- Record quarterly net sales driven by execution on Ambition
2025 growth initiatives, including acquisitions and greenfields,
and strong residential demand
- Delivered net income of $153.8 million and Adjusted EBITDA
of $290.3 million, both at the high end of our previously announced
preliminary results
- Substantial operating cash flow generation benefited from
seasonally strong collections and continued inventory
right-sizing
- Repurchased all outstanding convertible preferred stock in
July 2023, reducing underlying common share base by 9.7 million
shares
Beacon (Nasdaq: BECN) (the “Company”, “we”, “our”) announced
results today for the second quarter ended June 30, 2023.
“Our team’s focused execution on the Ambition 2025 growth
initiatives drove record quarterly net sales, strong net income
margin and double-digit Adjusted EBITDA margin,” said Julian
Francis, Beacon’s President & CEO. “We leveraged an improving
residential market and our strategic investments in greenfields and
acquisitions, including Coastal Construction Products, to drive
top-line growth. I am especially pleased with the growth of our
industry-leading digital offering, achieving record adoption by our
residential customers. Our relentless customer focus is propelling
the team to help our customers build more. Internally, our emphasis
on efficiency is also showing tangible results, demonstrated by our
impressive operating expense to net sales ratio. We continued to
adjust inventory levels to local market conditions and generated
substantial cash flow, providing ample capacity to reinvest in the
business and return capital to shareholders. To that end, earlier
this week we closed on the repurchase of all the outstanding
preferred shares, which effectively reduced the common share base
of the Company by nearly 9.7 million shares. I am very happy with
the achievements this year and look forward to building on the
momentum to continue to create value for all our stakeholders.”
Second Quarter Financial Highlights
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(Unaudited; $ in millions, except per
share amounts)
Net sales
$
2,503.7
$
2,358.2
$
4,236.0
$
4,045.1
Gross profit
$
636.2
$
650.2
$
1,078.1
$
1,089.7
Gross margin %
25.4
%
27.6
%
25.5
%
26.9
%
Operating expense
$
401.9
$
395.8
$
783.2
$
744.0
% of net sales
16.1
%
16.8
%
18.5
%
18.4
%
Adjusted Operating Expense1
$
377.6
$
369.6
$
734.4
$
692.8
% of net sales1
15.1
%
15.7
%
17.3
%
17.1
%
Net income (loss)
$
153.8
$
174.5
$
178.6
$
230.3
% of net sales
6.1
%
7.4
%
4.2
%
5.7
%
Adjusted Net Income (Loss)1
$
172.9
$
194.6
$
216.7
$
270.2
% of net sales1
6.9
%
8.3
%
5.1
%
6.7
%
Adjusted EBITDA1
$
290.3
$
307.7
$
403.4
$
447.2
% of net sales1
11.6
%
13.0
%
9.5
%
11.1
%
Net income (loss) per share — diluted
("EPS")
$
1.97
$
2.12
$
2.22
$
2.72
________________________
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.
Second Quarter
Net sales increased 6.2% compared to the prior year to $2.50
billion, a Company record for quarterly net sales. Second quarter
sales increased compared to the prior year period driven by higher
prices and the contributions of acquired and newly opened branches
over the last four quarters. Weighted-average selling price
increased approximately 2-3%, while estimated organic volumes
decreased approximately 0-1%.
Residential roofing product sales increased 8.5%,
non-residential roofing product sales decreased 1.7%, and
complementary product sales increased 11.6% compared to the prior
year. The increase in complementary product sales was largely due
to the November 2022 acquisition of Coastal Construction Products.
The three-month periods ending June 30, 2023 and 2022 each had 64
business days.
Gross margin decreased to 25.4%, from 27.6% in the prior year,
as higher product costs related to the inventory profit roll-off
more than offset higher average selling prices for our products.
The increases in operating expense and Adjusted Operating Expense
were largely from acquired branches and greenfields. Excluding
these impacts, operating expense from existing branches decreased
by approximately 5.4%, or $21.3 million. The comparative decrease
was related to a decrease in payroll and benefits costs, primarily
due to lower incentive compensation, and decreases in selling,
general and administrative expenses. On a consolidated basis, both
operating expense as a percent of sales and Adjusted Operating
Expense as a percent of sales were comparatively lower in the
second quarter of 2023, driven by the higher sales combined with
cost management.
Net income (loss) was $153.8 million, compared to $174.5 million
in the prior year. Adjusted EBITDA was $290.3 million, compared to
$307.7 million in the prior year. EPS was $1.97, compared to $2.12
in the prior year. Second quarter results compared to the prior
year period were impacted by the lower gross margin and higher
operating expenses as described above.
In February 2023, Beacon announced an increase in its share
repurchase program, pursuant to which the Company may purchase up
to $500 million of its common stock (inclusive of the $112 million
remaining authorization under the program announced in February
2022). In the second quarter of 2023, the Company repurchased and
retired $51.6 million of its common stock on the open market
through Rule 10b5-1 repurchase plans. As a result, there were 63.4
million shares of common stock outstanding as of June 30, 2023.
Following the end of the second quarter, the Company repurchased an
additional $25.1 million of its common stock under the same plan
and announced that it does not expect additional repurchases during
the remainder of the year under the existing share repurchase
authorization.
Year-to-Date
Net sales increased 4.7% (3.9% on a per-day basis) compared to
the prior year to $4.24 billion, a Company record for net sales for
the first half. 2023 net sales increased compared to the prior year
period, largely driven by the successful implementation of price
increases and the contributions of acquired and newly opened
branches over the last four quarters. Weighted-average selling
price increased approximately 5-6%, while estimated organic volumes
decreased approximately 4-5% (5-6% on a per-day basis).
Residential roofing product sales increased 5.2% (4.3% on a
per-day basis), non-residential roofing product sales decreased
4.2% (5.0% on a per-day basis), and complementary product sales
increased 16.2% (15.3% on a per-day basis) compared to the prior
year. The increase in complementary product sales was largely due
to the November 2022 acquisition of Coastal Construction Products.
The six-month periods ending June 30, 2023 and 2022 had 128 and 127
business days, respectively.
Gross margin decreased to 25.5%, from 26.9% in the prior year,
as higher product costs related to the inventory profit roll-off
more than offset higher average selling prices for our products.
The increases in operating expense and Adjusted Operating Expense
were largely from acquired branches and greenfields. Excluding
these impacts, operating expense from existing branches decreased
by approximately 1.8%, or $13.3 million. The comparative decrease
was related to a decrease in payroll and benefits costs, primarily
due to lower incentive compensation, and a decrease in amortization
expense. On a consolidated basis, both operating expense as a
percent of sales and Adjusted Operating Expense as a percent of
sales were slightly higher in 2023, driven by increases in payroll
and benefits costs related to additional headcount to support new
and acquired branches as well as future growth initiatives.
Inflation and higher selling, general and administrative expenses
also contributed to the increase.
Net income (loss) was $178.6 million, compared to $230.3 million
in the prior year. Adjusted EBITDA was $403.4 million, compared to
$447.2 million in the prior year. EPS was $2.22, compared to $2.72
in the prior year. Results in the first half compared to the prior
year period were largely driven by the decrease in gross margins
and higher operating expenses described above.
In the first half of 2023, the Company repurchased and retired
$74.8 million of its common stock on the open market through Rule
10b5-1 repurchase plans. As a result, shares of common stock
outstanding decreased, net of issuance, to 63.4 million as of June
30, 2023, from 64.2 million as of December 31, 2022.
To calculate approximate weighted average selling price and
product cost changes, we review organic U.S. warehouse sales of the
same items sold regionally period over period and normalize the
data for non-representative outliers. To calculate estimated
volumes, we subtract the change in weighted average selling price,
as described above, from the total changes in sales, excluding
acquisitions and dispositions. As a result, and especially in high
inflationary periods, the weighted average selling price and
estimated volume changes may not be directly comparable to changes
reported in prior periods.
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 Second Quarter 2023 Earnings
Call
When:
Thursday, August 3, 2023
Time:
5:00 p.m. ET
Access:
Register for the conference call or
webcast by visiting:
Beacon Investor Relations – Events &
Presentations
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 U.S. Securities and Exchange Commission. The Company may
not succeed in addressing these and other risks. Consequently, all
forward-looking statements in this release are qualified by the
factors, risks and uncertainties contained therein. In addition,
the forward-looking statements included in this press release
represent the Company's views as of the date of this press release
and these views could change. However, while the Company may elect
to update these forward-looking statements at some point, the
Company specifically disclaims any obligation to do so, other than
as required by federal securities laws. These forward-looking
statements should not be relied upon as representing the Company's
views as of any date subsequent to the date of this press
release.
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 500 branches throughout all 50 states in the
U.S. and 6 provinces in Canada. Beacon serves an extensive base of
nearly 100,000 customers, utilizing its vast branch network and
diverse service offerings to provide high-quality products and
support throughout the entire business lifecycle. Beacon offers its
own private label brand, TRI-BUILT®, and has a proprietary digital
account management suite, Beacon PRO+, which allows customers to
manage their businesses online. Beacon’s stock is traded on the
Nasdaq Global Select Market under the ticker symbol BECN. To learn
more about Beacon, please visit https://www.becn.com/.
BEACON ROOFING SUPPLY,
INC.
Consolidated Statements of
Operations
(Unaudited; in millions, except
per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2023
% of
Net Sales
2022
% of
Net Sales
2023
% of
Net Sales
2022
% of
Net Sales
Net sales
$
2,503.7
100.0
%
$
2,358.2
100.0
%
$
4,236.0
100.0
%
$
4,045.1
100.0
%
Cost of products sold
1,867.5
74.6
%
1,708.0
72.4
%
3,157.9
74.5
%
2,955.4
73.1
%
Gross profit
636.2
25.4
%
650.2
27.6
%
1,078.1
25.5
%
1,089.7
26.9
%
Operating expense:
Selling, general and administrative
358.7
14.3
%
355.4
15.1
%
697.0
16.5
%
664.7
16.4
%
Depreciation
21.8
0.9
%
18.9
0.8
%
42.5
1.0
%
36.4
0.9
%
Amortization
21.4
0.9
%
21.5
0.9
%
43.7
1.0
%
42.9
1.1
%
Total operating expense
401.9
16.1
%
395.8
16.8
%
783.2
18.5
%
744.0
18.4
%
Income (loss) from operations
234.3
9.3
%
254.4
10.8
%
294.9
7.0
%
345.7
8.5
%
Interest expense, financing costs and
other
26.0
1.0
%
18.9
0.8
%
53.8
1.3
%
35.5
0.8
%
Income (loss) before provision for income
taxes
208.3
8.3
%
235.5
10.0
%
241.1
5.7
%
310.2
7.7
%
Provision for (benefit from) income
taxes
54.5
2.2
%
61.0
2.6
%
62.5
1.5
%
79.9
2.0
%
Net income (loss)
$
153.8
6.1
%
$
174.5
7.4
%
$
178.6
4.2
%
$
230.3
5.7
%
Reconciliation of net income (loss) to net
income (loss) attributable to common stockholders:
Net income (loss)
$
153.8
6.1
%
$
174.5
7.4
%
$
178.6
4.2
%
$
230.3
5.7
%
Dividends on Preferred Stock
(6.0
)
(0.2
)%
(6.0
)
(0.2
)%
(12.0
)
(0.3
)%
(12.0
)
(0.3
)%
Undistributed income allocated to
participating securities
(19.5
)
(0.8
)%
(20.9
)
(0.9
)%
(21.9
)
(0.5
)%
(26.8
)
(0.7
)%
Net income (loss) attributable to common
stockholders
$
128.3
5.1
%
$
147.6
6.3
%
$
144.7
3.4
%
$
191.5
4.7
%
Weighted-average common stock
outstanding:
Basic
63.7
68.1
64.0
69.1
Diluted
65.1
69.5
65.3
70.4
Net income (loss) per share:
Basic
$
2.02
$
2.17
$
2.26
$
2.77
Diluted
$
1.97
$
2.12
$
2.22
$
2.72
BEACON ROOFING SUPPLY,
INC.
Consolidated Balance
Sheets
(Unaudited; in millions)
June 30,
December 31,
June 30,
2023
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
65.8
$
67.7
$
54.6
Accounts receivable, net
1,361.7
1,009.1
1,321.7
Inventories, net
1,352.8
1,322.9
1,548.7
Prepaid expenses and other current
assets
512.1
417.8
422.6
Total current assets
3,292.4
2,817.5
3,347.6
Property and equipment, net
380.8
337.0
289.1
Goodwill
1,922.9
1,916.3
1,785.2
Intangibles, net
415.8
447.7
383.4
Operating lease assets
470.3
467.6
418.0
Deferred income taxes, net
6.8
9.9
58.0
Other assets, net
11.3
7.5
1.4
Total assets
$
6,500.3
$
6,003.5
$
6,282.7
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
1,317.4
$
821.0
$
1,168.9
Accrued expenses
498.0
448.0
476.5
Current operating lease liabilities
97.2
94.5
89.7
Current finance lease liabilities
20.4
16.1
10.9
Current portion of long-term
debt/obligations
10.0
10.0
10.0
Total current liabilities
1,943.0
1,389.6
1,756.0
Borrowings under revolving lines of
credit, net
67.5
254.9
461.3
Long-term debt, net
1,603.2
1,606.4
1,609.6
Other long-term liabilities
0.7
0.2
0.6
Non-current operating lease
liabilities
385.1
382.1
334.4
Non-current finance lease liabilities
78.9
67.0
45.3
Total liabilities
4,078.4
3,700.2
4,207.2
Convertible Preferred Stock
399.2
399.2
399.2
Stockholders' equity:
Common stock
0.6
0.6
0.6
Undesignated preferred stock
—
—
—
Additional paid-in capital
1,208.1
1,187.2
1,123.5
Retained earnings
820.1
728.8
562.8
Accumulated other comprehensive income
(loss)
(6.1
)
(12.5
)
(10.6
)
Total stockholders' equity
2,022.7
1,904.1
1,676.3
Total liabilities and stockholders'
equity
$
6,500.3
$
6,003.5
$
6,282.7
BEACON ROOFING SUPPLY,
INC.
Consolidated Statements of
Cash Flows
(Unaudited; in millions)
Six Months Ended June
30,
2023
2022
Operating Activities
Net income (loss)
$
178.6
$
230.3
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
86.2
79.3
Stock-based compensation
14.3
13.1
Certain interest expense and other
financing costs
1.3
2.6
Gain on sale of fixed assets and other
(9.5
)
(2.9
)
Deferred income taxes
1.6
0.7
Changes in operating assets and
liabilities:
Accounts receivable
(346.5
)
(466.1
)
Inventories
(19.5
)
(385.0
)
Prepaid expenses and other current
assets
(87.2
)
(47.1
)
Accounts payable and accrued expenses
539.2
383.7
Other assets and liabilities
0.2
4.4
Net cash provided by (used in) operating
activities
358.7
(187.0
)
Investing Activities
Purchases of property and equipment
(60.3
)
(39.8
)
Acquisition of business, net
(30.5
)
(16.7
)
Proceeds from the sale of assets
10.7
3.0
Purchases of investments
(0.9
)
—
Net cash provided by (used in) investing
activities
(81.0
)
(53.5
)
Financing Activities
Borrowings under revolving lines of
credit
840.7
1,365.9
Payments under revolving lines of
credit
(1,028.8
)
(898.1
)
Payments under term loan
(5.0
)
(5.0
)
Payments under equipment financing
facilities and finance leases
(9.1
)
(4.9
)
Repurchase and retirement of common stock,
net
(72.4
)
(338.1
)
Advance payment for equity forward
contract
—
(50.0
)
Payment of dividends on Preferred
Stock
(12.0
)
(12.0
)
Proceeds from issuance of common stock
related to equity awards
8.1
12.2
Payment of taxes related to net share
settlement of equity awards
(1.5
)
(0.4
)
Net cash provided by (used in) financing
activities
(280.0
)
69.6
Effect of exchange rate changes on cash
and cash equivalents
0.4
(0.3
)
Net increase (decrease) in cash and cash
equivalents
(1.9
)
(171.2
)
Cash and cash equivalents, beginning of
period
67.7
225.8
Cash and cash equivalents, end of
period
$
65.8
$
54.6
Supplemental Cash Flow
Information
Cash paid during the period for:
Interest
$
53.4
$
37.1
Income taxes, net of refunds1
$
31.3
$
57.4
Supplemental Disclosure of Non-Cash
Activities
Amounts accrued for repurchases of common
stock, inclusive of excise tax
$
2.9
$
—
________________________
1.
Six months ended June 30, 2022 amount
includes $18.6 million related to the transition period from
October 1, 2021 to December 31, 2021.
BEACON ROOFING SUPPLY,
INC.
Consolidated Sales by Line of
Business
(Unaudited; in millions)
Sales by Line of
Business
Three Months Ended June
30,
Year-over-Year
Change
2023
2022
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
1,298.0
51.8
%
$
1,196.1
50.7
%
$
101.9
8.5
%
Non-residential roofing products
670.8
26.8
%
682.6
29.0
%
(11.8
)
(1.7
)%
Complementary building products
534.9
21.4
%
479.5
20.3
%
55.4
11.6
%
$
2,503.7
100.0
%
$
2,358.2
100.0
%
$
145.5
6.2
%
Sales by Business
Day1,2
Three Months Ended June
30,
Year-over-Year
Change
2023
2022
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
20.2
51.8
%
$
18.7
50.7
%
$
1.5
8.5
%
Non-residential roofing products
10.5
26.8
%
10.6
29.0
%
(0.1
)
(1.7
)%
Complementary building products
8.4
21.4
%
7.5
20.3
%
0.9
11.6
%
$
39.1
100.0
%
$
36.8
100.0
%
$
2.3
6.2
%
________________________
1.
The three-month periods ended June 30,
2023 and 2022 each had 64 business days.
2.
Dollar and percentage changes may not
recalculate due to rounding.
Sales by Line of Business
Six Months Ended June
30,
Year-over-Year
Change
2023
2022
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
2,148.1
50.7
%
$
2,042.6
50.5
%
$
105.5
5.2
%
Non-residential roofing products
1,120.8
26.5
%
1,170.3
28.9
%
(49.5
)
(4.2
)%
Complementary building products
967.1
22.8
%
832.2
20.6
%
134.9
16.2
%
$
4,236.0
100.0
%
$
4,045.1
100.0
%
$
190.9
4.7
%
Sales by Business
Day1,2
Six Months Ended June
30,
Year-over-Year
Change
2023
2022
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
16.7
50.7
%
$
16.1
50.5
%
$
0.6
4.3
%
Non-residential roofing products
8.8
26.5
%
9.2
28.9
%
(0.4
)
(5.0
)%
Complementary building products
7.6
22.8
%
6.6
20.6
%
1.0
15.3
%
$
33.1
100.0
%
$
31.9
100.0
%
$
1.2
3.9
%
________________________
1.
The six-month periods ended June 30, 2023
and 2022 had 128 and 127 business days, respectively.
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 costs related to
historical 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, the Company
determined COVID-19 impacts should no longer be considered an
adjusting item. This change was applied prospectively.
The following table presents the impact and respective location
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
Income Taxes2
Total
Three Months Ended June 30,
2023
Acquisition costs
$
1.4
$
21.4
$
1.0
$
—
$
23.8
Restructuring costs
1.5
—
0.3
—
1.8
Total adjusting items
$
2.9
$
21.4
$
1.3
$
—
$
25.6
Three Months Ended June 30,
2022
Acquisition costs
$
1.7
$
21.5
$
1.0
$
—
$
24.2
Restructuring costs
2.9
—
0.3
—
3.2
COVID-19 impacts
0.1
—
—
—
0.1
Total adjusting items
$
4.7
$
21.5
$
1.3
$
—
$
27.5
Six Months Ended June 30, 2023
Acquisition costs
$
3.1
$
43.7
$
1.9
$
—
$
48.7
Restructuring costs
2.0
—
0.6
—
2.6
Total adjusting items
$
5.1
$
43.7
$
2.5
$
—
$
51.3
Six Months Ended June 30, 2022
Acquisition costs
$
2.2
$
42.9
$
2.0
$
—
$
47.1
Restructuring costs
4.6
—
0.6
—
5.2
COVID-19 impacts
1.5
—
—
—
1.5
Total adjusting items
$
8.3
$
42.9
$
2.6
$
—
$
53.8
________________________
1.
Selling, general and administrative
expense (“SG&A”).
2.
For tax impact of adjusting items, see
Adjusted Net Income (Loss) table below.
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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Operating expense
$
401.9
$
395.8
$
783.2
$
744.0
Acquisition costs
(22.8
)
(23.2
)
(46.8
)
(45.1
)
Restructuring costs
(1.5
)
(2.9
)
(2.0
)
(4.6
)
COVID-19 impacts
—
(0.1
)
—
(1.5
)
Adjusted Operating Expense
$
377.6
$
369.6
$
734.4
$
692.8
Net sales
$
2,503.7
$
2,358.2
$
4,236.0
$
4,045.1
Operating expense as % of sales
16.1
%
16.8
%
18.5
%
18.4
%
Adjusted Operating Expense as % of
sales
15.1
%
15.7
%
17.3
%
17.1
%
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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income (loss)
$
153.8
$
174.5
$
178.6
$
230.3
Adjusting items:
Acquisition costs
23.8
24.2
48.7
47.1
Restructuring costs
1.8
3.2
2.6
5.2
COVID-19 impacts
—
0.1
—
1.5
Total adjusting items
25.6
27.5
51.3
53.8
Less: tax impact of adjusting items1
(6.5
)
(7.4
)
(13.2
)
(13.9
)
Total adjustments, net of tax
19.1
20.1
38.1
39.9
Adjusted Net Income (Loss)
$
172.9
$
194.6
$
216.7
$
270.2
Net sales
$
2,503.7
$
2,358.2
$
4,236.0
$
4,045.1
Net income (loss) as % of sales
6.1
%
7.4
%
4.2
%
5.7
%
Adjusted Net Income (Loss) as % of
sales
6.9
%
8.3
%
5.1
%
6.7
%
________________________
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 June 30, 2023 and 2022 were calculated
using a blended effective tax rate of 25.4% and 26.9%,
respectively. The tax impact of adjustments for the six months
ended June 30, 2023 and 2022 were calculated using a blended
effective tax rate of 25.7% and 25.8%, respectively.
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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income (loss)
$
153.8
$
174.5
$
178.6
$
230.3
Interest expense, net
27.6
19.1
56.7
36.3
Income taxes
54.5
61.0
62.5
79.9
Depreciation and amortization
43.2
40.4
86.2
79.3
Stock-based compensation
8.3
8.0
14.3
13.1
Acquisition costs1
1.4
1.7
3.1
2.2
Restructuring costs1
1.5
2.9
2.0
4.6
COVID-19 impacts
—
0.1
—
1.5
Adjusted EBITDA
$
290.3
$
307.7
$
403.4
$
447.2
Net sales
$
2,503.7
$
2,358.2
$
4,236.0
$
4,045.1
Net income (loss) as % of sales
6.1
%
7.4
%
4.2
%
5.7
%
Adjusted EBITDA as % of sales
11.6
%
13.0
%
9.5
%
11.1
%
________________________
1.
Amounts represent adjusting items included
in SG&A and other income (expense); 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/20230803390592/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
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