them integrated on our system, we get the purchasing synergies. And then we start to work on cross-selling and fixed overhead types of synergies. So you would expect that the trailing annual sales to be kind of what gets contributed, prorated for the stub year in which we buy them. But really, in years 2 and 3, we would start to see that increase sales. In terms of AB Supply specifically, they bring a great expertise to the West that we would hope will provide a little more immediate benefits to our teams in the West because they can quite frankly teach us really how to sell hardscapes out there in those markets. But normally, it takes a while before we get the cross-selling synergies to come in. Pascal, do you want to add anything to that?

No, I think you covered it very well. I mean, the only thing to say is, of course, hardscape grows a little bit faster, Mike, than, let's say, the chemicals, right? So naturally, the forward growth of sales for the company will be higher than if you acquire a company which is involved in agronomics. And as Doug said, we think they're going to contribute to a growth of existing hardscapes. And also Phil Dole [ph] and his team have been really terrific at adding a few acquisitions to the company. So we think it's going to be a nice platform. But it takes a while before we identify the right target and we bring that onboard, could be several months, it could be a couple of years. But there will probably be some inorganic growth coming from AB Supply as well.

Got it, that's helpful. And then I guess when you look at your -- some of the LOIs that you have out and the other discussions that are taking place in the overall pipeline, can you give us an update on just relative size of the opportunities and not the overall pie, but just how many targets are similar to or larger than an AB Supply or how many are just kind of the 1 to 2 locations, and specifically those that are most likely to close in 2017.

Yes, good question, Mike. It's a combination really. I think the average size of $25 million in revenue is still very relevant, right? You'll have a few smaller, like an East Haven, right, 1 location, less than $10 million in revenues. And then you'll have AB Supply, which is a little bit larger, we see 12 locations. Shemin, that happened in 2015, clearly was on the very high end. It was #4 in the industry, right? So we've got a bit of both for 2017 as far as LOIs. But I think the average of 25 is still good out there. You still have to take them to the finish line. But we feel the number is growing. So we can kind of pick and choose what are the right fit for us in 2017. We feel pretty optimistic.

Okay. And then last one for me just since this new metric is going to be something that you focus on going forward in terms of the daily sales growth, can you just give us what the selling days will be each quarter in 2017 just so we have a good comparison to model off of?

Sure. I know in the very first quarter, it's going to be -- we lose 1 day. So it will be 64 selling days in there and it's 252 days for the year. Let me pull up Q2, 3 and 4, and I'll -- I can provide that.

Our next question comes from the line -- I'm sorry. [Operator Instructions] Our next question comes from the line of Ryan Merkel with William Blair.

So we've covered a lot of ground. But just at a high level for modeling purposes, it sounds like you're expecting 4% to 6% organic daily growth. And that's weighted a little more to the second half versus the first half. Is that fair?

Ryan, I think we wouldn't give specific estimates. But certainly, that's ballpark. And in terms of weighted first half or second half, we would tend to think that the second half would be a bit stronger than the first half. That's correct.

Okay. And then at a high level by product category in terms of the outlook, can you just give us a sense of what you're thinking? And if you want to keep the answer to just construction products and agronomics, I think that's fine.

Yes. Well, agronomics tend to be GDP-level growth, right? And that's obviously depending on inflation. Given what we see today, it might be a bit lower than that, right, with the pricing constrained. In terms of construction products, those tend to run with construction and be up in the high single digits. And we wouldn't see any change there, so we -- that would be the flavor of the 2 categories.

So it's looking pretty similar to what you saw in 2016 for the most part.

Yes, we're calling it similar. As you know, in 2016, we had very volatile weather. Who knows if this will be more or less? But it was pretty volatile last year, so we wouldn't expect it to be worse this year. And then inflation overall, we came in at 1%. We're normally at 2% kind of the market. Again, we don't know whether this will be better or worse. But 1% would have been on the lower end in '16 of what we normally see. So yes, we're calling it a similar market. And those are the 2 flex points that could move around on us.

Got it. And then just lastly, I think this was asked earlier, but I just wanted to clarify. It looks to me that M&A will probably add about $10 million, $11 million to EBITDA in 2017 that's already completed M&A. Is that about right?

I would be more conservative than that, right? If you look at the $85 million and you put the percentage that we mentioned, right, 7% to 8%, that's a lower number. And then for the first quarter, keep in mind that although they bring revenues, right, that's kind of the slow season, right, especially companies in the North, like Aspen Valley and Angelo's and East Haven. So EBITDA-wise, that can be slightly negative first quarter. But I think for the full year, your number is too high, right? You put a percentage of 7% to 8% on $85 million, you don't get the number.

Well, I was thinking there was carryover from last year...

Carryover from last year. Carryover from last year, I don't have the math for you. We'll get back to you on that one, right, John? I don't know if you have a quick number, but yes, if you do carry over 2016 plus 2017, you're probably there, yes. John, do you have the number? We'll get back to you offline on that one.

Yes, that would be great. I think roughly what you're guiding to is double-digit organic EBITDA growth is really what I'm getting at, which is pretty healthy and pretty encouraging.

Yes.

Just to follow up on Dave's question, it's 64, 63, 64 for Q3 and 61 for Q4. So 252 days next year. From a modeling perspective, we lose 1 day relative. We had 253 days this year.

This concludes our question-and-answer session. I'd like to now turn the floor back to management for any final remarks.

Okay, thank you. Yes, again, thanks for everyone for joining us today. We very much appreciate the questions and we appreciate your interest in SiteOne. We're very pleased with our performance and we're excited about our longer-term growth and profitability potential for our company going forward. Thank you.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.