Beacon Reports Fourth Quarter and Full Year 2023 Results
- Record fourth quarter and full year net sales, strong net income, and highest Adjusted EBITDA in history.
- Year-over-year net sales growth for the last 12 quarters showcasing business model resilience.
- Acquisition of 21 branches and opening of 28 greenfield locations in key markets in 2023.
- Significant capital returned to shareholders with over $800 million in repurchases and highest capex in company history.
- Net sales increased by 16.8% in the fourth quarter and 8.2% for the full year compared to the prior year.
- Residential roofing product sales increased by 20.2% in the fourth quarter and 10.3% for the full year.
- Non-residential roofing product sales increased by 11.4% in the fourth quarter and decreased by 2.7% for the full year.
- Complementary product sales increased by 16.0% in the fourth quarter and 18.6% for the full year.
- Adjusted EBITDA margin reached 10.2% for the full year, showing strong operational performance.
- The company repurchased all outstanding preferred shares and significant common shares, enhancing shareholder value.
- None.
Insights
The financial results of Beacon indicate a robust performance with record net sales growth for the fourth quarter and full year, which is a positive signal for investors and stakeholders. The company's strategic initiatives under Ambition 2025, such as greenfield investments and mergers and acquisitions (M&A), have contributed significantly to this growth. The strong net income margin and double-digit Adjusted EBITDA margin for the third consecutive year underscore the company's effective pricing execution and productivity enhancements.
From a financial perspective, the repurchase of preferred shares and common stock is indicative of management's confidence in the company's financial health and future prospects. This action also reflects a shareholder-friendly capital allocation policy, which can be attractive to investors seeking companies with a track record of returning capital. However, the repurchase of preferred stock at a premium resulted in a negative diluted EPS for the year, which is an important consideration for evaluating the company's earnings performance.
Beacon's balance sheet strength, as evidenced by a net debt leverage of 2.4 times, suggests a disciplined approach to debt management. This financial stability, combined with substantial cash flow generation, positions the company well for continued investment in growth initiatives and further capital returns to shareholders.
Beacon's performance in the building materials sector reflects an ability to capitalize on market demand, particularly in residential roofing products, which saw a significant increase in sales. The strategic expansion through the acquisition of 21 branches and the opening of 28 greenfield locations is a testament to the company's commitment to increasing its market presence and customer reach. This kind of aggressive expansion strategy can be a double-edged sword, potentially leading to market saturation or integration challenges, but so far, it appears to have been managed effectively by Beacon.
The decrease in gross margin percentage points to increased product costs, which could be a concern if the trend continues and the company is unable to pass these costs onto customers. However, the company's ability to manage operating expenses, as evidenced by the decrease in operating expense as a percent of net sales, has helped mitigate the impact on profitability.
Overall, Beacon's market positioning in a growing industry, combined with its strategic growth initiatives and cost management, suggests a strong potential for sustained growth. However, external factors such as material costs and market demand fluctuations remain critical variables that could affect future performance.
Beacon's financial results provide insights into broader economic trends, such as the state of the construction industry and consumer spending on home improvement. The company's sustained growth in net sales and the increase in residential roofing product sales align with a robust housing market and potentially increased renovation activities. Despite the decrease in non-residential roofing product sales, the overall positive performance suggests resilience in the face of economic headwinds.
The company's ability to manage inflationary pressures, as indicated by the increase in operating expenses due to wage inflation and higher product costs, reflects a broader economic challenge of cost management during periods of inflation. The company's pricing strategy and operational efficiency have been crucial in maintaining profitability in this environment.
Additionally, the strategic deployment of capital in share repurchases and investments in growth, while maintaining a strong balance sheet, indicates a favorable economic position for Beacon. This balance of growth and shareholder returns is particularly significant in an economic climate where investors may be more cautious and seeking companies with strong financial discipline.
- Record fourth quarter and full year net sales, strong net income, and highest Adjusted EBITDA in history
- Ambition 2025 execution continued to generate growth with significant contributions from enhanced sales capabilities, greenfield investments, and M&A
- Strong net income margin and double-digit Adjusted EBITDA margin for the third consecutive full year driven by diligent pricing execution, productivity, and improvements from the bottom quintile branch initiative
- Record full year cash flow enabled investment in growth initiatives and returns to shareholders while maintaining balance sheet strength
“Our 2023 results demonstrate that our Ambition 2025 strategy has multiple paths to growth and can deliver results in a variety of conditions,” said Julian Francis, Beacon’s President & CEO. “We delivered record fourth quarter and full year sales, strong net income, and our highest Adjusted EBITDA in history. We have reported year-over-year net sales growth for the last 12 quarters highlighting the resiliency of our business model and the necessity of our products. We remained focused on those items within our control, including pricing, operating efficiency, and working capital management. Our ability to generate substantial cash flow allowed us to re-invest in future growth. In 2023, we acquired 21 branches and opened 28 greenfield locations in key markets enhancing our customer reach and service. We also enhanced our sales capabilities by adding to our organizational leadership positions and expanding our sales training program. During the year, we also returned a significant amount of capital to shareholders. We deployed more than
Fourth Quarter and Full Year Financial Highlights
|
Three Months Ended December 31, |
|
Year Ended December 31, |
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|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
(Unaudited; $ in millions, except per share amounts) |
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
2,299.5 |
|
|
$ |
1,969.4 |
|
|
$ |
9,119.8 |
|
|
$ |
8,429.7 |
|
Gross profit |
$ |
592.0 |
|
|
$ |
515.6 |
|
|
$ |
2,342.7 |
|
|
$ |
2,235.5 |
|
Gross margin % |
|
25.7 |
% |
|
|
26.2 |
% |
|
|
25.7 |
% |
|
|
26.5 |
% |
|
|
|
|
|
|
|
|
||||||||
Operating expense |
$ |
428.5 |
|
|
$ |
389.3 |
|
|
$ |
1,630.5 |
|
|
$ |
1,532.1 |
|
% of net sales |
|
18.6 |
% |
|
|
19.8 |
% |
|
|
17.9 |
% |
|
|
18.2 |
% |
Adjusted Operating Expense1 |
$ |
408.5 |
|
|
$ |
364.3 |
|
|
$ |
1,538.1 |
|
|
$ |
1,430.8 |
|
% of net sales1 |
|
17.8 |
% |
|
|
18.5 |
% |
|
|
16.9 |
% |
|
|
17.0 |
% |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
95.1 |
|
|
$ |
73.3 |
|
|
$ |
435.0 |
|
|
$ |
458.4 |
|
% of net sales |
|
4.1 |
% |
|
|
3.7 |
% |
|
|
4.8 |
% |
|
|
5.4 |
% |
Adjusted Net Income (Loss)1 |
$ |
111.2 |
|
|
$ |
93.2 |
|
|
$ |
507.9 |
|
|
$ |
537.9 |
|
% of net sales1 |
|
4.8 |
% |
|
|
4.7 |
% |
|
|
5.6 |
% |
|
|
6.4 |
% |
Adjusted EBITDA1 |
$ |
216.7 |
|
|
$ |
178.5 |
|
|
$ |
929.6 |
|
|
$ |
910.0 |
|
% of net sales1 |
|
9.4 |
% |
|
|
9.1 |
% |
|
|
10.2 |
% |
|
|
10.8 |
% |
| _____________ | |||||||||||||||
1. Please see the included financial tables for a reconciliation of “Adjusted” non-GAAP financial measures to the most directly comparable GAAP financial measure, as well as further detail on the components driving the net changes over the comparative periods. |
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Fourth Quarter
Net sales increased
Residential roofing product sales increased
Gross margin decreased to
Net income (loss) was
In February 2023, Beacon announced an increase in its share repurchase program, pursuant to which the Company may purchase up to
Year ended December 31, 2023
Net sales increased
Residential roofing product sales increased
Gross margin decreased to
In July 2023, the Company repurchased all 400,000 issued and outstanding shares of its preferred stock from an affiliate of Clayton, Dubilier & Rice, LLC for
Net income (loss) was
In 2023, the Company repurchased and retired
To calculate approximate weighted average selling price and product cost changes, we review organic
During the fourth quarter of 2023, we revised our definition of when a branch classification changes from acquired to existing. Previously, the results of operations of branches were designated as acquired until they had been under our ownership for at least four full fiscal quarters at the start of the fiscal reporting period, after which such branches were classified as existing. Under our new definition, the results of operations of branches will be designated as acquired until they have been under our ownership and have contributed to our results of operations for at least 12 calendar months (inclusive of partial month activity), after which such branches are classified as existing. The effect of this change in definition is that the prior year results of operations for branches will be reclassified to existing when the comparable current month’s financial results are also classified as existing.
Please see the included financial tables for a reconciliation of “Adjusted” non-GAAP financial measures to the most directly comparable GAAP financial measure, as well as further detail on the components driving the net changes over the comparative periods.
Earnings Call
The Company will host a conference call and webcast today at 5:00 p.m. ET to discuss these results. Details for the earnings release event are as follows:
What: |
Beacon Fourth Quarter and Full Year 2023 Earnings Call |
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When: |
Tuesday, February 27, 2024 |
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Time: |
5:00 p.m. ET |
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Access: |
Register for the conference call or webcast by visiting: |
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Upon registration, participants will receive an email containing event details and unique access codes. To ensure timely access, participants should register for the earnings call at least 10 minutes before the 5:00 p.m. ET start time. An archived copy of the webcast will be available on the Events & Presentations page shortly after the call.
Forward-Looking Statements
This release contains information about management’s view of the Company’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “believe,” “will likely result,” “outlook,” “project” and other words and expressions of similar meaning. Investors are cautioned not to place undue reliance on forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but not limited to, those set forth in the "Risk Factors" section of the Company’s Form 10-K for the fiscal year ended December 31, 2022 and subsequent filings with the
About Beacon
Founded in 1928, Beacon is a Fortune 500, publicly traded distributor of building products, including roofing materials and complementary products, such as siding and waterproofing. The Company operates over 530 branches throughout all 50 states in the
BEACON ROOFING SUPPLY, INC. |
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Consolidated Statements of Operations |
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(In millions, except per share amounts) |
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|
Three Months Ended December 31, |
|
Year Ended December 31, |
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|
|
2023 |
|
% of Net Sales |
|
|
2022 |
|
|
% of Net Sales |
|
|
2023 |
|
|
% of Net Sales |
|
|
2022 |
|
|
% of Net Sales |
||||
|
(Unaudited) |
|
|
|
|
|
|
|
|
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Net sales |
$ |
2,299.5 |
|
100.0 |
% |
|
$ |
1,969.4 |
|
|
100.0 |
% |
|
$ |
9,119.8 |
|
|
100.0 |
% |
|
$ |
8,429.7 |
|
|
100.0 |
% |
Cost of products sold |
|
1,707.5 |
|
74.3 |
% |
|
|
1,453.8 |
|
|
73.8 |
% |
|
|
6,777.1 |
|
|
74.3 |
% |
|
|
6,194.2 |
|
|
73.5 |
% |
Gross profit |
|
592.0 |
|
25.7 |
% |
|
|
515.6 |
|
|
26.2 |
% |
|
|
2,342.7 |
|
|
25.7 |
% |
|
|
2,235.5 |
|
|
26.5 |
% |
Operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Selling, general and administrative |
|
383.0 |
|
16.7 |
% |
|
|
350.3 |
|
|
17.8 |
% |
|
|
1,454.3 |
|
|
15.9 |
% |
|
|
1,372.9 |
|
|
16.3 |
% |
Depreciation |
|
25.6 |
|
1.0 |
% |
|
|
19.7 |
|
|
1.0 |
% |
|
|
91.2 |
|
|
1.1 |
% |
|
|
75.1 |
|
|
0.9 |
% |
Amortization |
|
19.9 |
|
0.9 |
% |
|
|
19.3 |
|
|
1.0 |
% |
|
|
85.0 |
|
|
0.9 |
% |
|
|
84.1 |
|
|
1.0 |
% |
Total operating expense |
|
428.5 |
|
18.6 |
% |
|
|
389.3 |
|
|
19.8 |
% |
|
|
1,630.5 |
|
|
17.9 |
% |
|
|
1,532.1 |
|
|
18.2 |
% |
Income (loss) from operations |
|
163.5 |
|
7.1 |
% |
|
|
126.3 |
|
|
6.4 |
% |
|
|
712.2 |
|
|
7.8 |
% |
|
|
703.4 |
|
|
8.3 |
% |
Interest expense, financing costs and other |
|
37.1 |
|
1.6 |
% |
|
|
25.4 |
|
|
1.3 |
% |
|
|
126.1 |
|
|
1.4 |
% |
|
|
83.7 |
|
|
1.0 |
% |
Income (loss) before income taxes |
|
126.4 |
|
5.5 |
% |
|
|
100.9 |
|
|
5.1 |
% |
|
|
586.1 |
|
|
6.4 |
% |
|
|
619.7 |
|
|
7.3 |
% |
Provision for (benefit from) income taxes |
|
31.3 |
|
1.4 |
% |
|
|
27.6 |
|
|
1.4 |
% |
|
|
151.1 |
|
|
1.6 |
% |
|
|
161.3 |
|
|
1.9 |
% |
Net income (loss) |
|
95.1 |
|
4.1 |
% |
|
|
73.3 |
|
|
3.7 |
% |
|
|
435.0 |
|
|
4.8 |
% |
|
|
458.4 |
|
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of net income (loss) to net income (loss) attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) |
$ |
95.1 |
|
4.1 |
% |
|
$ |
73.3 |
|
|
3.7 |
% |
|
$ |
435.0 |
|
|
4.8 |
% |
|
$ |
458.4 |
|
|
5.4 |
% |
Dividends on Preferred Stock |
|
— |
|
— |
% |
|
|
(6.0 |
) |
|
(0.3 |
) % |
|
|
(13.9 |
) |
|
(0.2 |
) % |
|
|
(24.0 |
) |
|
(0.3 |
) % |
Undistributed income allocated to participating securities |
|
— |
|
— |
% |
|
|
(8.7 |
) |
|
(0.4 |
) % |
|
|
(34.1 |
) |
|
(0.4 |
) % |
|
|
(54.8 |
) |
|
(0.7 |
) % |
Repurchase Premium |
|
— |
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
(414.6 |
) |
|
(4.5 |
) % |
|
|
— |
|
|
— |
% |
Net income (loss) attributable to common stockholders |
$ |
95.1 |
|
4.1 |
% |
|
$ |
58.6 |
|
|
3.0 |
% |
|
$ |
(27.6 |
) |
|
(0.3 |
) % |
|
$ |
379.6 |
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Weighted-average common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic |
|
63.4 |
|
|
|
|
65.1 |
|
|
|
|
|
63.7 |
|
|
|
|
|
67.1 |
|
|
|
||||
Diluted |
|
64.8 |
|
|
|
|
66.4 |
|
|
|
|
|
63.7 |
|
|
|
|
|
68.4 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic |
$ |
1.50 |
|
|
|
$ |
0.90 |
|
|
|
|
$ |
(0.43 |
) |
|
|
|
$ |
5.66 |
|
|
|
||||
Diluted |
$ |
1.47 |
|
|
|
$ |
0.88 |
|
|
|
|
$ |
(0.43 |
) |
|
|
|
$ |
5.55 |
|
|
|
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BEACON ROOFING SUPPLY, INC. |
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Consolidated Balance Sheets |
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(In millions) |
|||||||
|
December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
84.0 |
|
|
$ |
67.7 |
|
Accounts receivable, net |
|
1,140.2 |
|
|
|
1,009.1 |
|
Inventories, net |
|
1,227.9 |
|
|
|
1,322.9 |
|
Prepaid expenses and other current assets |
|
444.6 |
|
|
|
417.8 |
|
Total current assets |
|
2,896.7 |
|
|
|
2,817.5 |
|
Property and equipment, net |
|
436.4 |
|
|
|
337.0 |
|
Goodwill |
|
1,952.6 |
|
|
|
1,916.3 |
|
Intangibles, net |
|
403.5 |
|
|
|
447.7 |
|
Operating lease right-of-use assets, net |
|
503.6 |
|
|
|
467.6 |
|
Deferred income taxes, net |
|
2.1 |
|
|
|
9.9 |
|
Other assets, net |
|
12.8 |
|
|
|
7.5 |
|
Total assets |
$ |
6,207.7 |
|
|
$ |
6,003.5 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
942.8 |
|
|
$ |
821.0 |
|
Accrued expenses |
|
498.6 |
|
|
|
448.0 |
|
Current portion of operating lease liabilities |
|
89.7 |
|
|
|
94.5 |
|
Current portion of finance lease liabilities |
|
26.2 |
|
|
|
16.1 |
|
Current portion of long-term debt |
|
10.0 |
|
|
|
10.0 |
|
Total current liabilities |
|
1,567.3 |
|
|
|
1,389.6 |
|
Borrowings under revolving lines of credit, net |
|
80.0 |
|
|
|
254.9 |
|
Long-term debt, net |
|
2,192.3 |
|
|
|
1,606.4 |
|
Deferred income taxes, net |
|
20.1 |
|
|
|
0.2 |
|
Other long-term liabilities |
|
0.5 |
|
|
|
— |
|
Operating lease liabilities |
|
423.7 |
|
|
|
382.1 |
|
Finance lease liabilities |
|
100.3 |
|
|
|
67.0 |
|
Total liabilities |
|
4,384.2 |
|
|
|
3,700.2 |
|
|
|
|
|
||||
Convertible Preferred Stock |
|
— |
|
|
|
399.2 |
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Common stock |
|
0.6 |
|
|
|
0.6 |
|
Undesignated preferred stock |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,218.4 |
|
|
|
1,187.2 |
|
Retained earnings |
|
618.8 |
|
|
|
728.8 |
|
Accumulated other comprehensive income (loss) |
|
(14.3 |
) |
|
|
(12.5 |
) |
Total stockholders’ equity |
|
1,823.5 |
|
|
|
1,904.1 |
|
Total liabilities and stockholders’ equity |
$ |
6,207.7 |
|
|
$ |
6,003.5 |
|
BEACON ROOFING SUPPLY, INC. |
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Consolidated Statements of Cash Flows |
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(In millions) |
|||||||
|
Year Ended December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Operating Activities |
|
|
|
||||
Net income (loss) |
$ |
435.0 |
|
|
$ |
458.4 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation and amortization |
|
176.2 |
|
|
|
159.2 |
|
Stock-based compensation |
|
28.0 |
|
|
|
27.6 |
|
Certain interest expense and other financing costs |
|
2.2 |
|
|
|
5.2 |
|
Gain on sale of fixed assets and other |
|
(15.6 |
) |
|
|
(4.1 |
) |
Deferred income taxes |
|
27.3 |
|
|
|
30.1 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(104.7 |
) |
|
|
(111.4 |
) |
Inventories |
|
129.1 |
|
|
|
(117.7 |
) |
Prepaid expenses and other current assets |
|
(27.5 |
) |
|
|
(36.3 |
) |
Accounts payable and accrued expenses |
|
141.6 |
|
|
|
(15.2 |
) |
Other assets and liabilities |
|
(3.8 |
) |
|
|
5.3 |
|
Net cash provided by (used in) operating activities |
|
787.8 |
|
|
|
401.1 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Capital expenditures |
|
(122.9 |
) |
|
|
(90.1 |
) |
Acquisition of business, net |
|
(119.0 |
) |
|
|
(309.2 |
) |
Proceeds from sale of assets |
|
17.5 |
|
|
|
5.2 |
|
Purchases of investments |
|
(1.2 |
) |
|
|
(1.5 |
) |
Net cash provided by (used in) investing activities |
|
(225.6 |
) |
|
|
(395.6 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Borrowings under revolving lines of credit |
|
2,374.2 |
|
|
|
2,781.3 |
|
Payments under revolving lines of credit |
|
(2,550.7 |
) |
|
|
(2,520.6 |
) |
Payments under term loan |
|
(10.0 |
) |
|
|
(10.0 |
) |
Borrowings under senior notes |
|
600.0 |
|
|
|
— |
|
Payment of debt issuance costs |
|
(8.0 |
) |
|
|
— |
|
Payments under equipment financing facilities and finance leases |
|
(21.2 |
) |
|
|
(12.1 |
) |
Repurchase of convertible Preferred Stock |
|
(805.7 |
) |
|
|
— |
|
Repurchase and retirement of common stock, net |
|
(110.9 |
) |
|
|
(388.1 |
) |
Payment of dividends on Preferred Stock |
|
(18.9 |
) |
|
|
(24.0 |
) |
Proceeds from disgorgement of short-swing profits1 |
|
5.9 |
|
|
|
— |
|
Proceeds from issuance of common stock related to equity awards |
|
12.7 |
|
|
|
16.7 |
|
Payment of taxes related to net share settlement of equity awards |
|
(13.8 |
) |
|
|
(5.7 |
) |
Net cash provided by (used in) financing activities |
|
(546.4 |
) |
|
|
(162.5 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
0.5 |
|
|
|
(1.1 |
) |
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents |
|
16.3 |
|
|
|
(158.1 |
) |
Cash and cash equivalents, beginning of period |
|
67.7 |
|
|
|
225.8 |
|
Cash and cash equivalents, end of period |
$ |
84.0 |
|
|
$ |
67.7 |
|
|
|
|
|
||||
Supplemental Cash Flow Information |
|
|
|
||||
Cash paid during the period for: |
|
|
|
||||
Interest |
$ |
111.3 |
|
|
$ |
83.4 |
|
Income taxes, net of refunds2 |
$ |
120.6 |
|
|
$ |
157.1 |
|
| _____________ | |||||||
1. During the year ended December 31, 2023, the Company received payments of |
|||||||
2. Year ended December 31, 2022 amount includes |
|||||||
BEACON ROOFING SUPPLY, INC. |
|||||||||||||||||
Consolidated Sales by Line of Business |
|||||||||||||||||
(Unaudited; in millions) |
|||||||||||||||||
|
|||||||||||||||||
Sales by Line of Business |
|||||||||||||||||
|
Three Months Ended December 31, |
|
Year-over-Year Change |
||||||||||||||
|
2023 |
|
2022 |
|
|||||||||||||
|
Net Sales |
|
Mix % |
|
Net Sales |
|
Mix % |
|
$ |
|
% |
||||||
Residential roofing products |
$ |
1,162.8 |
|
50.6 |
% |
|
$ |
967.1 |
|
49.1 |
% |
|
$ |
195.7 |
|
20.2 |
% |
Non-residential roofing products |
|
626.7 |
|
27.2 |
% |
|
|
562.6 |
|
28.6 |
% |
|
|
64.1 |
|
11.4 |
% |
Complementary building products |
|
510.0 |
|
22.2 |
% |
|
|
439.7 |
|
22.3 |
% |
|
|
70.3 |
|
16.0 |
% |
|
$ |
2,299.5 |
|
100.0 |
% |
|
$ |
1,969.4 |
|
100.0 |
% |
|
$ |
330.1 |
|
16.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales by Business Day1,2 |
|||||||||||||||||
|
Three Months Ended December 31, |
|
Year-over-Year Change |
||||||||||||||
|
2023 |
|
2022 |
|
|||||||||||||
|
Net Sales |
|
Mix % |
|
Net Sales |
|
Mix % |
|
$ |
|
% |
||||||
Residential roofing products |
$ |
19.1 |
|
50.6 |
% |
|
$ |
15.9 |
|
49.1 |
% |
|
$ |
3.2 |
|
20.2 |
% |
Non-residential roofing products |
|
10.3 |
|
27.2 |
% |
|
|
9.2 |
|
28.6 |
% |
|
|
1.1 |
|
11.4 |
% |
Complementary building products |
|
8.3 |
|
22.2 |
% |
|
|
7.2 |
|
22.3 |
% |
|
|
1.1 |
|
16.0 |
% |
|
$ |
37.7 |
|
100.0 |
% |
|
$ |
32.3 |
|
100.0 |
% |
|
$ |
5.4 |
|
16.8 |
% |
| _____________ | |||||||||||||||||
1. The three-month periods ended December 31, 2023 and 2022 each had 61 business days. |
|||||||||||||||||
2. Dollar and percentage changes may not recalculate due to rounding. |
|||||||||||||||||
| Sales by Line of Business | ||||||||||||||||||
|
Year Ended December 31, |
|
Year-over-Year Change |
|||||||||||||||
|
2023 |
|
2022 |
|
||||||||||||||
|
Net Sales |
|
Mix % |
|
Net Sales |
|
Mix % |
|
$ |
|
% |
|||||||
Residential roofing products |
$ |
4,652.0 |
|
51.0 |
% |
|
$ |
4,217.9 |
|
50.0 |
% |
|
$ |
434.1 |
|
|
10.3 |
% |
Non-residential roofing products |
|
2,395.7 |
|
26.3 |
% |
|
|
2,464.3 |
|
29.2 |
% |
|
|
(68.6 |
) |
|
(2.7 |
) % |
Complementary building products |
|
2,072.1 |
|
22.7 |
% |
|
|
1,747.5 |
|
20.8 |
% |
|
|
324.6 |
|
|
18.6 |
% |
|
$ |
9,119.8 |
|
100.0 |
% |
|
$ |
8,429.7 |
|
100.0 |
% |
|
$ |
690.1 |
|
|
8.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sales by Business Day1,2 |
||||||||||||||||||
|
Year Ended December 31, |
|
Year-over-Year Change |
|||||||||||||||
|
2023 |
|
2022 |
|
||||||||||||||
|
Net Sales |
|
Mix % |
|
Net Sales |
|
Mix % |
|
$ |
|
% |
|||||||
Residential roofing products |
$ |
18.5 |
|
51.0 |
% |
|
$ |
16.8 |
|
50.0 |
% |
|
$ |
1.7 |
|
|
10.3 |
% |
Non-residential roofing products |
|
9.5 |
|
26.3 |
% |
|
|
9.8 |
|
29.2 |
% |
|
|
(0.3 |
) |
|
(2.7 |
) % |
Complementary building products |
|
8.2 |
|
22.7 |
% |
|
|
6.9 |
|
20.8 |
% |
|
|
1.3 |
|
|
18.6 |
% |
|
$ |
36.2 |
|
100.0 |
% |
|
$ |
33.5 |
|
100.0 |
% |
|
$ |
2.7 |
|
|
8.2 |
% |
| _____________ | ||||||||||||||||||
| 1. The years ended December 31, 2023 and 2022 each had 252 business days. | ||||||||||||||||||
| 2. Dollar and percentage changes may not recalculate due to rounding. | ||||||||||||||||||
BEACON ROOFING SUPPLY, INC.
Non-GAAP Financial Measures
(Unaudited; in millions)
Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, we prepare certain financial measures that are not calculated in accordance with GAAP, specifically:
- Adjusted Operating Expense. We define Adjusted Operating Expense as operating expense, excluding the impact of the adjusting items (as described below).
- Adjusted Net Income (Loss). We define Adjusted Net Income (Loss) as net income (loss), excluding the impact of the adjusting items (as described below).
- Adjusted EBITDA. We define Adjusted EBITDA as net income (loss), excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, and the adjusting items (as described below).
We use these supplemental non-GAAP measures to evaluate financial performance, analyze the underlying trends in our business and establish operational goals and forecasts that are used when allocating resources. We expect to compute our non-GAAP financial measures consistently using the same methods each period.
We believe these non-GAAP measures are useful measures because they permit investors to better understand changes over comparative periods by providing financial results that are unaffected by certain items that are not indicative of ongoing operating performance.
While we believe that these non-GAAP measures are useful to investors when evaluating our business, they are not prepared and presented in accordance with GAAP, and therefore should be considered supplemental in nature. These non-GAAP measures should not be considered in isolation or as a substitute for other financial performance measures presented in accordance with GAAP. These non-GAAP financial measures may have material limitations including, but not limited to, the exclusion of certain costs without a corresponding reduction of net income for the income generated by the assets to which the excluded costs relate. In addition, these non-GAAP financial measures may differ from similarly titled measures presented by other companies.
BEACON ROOFING SUPPLY, INC.
Non-GAAP Financial Measures (continued)
(Unaudited; in millions)
Adjusting Items to Non-GAAP Financial Measures
The impact of the following expense (income) items is excluded from each of our non-GAAP measures (the “adjusting items”):
- Acquisition costs. Represent certain direct and incremental costs related to acquisitions, including: amortization of intangible assets; professional fees, branch integration expenses, travel expenses, employee severance and retention costs, and other personnel expenses classified as selling, general and administrative; gains/losses related to changes in fair value of contingent consideration or holdback liabilities; and amortization of debt issuance costs. Acquisition costs are impacted by the timing and size of the acquisitions. We exclude acquisition costs from our non-GAAP financial measures to provide a useful comparison of our operating results to prior periods and to our peer companies because such amounts vary significantly based on the magnitude of the acquisition and do not reflect our core operations.
- Restructuring costs. Represent costs stemming from headcount rationalization efforts and certain rebranding costs; impact of divestitures; costs related to changing our fiscal year end; amortization of debt issuance costs; debt refinancing and extinguishment costs; and abandoned lease costs. We exclude restructuring costs from our non-GAAP financial measures, as such items vary significantly based on the magnitude of the restructuring activity and also do not reflect expected future operating expenses. Additionally, these costs do not necessarily provide meaningful insight into the current or past core operations of our business.
- COVID-19 impacts. Represent costs directly related to the COVID-19 pandemic. Beginning January 1, 2023, we determined COVID-19 impacts should no longer be considered an adjusting item. This change was applied prospectively.
The following table presents the pre-tax impact of the adjusting items on our consolidated statements of operations for each of the periods indicated:
|
Operating Expense |
|
Non-Operating Expense |
|
|
||||||||
|
SG&A1 |
|
Amortization |
|
Interest Expense |
|
Total |
||||||
Three Months Ended December 31, 2023 |
|
|
|
|
|
|
|
||||||
Acquisition costs |
$ |
1.6 |
|
|
$ |
19.9 |
|
$ |
1.1 |
|
$ |
22.6 |
|
Restructuring costs |
|
(1.5 |
) |
|
|
— |
|
|
0.5 |
|
|
(1.0 |
) |
COVID-19 impacts |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
Total adjusting items |
$ |
0.1 |
|
|
$ |
19.9 |
|
$ |
1.6 |
|
$ |
21.6 |
|
Three Months Ended December 31, 2022 |
|
|
|
|
|
|
|
||||||
Acquisition costs |
$ |
2.6 |
|
|
$ |
19.3 |
|
$ |
1.1 |
|
$ |
23.0 |
|
Restructuring costs |
|
2.8 |
|
|
|
— |
|
|
0.3 |
|
|
3.1 |
|
COVID-19 impacts |
|
0.3 |
|
|
|
— |
|
|
— |
|
|
0.3 |
|
Total adjusting items |
$ |
5.7 |
|
|
$ |
19.3 |
|
$ |
1.4 |
|
$ |
26.4 |
|
|
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2023 |
|
|
|
|
|
|
|
||||||
Acquisition costs |
$ |
6.9 |
|
|
$ |
85.0 |
|
$ |
4.1 |
|
$ |
96.0 |
|
Restructuring costs |
|
0.5 |
|
|
|
— |
|
|
1.5 |
|
|
2.0 |
|
COVID-19 impacts |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
Total adjusting items |
$ |
7.4 |
|
|
$ |
85.0 |
|
$ |
5.6 |
|
$ |
98.0 |
|
Year Ended December 31, 2022 |
|
|
|
|
|
|
|
||||||
Acquisition costs |
$ |
6.3 |
|
|
$ |
84.1 |
|
$ |
4.0 |
|
$ |
94.4 |
|
Restructuring costs |
|
8.9 |
|
|
|
— |
|
|
1.2 |
|
|
10.1 |
|
COVID-19 impacts |
|
2.0 |
|
|
|
— |
|
|
— |
|
|
2.0 |
|
Total adjusting items |
$ |
17.2 |
|
|
$ |
84.1 |
|
$ |
5.2 |
|
$ |
106.5 |
|
| _____________ | |||||||||||||
| 1. Selling, general and administrative expense (“SG&A”). | |||||||||||||
BEACON ROOFING SUPPLY, INC.
Non-GAAP Financial Measures (continued)
(Unaudited; in millions)
Adjusted Operating Expense
The following table presents a reconciliation of operating expense, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Operating Expense for each of the periods indicated:
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Operating expense |
$ |
428.5 |
|
|
$ |
389.3 |
|
|
$ |
1,630.5 |
|
|
$ |
1,532.1 |
|
Acquisition costs |
|
(21.5 |
) |
|
|
(21.9 |
) |
|
|
(91.9 |
) |
|
|
(90.4 |
) |
Restructuring costs |
|
1.5 |
|
|
|
(2.8 |
) |
|
|
(0.5 |
) |
|
|
(8.9 |
) |
COVID-19 impacts |
|
— |
|
|
|
(0.3 |
) |
|
|
— |
|
|
|
(2.0 |
) |
Adjusted Operating Expense |
$ |
408.5 |
|
|
$ |
364.3 |
|
|
$ |
1,538.1 |
|
|
$ |
1,430.8 |
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
2,299.5 |
|
|
$ |
1,969.4 |
|
|
$ |
9,119.8 |
|
|
$ |
8,429.7 |
|
Operating expense as % of sales |
|
18.6 |
% |
|
|
19.8 |
% |
|
|
17.9 |
% |
|
|
18.2 |
% |
Adjusted Operating Expense as % of sales |
|
17.8 |
% |
|
|
18.5 |
% |
|
|
16.9 |
% |
|
|
17.0 |
% |
Adjusted Net Income (Loss)
The following table presents a reconciliation of net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Net Income (Loss) for each of the periods indicated:
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
$ |
95.1 |
|
|
$ |
73.3 |
|
|
$ |
435.0 |
|
|
$ |
458.4 |
|
Adjusting items: |
|
|
|
|
|
|
|
||||||||
Acquisition costs |
|
22.6 |
|
|
|
23.0 |
|
|
|
96.0 |
|
|
|
94.4 |
|
Restructuring costs |
|
(1.0 |
) |
|
|
3.1 |
|
|
|
2.0 |
|
|
|
10.1 |
|
COVID-19 impacts |
|
— |
|
|
|
0.3 |
|
|
|
— |
|
|
|
2.0 |
|
Total adjusting items |
|
21.6 |
|
|
|
26.4 |
|
|
|
98.0 |
|
|
|
106.5 |
|
Less: tax impact of adjusting items1 |
|
(5.5 |
) |
|
|
(6.5 |
) |
|
|
(25.1 |
) |
|
|
(27.0 |
) |
Total adjustments, net of tax |
|
16.1 |
|
|
|
19.9 |
|
|
|
72.9 |
|
|
|
79.5 |
|
Adjusted Net Income (Loss) |
$ |
111.2 |
|
|
$ |
93.2 |
|
|
$ |
507.9 |
|
|
$ |
537.9 |
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
2,299.5 |
|
|
$ |
1,969.4 |
|
|
$ |
9,119.8 |
|
|
$ |
8,429.7 |
|
Net income (loss) as % of sales |
|
4.1 |
% |
|
|
3.7 |
% |
|
|
4.8 |
% |
|
|
5.4 |
% |
Adjusted Net Income (Loss) as % of sales |
|
4.8 |
% |
|
|
4.7 |
% |
|
|
5.6 |
% |
|
|
6.4 |
% |
| _____________ | |||||||||||||||
1. Amounts represent tax impact on adjustments that are not included in our income tax provision (benefit) for the periods presented. The tax impact of adjustments for the three months ended December 31, 2023 and 2022 were calculated using a blended effective tax rate of |
|||||||||||||||
BEACON ROOFING SUPPLY, INC.
Non-GAAP Financial Measures (continued)
(Unaudited; in millions)
Adjusted EBITDA
The following table presents a reconciliation of net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated:
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
$ |
95.1 |
|
|
$ |
73.3 |
|
|
$ |
435.0 |
|
|
$ |
458.4 |
|
Interest expense, net |
|
38.9 |
|
|
|
26.3 |
|
|
|
131.9 |
|
|
|
86.3 |
|
Income taxes |
|
31.3 |
|
|
|
27.6 |
|
|
|
151.1 |
|
|
|
161.3 |
|
Depreciation and amortization |
|
45.5 |
|
|
|
39.0 |
|
|
|
176.2 |
|
|
|
159.2 |
|
Stock-based compensation |
|
5.8 |
|
|
|
6.6 |
|
|
|
28.0 |
|
|
|
27.6 |
|
Acquisition costs1 |
|
1.6 |
|
|
|
2.6 |
|
|
|
6.9 |
|
|
|
6.3 |
|
Restructuring costs1 |
|
(1.5 |
) |
|
|
2.8 |
|
|
|
0.5 |
|
|
|
8.9 |
|
COVID-19 impacts1 |
|
— |
|
|
|
0.3 |
|
|
|
— |
|
|
|
2.0 |
|
Adjusted EBITDA |
$ |
216.7 |
|
|
$ |
178.5 |
|
|
$ |
929.6 |
|
|
$ |
910.0 |
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
2,299.5 |
|
|
$ |
1,969.4 |
|
|
$ |
9,119.8 |
|
|
$ |
8,429.7 |
|
Net income (loss) as % of sales |
|
4.1 |
% |
|
|
3.7 |
% |
|
|
4.8 |
% |
|
|
5.4 |
% |
Adjusted EBITDA as % of sales |
|
9.4 |
% |
|
|
9.1 |
% |
|
|
10.2 |
% |
|
|
10.8 |
% |
| _____________ | |||||||||||||||
| 1. Amounts represent adjusting items included in SG&A; remaining adjusting item balances are embedded within the other line item balances reported in this table. | |||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227361908/en/
INVESTOR CONTACT
Binit Sanghvi
VP, Capital Markets and Treasurer
Binit.Sanghvi@becn.com
972-369-8005
MEDIA CONTACT
Jennifer Lewis
VP, Communications and Corporate Social Responsibility
Jennifer.Lewis@becn.com
571-752-1048
Source: Beacon
FAQ
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