UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 |
Results of Operations and Financial Condition |
On November 18, 2021, Beacon Roofing Supply, Inc. (the “Company”) issued a press release providing information regarding earnings for the fourth quarter and fiscal year ended September 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1.
On November 18, 2021, the Company delivered a presentation as part of the webcast for the earnings conference call for the fourth quarter and fiscal year ended September 30, 2021. A copy of the presentation is attached hereto as Exhibit 99.2.
The information including Exhibit 99.1 and Exhibit 99.2 in Item 2.02 of this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, except as shall otherwise be expressly set forth by specific reference in such filing.
Item 9.01 |
Financial Statements and Exhibits |
(d) Exhibits
Exhibit Index |
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Exhibit Number |
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Description |
99.1 |
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Beacon Roofing Supply, Inc. press release dated November 18, 2021. |
99.2 |
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Beacon Roofing Supply, Inc. earnings presentation dated November 18, 2021. |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BEACON ROOFING SUPPLY, INC. |
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Date: November 18, 2021 |
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By: |
/s/ FRANK A. LONEGRO |
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Frank A. Lonegro |
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Executive Vice President & Chief Financial Officer |
Exhibit 99.1
BEACON REPORTS FOURTH QUARTER AND FISCAL YEAR 2021 RESULTS
HERNDON, VA.—(BUSINESS WIRE)—November 18, 2021—Beacon (Nasdaq: BECN) (the “Company”) announced results today for its fourth quarter and fiscal year ended September 30, 2021.
“In fiscal 2021, we demonstrated the strength of our platform by generating record top line and bottom line results, building a solid foundation for our future ambitions,” said Julian Francis, Beacon’s President and Chief Executive Officer. “Focused market and price execution also drove the highest fourth quarter sales and Adjusted EBITDA in our history. Our team continued to deliver high-value solutions to our customers’ critical building material needs in a supply-challenged environment. Furthermore, the progress on our strategic initiatives and operational improvements has been transformational throughout fiscal 2021. We have focused our business on our core exteriors customer and strengthened our balance sheet. Today, we have ample capacity to make strategic investments and drive enhanced growth. Looking forward, we have the right leadership team to execute on a multi-year runway of market opportunities that will create value for all of our stakeholders.”
Fourth Quarter and Fiscal Year Financial Highlights
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Q4 2021 |
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Q4 2020 |
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FY 2021 |
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FY 2020 |
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||||
(Unaudited; $ in millions, except per share amounts) |
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||||
Net sales |
$ |
1,875.4 |
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|
$ |
1,755.0 |
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|
$ |
6,642.0 |
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|
$ |
5,916.7 |
|
Gross profit |
$ |
507.8 |
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|
$ |
441.3 |
|
|
$ |
1,757.7 |
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|
$ |
1,420.5 |
|
Gross margin % |
|
27.1 |
% |
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25.1 |
% |
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26.5 |
% |
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24.0 |
% |
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||||
Operating expense |
$ |
349.7 |
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|
$ |
324.9 |
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$ |
1,300.9 |
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|
$ |
1,385.5 |
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% of net sales |
|
18.6 |
% |
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18.5 |
% |
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19.6 |
% |
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|
23.4 |
% |
Adjusted Operating Expense1 |
$ |
320.6 |
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|
$ |
291.9 |
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$ |
1,183.3 |
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$ |
1,107.5 |
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% of net sales1 |
|
17.1 |
% |
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|
16.6 |
% |
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17.8 |
% |
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18.7 |
% |
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||||
Net income (loss) from continuing operations |
$ |
104.5 |
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$ |
68.2 |
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$ |
221.2 |
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|
$ |
(81.3 |
) |
% of net sales |
|
5.6 |
% |
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3.9 |
% |
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3.3 |
% |
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(1.4 |
%) |
Adjusted Net Income (Loss)1 |
$ |
127.1 |
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$ |
90.7 |
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$ |
360.1 |
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$ |
145.8 |
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% of net sales1 |
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6.8 |
% |
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5.2 |
% |
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5.4 |
% |
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2.5 |
% |
Adjusted EBITDA1 |
$ |
208.1 |
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$ |
169.0 |
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$ |
654.7 |
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$ |
398.6 |
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% of net sales1 |
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11.1 |
% |
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9.6 |
% |
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9.9 |
% |
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6.7 |
% |
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Net income (loss) from continuing operations per share — diluted ("EPS") |
$ |
1.21 |
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$ |
0.78 |
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$ |
2.75 |
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$ |
(1.53 |
) |
___________________________
-1-
Fourth Quarter
Net sales increased 6.9% compared to the prior year to $1.88 billion, a quarterly record for net sales from continuing operations. Fourth quarter sales increased across all three lines of business, largely driven by the realization of higher prices.
Residential roofing product sales increased 3.1%, complementary product sales increased 17.0%, and non-residential roofing product sales increased 7.0% compared to the prior year. The fourth quarter of fiscal 2021 and 2020 each had 64 business days.
Gross margin improved to 27.1% in 2021, from 25.1% in the prior year, primarily reflecting pricing execution that drove price-cost improvement, partially offset by an unfavorable sales mix. Operating expense increased in the fourth quarter due to higher payroll and benefits expense, which increased due to higher incentive compensation and the impact of certain temporary cost actions taken in response to the COVID-19 pandemic. Selling expenses, driven primarily by increased travel and entertainment costs, also contributed to the comparative increase. Adjusted Operating Expense was also comparatively higher in the current period due to the same factors. Both operating expense and Adjusted Operating Expense increased as a percent of sales, reflecting the higher incentive compensation and selling costs.
Net income (loss) from continuing operations was $104.5 million, compared to $68.2 million in 2020. Adjusted EBITDA was $208.1 million, compared to $169.0 million in 2020. EPS was $1.21, compared to $0.78 in 2020. Comparative improvements in fourth quarter results were driven by higher sales and gross margins.
Fiscal Year
Net sales increased 12.3% compared to the prior year despite one fewer business day, an annual record for net sales from continuing operations. Residential roofing product sales increased 14.2%, complementary product sales increased 17.7%, and non-residential roofing product sales increased 4.5% compared to the prior year. Fiscal years 2021 and 2020 had 253 and 254 business days, respectively.
Gross margin improved to 26.5% in 2021, from 24.0% in the prior year. Operating expense decreased compared to the prior year, primarily due to the write-off of certain trade names in connection with the Company’s rebranding efforts in the prior period, as well as productivity efforts and improvements in our cost structure. The decrease was partially offset by an increase in payroll and employee benefit costs, primarily due to the year-over-year increase in annual incentive expense in 2021, higher wages to support stronger demand, and the impact of certain temporary cost actions taken in 2020 in response to the COVID-19 pandemic. Adjusted Operating Expense was comparatively higher in 2021, primarily due to the same factors. Both operating expense and Adjusted Operating Expense decreased as a percent of sales, reflecting the positive impact of net sales growth, productivity initiatives and cost management.
Net income (loss) from continuing operations was $221.2 million, compared to $(81.3) million in 2020. Adjusted EBITDA was $654.7 million, compared to $398.6 million in 2020. EPS was $2.75, compared to $(1.53) in 2020.
Recent Acquisition Activity
On November 1, 2021, we announced the acquisition of Midway Sales & Distributing, Inc., a leading Midwest distributor of residential and commercial exterior building and roofing supplies with 10 branches across Kansas, Missouri and Nebraska. With annual sales of approximately $130 million, the acquisition deepens Beacon’s already strong presence in the Midwest.
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.
-2-
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 Fiscal Year 2021 Earnings Call |
When: |
Thursday, November 18, 2021 |
Time: |
5:00 p.m. ET |
Access: |
Register for the conference call or webcast by visiting: |
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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 September 30, 2020 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 roofing materials and complementary building products in North America, operating over 400 branches throughout all 50 states in the U.S. and 6 provinces in Canada. Beacon serves an extensive base of over 80,000 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 business with us online. Beacon’s stock is traded on the Nasdaq Global Select Market under the ticker symbol BECN. To learn more about Beacon, please visit www.becn.com
INVESTOR CONTACT |
MEDIA CONTACT |
Binit Sanghvi |
Jennifer Lewis |
Head of Investor Relations |
VP, Communications and Corporate Social Responsibility |
Binit.Sanghvi@becn.com |
Jennifer.Lewis@becn.com |
972-369-8005 |
571-752-1048 |
-3-
BEACON ROOFING SUPPLY, INC.
Consolidated Statements of Operations
(Unaudited; in millions, except per share amounts)
|
Three Months Ended September 30, |
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Year Ended September 30, |
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||||||||||||||||||||||||||
|
2021 |
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% of |
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2020 |
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% of |
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2021 |
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% of |
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2020 |
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|
% of |
|
||||||||
Net sales |
$ |
1,875.4 |
|
|
|
100.0 |
% |
|
$ |
1,755.0 |
|
|
|
100.0 |
% |
|
$ |
6,642.0 |
|
|
|
100.0 |
% |
|
$ |
5,916.7 |
|
|
|
100.0 |
% |
Cost of products sold |
|
1,367.6 |
|
|
|
72.9 |
% |
|
|
1,313.7 |
|
|
|
74.9 |
% |
|
|
4,884.3 |
|
|
|
73.5 |
% |
|
|
4,496.2 |
|
|
|
76.0 |
% |
Gross profit |
|
507.8 |
|
|
|
27.1 |
% |
|
|
441.3 |
|
|
|
25.1 |
% |
|
|
1,757.7 |
|
|
|
26.5 |
% |
|
|
1,420.5 |
|
|
|
24.0 |
% |
Operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||
Selling, general and administrative |
|
309.4 |
|
|
|
16.5 |
% |
|
|
281.0 |
|
|
|
16.0 |
% |
|
|
1,138.7 |
|
|
|
17.1 |
% |
|
|
1,065.5 |
|
|
|
18.0 |
% |
Depreciation |
|
15.3 |
|
|
|
0.8 |
% |
|
|
13.7 |
|
|
|
0.8 |
% |
|
|
58.9 |
|
|
|
0.9 |
% |
|
|
58.1 |
|
|
|
1.0 |
% |
Amortization |
|
25.0 |
|
|
|
1.3 |
% |
|
|
30.2 |
|
|
|
1.7 |
% |
|
|
103.3 |
|
|
|
1.6 |
% |
|
|
261.9 |
|
|
|
4.4 |
% |
Total operating expense |
|
349.7 |
|
|
|
18.6 |
% |
|
|
324.9 |
|
|
|
18.5 |
% |
|
|
1,300.9 |
|
|
|
19.6 |
% |
|
|
1,385.5 |
|
|
|
23.4 |
% |
Income (loss) from operations |
|
158.1 |
|
|
|
8.5 |
% |
|
|
116.4 |
|
|
|
6.6 |
% |
|
|
456.8 |
|
|
|
6.9 |
% |
|
|
35.0 |
|
|
|
0.6 |
% |
Interest expense, financing costs, and other |
|
16.3 |
|
|
|
0.9 |
% |
|
|
31.3 |
|
|
|
1.8 |
% |
|
|
98.1 |
|
|
|
1.5 |
% |
|
|
128.6 |
|
|
|
2.2 |
% |
Loss on debt extinguishment |
|
— |
|
|
|
0.0 |
% |
|
|
— |
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|
|
0.0 |
% |
|
|
60.2 |
|
|
|
0.9 |
% |
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|
14.7 |
|
|
|
0.2 |
% |
Income (loss) from continuing operations before income taxes |
|
141.8 |
|
|
|
7.6 |
% |
|
|
85.1 |
|
|
|
4.8 |
% |
|
|
298.5 |
|
|
|
4.5 |
% |
|
|
(108.3 |
) |
|
|
(1.8 |
%) |
Provision for (benefit from) income taxes |
|
37.3 |
|
|
|
2.0 |
% |
|
|
16.9 |
|
|
|
0.9 |
% |
|
|
77.3 |
|
|
|
1.2 |
% |
|
|
(27.0 |
) |
|
|
(0.4 |
%) |
Net income (loss) from continuing operations |
|
104.5 |
|
|
|
5.6 |
% |
|
|
68.2 |
|
|
|
3.9 |
% |
|
|
221.2 |
|
|
|
3.3 |
% |
|
|
(81.3 |
) |
|
|
(1.4 |
%) |
Net income (loss) from discontinued operations1 |
|
0.3 |
|
|
|
0.0 |
% |
|
|
3.7 |
|
|
|
0.2 |
% |
|
|
(266.7 |
) |
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|
(4.0 |
%) |
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|
0.4 |
|
|
|
0.0 |
% |
Net income (loss) |
|
104.8 |
|
|
|
5.6 |
% |
|
|
71.9 |
|
|
|
4.1 |
% |
|
|
(45.5 |
) |
|
|
(0.7 |
%) |
|
|
(80.9 |
) |
|
|
(1.4 |
%) |
Dividends on Preferred Stock |
|
6.0 |
|
|
|
0.3 |
% |
|
|
6.0 |
|
|
|
0.3 |
% |
|
|
24.0 |
|
|
|
0.3 |
% |
|
|
24.0 |
|
|
|
0.4 |
% |
Net income (loss) attributable to common stockholders |
$ |
98.8 |
|
|
|
5.3 |
% |
|
$ |
65.9 |
|
|
|
3.8 |
% |
|
$ |
(69.5 |
) |
|
|
(1.0 |
%) |
|
$ |
(104.9 |
) |
|
|
(1.8 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
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||||||||
Weighted-average common stock outstanding: |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||
Basic |
|
69.9 |
|
|
|
|
|
|
68.9 |
|
|
|
|
|
|
69.7 |
|
|
|
|
|
|
68.8 |
|
|
|
|
||||
Diluted2 |
|
71.3 |
|
|
|
|
|
|
69.6 |
|
|
|
|
|
|
80.5 |
|
|
|
|
|
|
68.8 |
|
|
|
|
||||
|
|
|
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|
|
|
|
|
|
|
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|
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|
||||||||
Net income (loss) per share: |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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||||||||
Basic - Continuing operations |
$ |
1.23 |
|
|
|
|
|
$ |
0.79 |
|
|
|
|
|
$ |
2.83 |
|
|
|
|
|
$ |
(1.53 |
) |
|
|
|
||||
Basic - Discontinued operations |
|
0.01 |
|
|
|
|
|
|
0.05 |
|
|
|
|
|
|
(3.83 |
) |
|
|
|
|
|
0.01 |
|
|
|
|
||||
Basic net income (loss) per share |
$ |
1.24 |
|
|
|
|
|
$ |
0.84 |
|
|
|
|
|
$ |
(1.00 |
) |
|
|
|
|
$ |
(1.52 |
) |
|
|
|
||||
|
|
|
|
|
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|
|
|
|
|
|
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|
|
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|
|
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|
||||||||
Diluted - Continuing operations |
$ |
1.21 |
|
|
|
|
|
$ |
0.78 |
|
|
|
|
|
$ |
2.75 |
|
|
|
|
|
$ |
(1.53 |
) |
|
|
|
||||
Diluted - Discontinued operations |
|
0.01 |
|
|
|
|
|
|
0.05 |
|
|
|
|
|
|
(3.32 |
) |
|
|
|
|
|
0.01 |
|
|
|
|
||||
Diluted net income (loss) per share |
$ |
1.22 |
|
|
|
|
|
$ |
0.83 |
|
|
|
|
|
$ |
(0.57 |
) |
|
|
|
|
$ |
(1.52 |
) |
|
|
|
________________________
-4-
BEACON ROOFING SUPPLY, INC.
Consolidated Balance Sheets
(Unaudited; in millions)
|
September 30, |
|
|
September 30, |
|
||
|
2021 |
|
|
2020 |
|
||
Assets |
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
260.0 |
|
|
$ |
624.6 |
|
Accounts receivable, net |
|
978.3 |
|
|
|
885.2 |
|
Inventories, net |
|
1,084.5 |
|
|
|
871.4 |
|
Prepaid expenses and other current assets |
|
345.9 |
|
|
|
351.8 |
|
Current assets held for sale |
|
— |
|
|
|
243.8 |
|
Total current assets |
|
2,668.7 |
|
|
|
2,976.8 |
|
Property and equipment, net |
|
236.6 |
|
|
|
207.8 |
|
Goodwill |
|
1,760.9 |
|
|
|
1,756.1 |
|
Intangibles, net |
|
414.8 |
|
|
|
518.0 |
|
Operating lease assets |
|
399.2 |
|
|
|
376.2 |
|
Deferred income taxes, net |
|
64.5 |
|
|
|
— |
|
Other assets, net |
|
9.8 |
|
|
|
2.1 |
|
Non-current assets held for sale |
|
— |
|
|
|
1,120.5 |
|
Total assets |
$ |
5,554.5 |
|
|
$ |
6,957.5 |
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Accounts payable |
$ |
812.9 |
|
|
$ |
885.8 |
|
Accrued expenses |
|
546.7 |
|
|
|
507.3 |
|
Current operating lease liabilities |
|
88.5 |
|
|
|
84.0 |
|
Current finance lease liabilities |
|
5.0 |
|
|
|
2.4 |
|
Current portions of long-term debt/obligations |
|
10.0 |
|
|
|
12.3 |
|
Current liabilities held for sale |
|
— |
|
|
|
139.4 |
|
Total current liabilities |
|
1,463.1 |
|
|
|
1,631.2 |
|
Borrowings under revolving lines of credit, net |
|
— |
|
|
|
251.1 |
|
Long-term debt, net |
|
1,614.5 |
|
|
|
2,494.2 |
|
Deferred income taxes, net |
|
0.7 |
|
|
|
71.8 |
|
Non-current operating lease liabilities |
|
311.3 |
|
|
|
290.5 |
|
Non-current finance lease liabilities |
|
22.9 |
|
|
|
5.2 |
|
Non-current liabilities held for sale |
|
— |
|
|
|
53.4 |
|
Total liabilities |
|
3,412.5 |
|
|
|
4,797.4 |
|
|
|
|
|
|
|
||
Convertible Preferred Stock |
|
399.2 |
|
|
|
399.2 |
|
|
|
|
|
|
|
||
Stockholders' equity: |
|
|
|
|
|
||
Common stock |
|
0.7 |
|
|
|
0.7 |
|
Undesignated preferred stock |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,145.0 |
|
|
|
1,100.6 |
|
Retained earnings |
|
620.5 |
|
|
|
694.3 |
|
Accumulated other comprehensive income (loss) |
|
(23.4 |
) |
|
|
(34.7 |
) |
Total stockholders' equity |
|
1,742.8 |
|
|
|
1,760.9 |
|
Total liabilities and stockholders' equity |
$ |
5,554.5 |
|
|
$ |
6,957.5 |
|
-5-
BEACON ROOFING SUPPLY, INC.
Consolidated Statements of Cash Flows1
(Unaudited; in millions)
|
Year Ended September 30, |
|
|||||
|
2021 |
|
|
2020 |
|
||
Operating Activities |
|
|
|
|
|
||
Net income (loss) |
$ |
(45.5 |
) |
|
$ |
(80.9 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
175.2 |
|
|
|
391.1 |
|
Stock-based compensation |
|
22.6 |
|
|
|
17.2 |
|
Certain interest expense and other financing costs |
|
8.7 |
|
|
|
11.5 |
|
Loss on debt extinguishment |
|
60.2 |
|
|
|
14.7 |
|
Gain on sale of fixed assets and other |
|
(3.8 |
) |
|
|
(3.5 |
) |
Deferred income taxes |
|
(139.2 |
) |
|
|
(25.6 |
) |
Loss on sale of Interior Products |
|
360.6 |
|
|
|
— |
|
338(h)(10) election refund |
|
— |
|
|
|
(5.1 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
||
Accounts receivable |
|
(81.3 |
) |
|
|
78.4 |
|
Inventories |
|
(225.0 |
) |
|
|
73.4 |
|
Prepaid expenses and other current assets |
|
9.6 |
|
|
|
(73.6 |
) |
Accounts payable and accrued expenses |
|
(56.0 |
) |
|
|
72.2 |
|
Other assets and liabilities |
|
(8.1 |
) |
|
|
9.5 |
|
Net cash provided by (used in) operating activities |
|
78.0 |
|
|
|
479.3 |
|
|
|
|
|
|
|
||
Investing Activities |
|
|
|
|
|
||
Purchases of property and equipment |
|
(66.5 |
) |
|
|
(48.5 |
) |
Acquisition of businesses, net |
|
— |
|
|
|
5.1 |
|
Proceeds from sale of Interior Products |
|
836.0 |
|
|
|
— |
|
Proceeds from the sale of assets |
|
4.4 |
|
|
|
4.4 |
|
Net cash provided by (used in) investing activities |
|
773.9 |
|
|
|
(39.0 |
) |
|
|
|
|
|
|
||
Financing Activities |
|
|
|
|
|
||
Borrowings under revolving lines of credit |
|
252.3 |
|
|
|
2,038.0 |
|
Payments under revolving lines of credit |
|
(509.3 |
) |
|
|
(1,870.0 |
) |
Borrowings under term loan |
|
1,000.0 |
|
|
|
— |
|
Payments under term loan |
|
(948.3 |
) |
|
|
(9.7 |
) |
Borrowings under senior notes |
|
350.0 |
|
|
|
300.0 |
|
Payment under senior notes |
|
(1,300.0 |
) |
|
|
(309.6 |
) |
Payment of debt issuance costs |
|
(20.3 |
) |
|
|
(4.3 |
) |
Payment of call premium |
|
(31.7 |
) |
|
|
— |
|
Payments under equipment financing facilities and finance leases |
|
(6.5 |
) |
|
|
(8.6 |
) |
Payment of dividends on Preferred Stock |
|
(24.0 |
) |
|
|
(24.0 |
) |
Proceeds from issuance of common stock related to equity awards |
|
26.3 |
|
|
|
3.3 |
|
Payment of taxes related to net share settlement of equity awards |
|
(4.5 |
) |
|
|
(2.9 |
) |
Net cash provided by (used in) financing activities |
|
(1,216.0 |
) |
|
|
112.2 |
|
|
|
|
|
|
|
||
Effect of exchange rate changes on cash and cash equivalents |
|
(0.5 |
) |
|
|
(0.2 |
) |
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents |
|
(364.6 |
) |
|
|
552.3 |
|
Cash and cash equivalents, beginning of period |
|
624.6 |
|
|
|
72.3 |
|
Cash and cash equivalents, end of period |
$ |
260.0 |
|
|
$ |
624.6 |
|
|
|
|
|
|
|
||
Supplemental Cash Flow Information |
|
|
|
|
|
||
Operating cash flows provided by (used in) discontinued operations |
$ |
(28.2 |
) |
|
$ |
84.9 |
|
Investing cash flows provided by (used in) discontinued operations |
$ |
(2.5 |
) |
|
$ |
(7.5 |
) |
Cash paid during the period for: |
|
|
|
|
|
||
Interest |
$ |
120.0 |
|
|
$ |
130.3 |
|
Income taxes paid (received), net of refunds2 |
$ |
85.2 |
|
|
$ |
(5.4 |
) |
____________________
-6-
BEACON ROOFING SUPPLY, INC.
Consolidated Sales by Line of Business
(Unaudited; in millions)
Sales by Line of Business |
|
||||||||||||||||||||||
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|||||||||||||||
|
2021 |
|
|
2020 |
|
|
Change |
|
|||||||||||||||
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
||||||
Residential roofing products |
$ |
994.8 |
|
|
|
53.0 |
% |
|
$ |
964.6 |
|
|
|
55.0 |
% |
|
$ |
30.2 |
|
|
|
3.1 |
% |
Non-residential roofing products |
|
474.0 |
|
|
|
25.3 |
% |
|
|
442.8 |
|
|
|
25.2 |
% |
|
|
31.2 |
|
|
|
7.0 |
% |
Complementary building products |
|
406.6 |
|
|
|
21.7 |
% |
|
|
347.6 |
|
|
|
19.8 |
% |
|
|
59.0 |
|
|
|
17.0 |
% |
|
$ |
1,875.4 |
|
|
|
100.0 |
% |
|
$ |
1,755.0 |
|
|
|
100.0 |
% |
|
$ |
120.4 |
|
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales by Business Day1,2 |
|
||||||||||||||||||||||
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|||||||||||||||
|
2021 |
|
|
2020 |
|
|
Change |
|
|||||||||||||||
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
||||||
Residential roofing products |
$ |
15.5 |
|
|
|
53.0 |
% |
|
$ |
15.1 |
|
|
|
55.0 |
% |
|
$ |
0.4 |
|
|
|
3.1 |
% |
Non-residential roofing products |
|
7.4 |
|
|
|
25.3 |
% |
|
|
6.9 |
|
|
|
25.2 |
% |
|
|
0.5 |
|
|
|
7.0 |
% |
Complementary building products |
|
6.4 |
|
|
|
21.7 |
% |
|
|
5.4 |
|
|
|
19.8 |
% |
|
|
1.0 |
|
|
|
17.0 |
% |
|
$ |
29.3 |
|
|
|
100.0 |
% |
|
$ |
27.4 |
|
|
|
100.0 |
% |
|
$ |
1.9 |
|
|
|
6.9 |
% |
__________________________________________________
Sales by Line of Business |
|
||||||||||||||||||||||
|
Year Ended September 30, |
|
|
|
|
|
|
|
|||||||||||||||
|
2021 |
|
|
2020 |
|
|
Change |
|
|||||||||||||||
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
||||||
Residential roofing products |
$ |
3,516.2 |
|
|
|
53.0 |
% |
|
$ |
3,079.4 |
|
|
|
52.1 |
% |
|
$ |
436.8 |
|
|
|
14.2 |
% |
Non-residential roofing products |
|
1,688.8 |
|
|
|
25.4 |
% |
|
|
1,616.8 |
|
|
|
27.3 |
% |
|
|
72.0 |
|
|
|
4.5 |
% |
Complementary building products |
|
1,437.0 |
|
|
|
21.6 |
% |
|
|
1,220.5 |
|
|
|
20.6 |
% |
|
|
216.5 |
|
|
|
17.7 |
% |
|
$ |
6,642.0 |
|
|
|
100.0 |
% |
|
$ |
5,916.7 |
|
|
|
100.0 |
% |
|
$ |
725.3 |
|
|
|
12.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales by Business Day1,2 |
|
||||||||||||||||||||||
|
Year Ended September 30, |
|
|
|
|
|
|
|
|||||||||||||||
|
2021 |
|
|
2020 |
|
|
Change |
|
|||||||||||||||
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
||||||
Residential roofing products |
$ |
13.9 |
|
|
|
53.0 |
% |
|
$ |
12.1 |
|
|
|
52.1 |
% |
|
$ |
1.8 |
|
|
|
14.6 |
% |
Non-residential roofing products |
|
6.7 |
|
|
|
25.4 |
% |
|
|
6.4 |
|
|
|
27.3 |
% |
|
|
0.3 |
|
|
|
4.9 |
% |
Complementary building products |
|
5.7 |
|
|
|
21.6 |
% |
|
|
4.8 |
|
|
|
20.6 |
% |
|
|
0.9 |
|
|
|
18.2 |
% |
|
$ |
26.3 |
|
|
|
100.0 |
% |
|
$ |
23.3 |
|
|
|
100.0 |
% |
|
$ |
3.0 |
|
|
|
12.7 |
% |
__________________________________________________
-7-
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:
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.
-8-
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”):
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 |
|
|
Other (Income) Expense |
|
|
Income Taxes2 |
|
|
Total |
|
||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquisition costs |
$ |
0.9 |
|
|
$ |
25.0 |
|
|
$ |
1.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26.9 |
|
Restructuring costs |
|
2.8 |
|
|
|
— |
|
|
|
0.3 |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
3.0 |
|
COVID-19 impacts |
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
Total adjusting items |
$ |
4.1 |
|
|
$ |
25.0 |
|
|
$ |
1.3 |
|
|
$ |
(0.1 |
) |
|
$ |
— |
|
|
$ |
30.3 |
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquisition costs |
$ |
1.7 |
|
|
$ |
30.2 |
|
|
$ |
2.0 |
|
|
$ |
0.2 |
|
|
$ |
— |
|
|
$ |
34.1 |
|
Restructuring costs |
|
0.4 |
|
|
|
— |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
2.2 |
|
COVID-19 impacts |
|
0.7 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
0.6 |
|
Total adjusting items |
$ |
2.8 |
|
|
$ |
30.2 |
|
|
$ |
2.9 |
|
|
$ |
1.1 |
|
|
$ |
(0.1 |
) |
|
$ |
36.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquisition costs |
$ |
3.3 |
|
|
$ |
101.1 |
|
|
$ |
6.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
110.5 |
|
Restructuring costs3 |
|
9.4 |
|
|
|
2.2 |
|
|
|
2.7 |
|
|
|
60.3 |
|
|
|
— |
|
|
|
74.6 |
|
COVID-19 impacts |
|
1.6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.6 |
|
Total adjusting items |
$ |
14.3 |
|
|
$ |
103.3 |
|
|
$ |
8.8 |
|
|
$ |
60.3 |
|
|
$ |
— |
|
|
$ |
186.7 |
|
Year Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquisition costs4 |
$ |
9.6 |
|
|
$ |
119.3 |
|
|
$ |
8.0 |
|
|
$ |
(5.1 |
) |
|
$ |
— |
|
|
$ |
131.8 |
|
Restructuring costs5 |
|
2.3 |
|
|
|
142.6 |
|
|
|
3.6 |
|
|
|
21.5 |
|
|
|
— |
|
|
|
170.0 |
|
COVID-19 impacts6 |
|
4.2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.7 |
) |
|
|
3.5 |
|
Total adjusting items |
$ |
16.1 |
|
|
$ |
261.9 |
|
|
$ |
11.6 |
|
|
$ |
16.4 |
|
|
$ |
(0.7 |
) |
|
$ |
305.3 |
|
______________________________
-9-
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 September 30, |
|
|
Year Ended September 30, |
|
||||||||||
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Operating expense |
$ |
349.7 |
|
|
$ |
324.9 |
|
|
$ |
1,300.9 |
|
|
$ |
1,385.5 |
|
Acquisition costs |
|
(25.9 |
) |
|
|
(31.9 |
) |
|
|
(104.4 |
) |
|
|
(128.9 |
) |
Restructuring costs |
|
(2.8 |
) |
|
|
(0.4 |
) |
|
|
(11.6 |
) |
|
|
(144.9 |
) |
COVID-19 impacts |
|
(0.4 |
) |
|
|
(0.7 |
) |
|
|
(1.6 |
) |
|
|
(4.2 |
) |
Adjusted Operating Expense |
$ |
320.6 |
|
|
$ |
291.9 |
|
|
$ |
1,183.3 |
|
|
$ |
1,107.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
$ |
1,875.4 |
|
|
$ |
1,755.0 |
|
|
$ |
6,642.0 |
|
|
$ |
5,916.7 |
|
Operating expense as % of sales |
|
18.6 |
% |
|
|
18.5 |
% |
|
|
19.6 |
% |
|
|
23.4 |
% |
Adjusted Operating Expense as % of sales |
|
17.1 |
% |
|
|
16.6 |
% |
|
|
17.8 |
% |
|
|
18.7 |
% |
Adjusted Net Income (Loss)
The following table presents a reconciliation of net income (loss) from continuing operations, 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 September 30, |
|
|
Year Ended September 30, |
|
||||||||||
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Net income (loss) from continuing operations |
$ |
104.5 |
|
|
$ |
68.2 |
|
|
$ |
221.2 |
|
|
$ |
(81.3 |
) |
Adjusting items: |
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition costs |
|
26.9 |
|
|
|
34.1 |
|
|
|
110.5 |
|
|
|
131.8 |
|
Restructuring costs |
|
3.0 |
|
|
|
2.2 |
|
|
|
74.6 |
|
|
|
170.0 |
|
COVID-19 impacts |
|
0.4 |
|
|
|
0.6 |
|
|
|
1.6 |
|
|
|
3.5 |
|
Total adjusting items |
|
30.3 |
|
|
|
36.9 |
|
|
|
186.7 |
|
|
|
305.3 |
|
Less: tax impact of adjusting items1 |
|
(7.7 |
) |
|
|
(14.4 |
) |
|
|
(47.8 |
) |
|
|
(78.2 |
) |
Total adjustments, net of tax |
|
22.6 |
|
|
|
22.5 |
|
|
|
138.9 |
|
|
|
227.1 |
|
Adjusted Net Income (Loss) |
$ |
127.1 |
|
|
$ |
90.7 |
|
|
$ |
360.1 |
|
|
$ |
145.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
$ |
1,875.4 |
|
|
$ |
1,755.0 |
|
|
$ |
6,642.0 |
|
|
$ |
5,916.7 |
|
Net income (loss) as % of sales |
|
5.6 |
% |
|
|
3.9 |
% |
|
|
3.3 |
% |
|
|
(1.4 |
%) |
Adjusted Net Income (Loss) as % of sales |
|
6.8 |
% |
|
|
5.2 |
% |
|
|
5.4 |
% |
|
|
2.5 |
% |
______________________________
-10-
BEACON ROOFING SUPPLY, INC.
Non-GAAP Financial Measures (continued)
(Unaudited; in millions)
Adjusted EBITDA
The following table presents a reconciliation of net income (loss) from continuing operations, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated:
|
Three Months Ended September 30, |
|
|
Year Ended September 30, |
|
||||||||||
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Net income (loss) from continuing operations |
$ |
104.5 |
|
|
$ |
68.2 |
|
|
$ |
221.2 |
|
|
$ |
(81.3 |
) |
Interest expense, net |
|
17.1 |
|
|
|
32.5 |
|
|
|
101.0 |
|
|
|
138.4 |
|
Income taxes |
|
37.3 |
|
|
|
16.9 |
|
|
|
77.3 |
|
|
|
(27.0 |
) |
Depreciation and amortization |
|
40.3 |
|
|
|
43.9 |
|
|
|
162.2 |
|
|
|
320.0 |
|
Stock-based compensation |
|
4.9 |
|
|
|
3.6 |
|
|
|
18.4 |
|
|
|
16.0 |
|
Acquisition costs1 |
|
0.9 |
|
|
|
1.9 |
|
|
|
3.3 |
|
|
|
4.5 |
|
Restructuring costs1 |
|
2.7 |
|
|
|
1.3 |
|
|
|
69.7 |
|
|
|
23.8 |
|
COVID-19 impacts1 |
|
0.4 |
|
|
|
0.7 |
|
|
|
1.6 |
|
|
|
4.2 |
|
Adjusted EBITDA |
$ |
208.1 |
|
|
$ |
169.0 |
|
|
$ |
654.7 |
|
|
$ |
398.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
$ |
1,875.4 |
|
|
$ |
1,755.0 |
|
|
$ |
6,642.0 |
|
|
$ |
5,916.7 |
|
Net income (loss) as % of sales |
|
5.6 |
% |
|
|
3.9 |
% |
|
|
3.3 |
% |
|
|
(1.4 |
%) |
Adjusted EBITDA as % of sales |
|
11.1 |
% |
|
|
9.6 |
% |
|
|
9.9 |
% |
|
|
6.7 |
% |
______________________________
-11-
NOVEMBER 18, 2021 2021 4TH QUARTER & FISCAL 2021 EARNINGS CALL Exhibit 99.2
Disclosure notice This presentation 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 September 30, 2020 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 presentation are qualified by the factors, risks and uncertainties contained therein. In addition, the forward-looking statements included in this presentation represent the Company's views as of the date of this presentation 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 presentation. This presentation contains references to certain financial measures that are not presented in accordance with United States Generally Accepted Accounting Principles (“GAAP"). The Company uses non-GAAP financial measures to evaluate financial performance, analyze underlying business trends and establish operational goals and forecasts that are used when allocating resources. The Company believes these non-GAAP financial measures 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 the Company believes these measures are useful to investors when evaluating performance, they are not prepared and presented in accordance with GAAP, and therefore should be considered supplemental in nature. The Company’s non-GAAP financial 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. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure can be found in the Appendix as well as Company’s latest Form 8-K, filed with the SEC on November 18, 2021.
President & chief executive officer Julian francis
Generated record net sales, net income and Adjusted EBITDA* Capturing market tailwinds and leveraged price execution, while managing costs Successfully navigating challenging supply chains to effectively serve our customers Produced organic growth across all three lines of business (LOB) Created new analytics to support sales, pricing and operations at a local level Focus on bottom quintile branches yielded results with sales growth ~15% YoY & >$50M bottom line contribution in FY’21 Successfully closed divestiture of Interior Products business Returned Beacon to exteriors focus with significant exposure to attractive non-discretionary R&R and residential markets Strengthened balance sheet providing capacity to invest in growth Divestiture proceeds & refi transactions provided for debt reduction, lengthened maturities, lower cash interest Filled and onboarded key leadership positions and sharpened focus on strategic initiatives Additions of high-caliber talent at executive level and across the organization Four strategic initiatives designed to improve growth, efficiency and profitability drove tangible results Enhanced ESG efforts and continued to work safely during COVID resurgence Renewed our core values, reduced our carbon footprint and recognized diverse leaders in our industry Reflections on FY’21 *Non-GAAP measure; see Appendix for definition and reconciliation Note: All full year information and comparisons reflect Continuing Operations Transformational actions in FY’21 have set the stage for our long-term ambition
4th quarter Highlights Record fourth quarter net sales, net income and Adjusted EBITDA* Sales growth vs. strong prior year comparable that included record shingle volumes Focused execution and significant gross margin expansion YoY Ended Q4’21 with a growing backlog Adjusted EBTIDA* of $208M, up ~23% YoY Net sales up ~7% YoY with growth in all three LOBs & favorable price execution Working jointly with vendors is key to success in challenging supply chain environment Gross margins up 200 bps YoY; Continued OpEx discipline 2nd consecutive quarter with MSD net income margin and DD Adj. EBITDA* margin Continued to build a culture based on our values 3rd annual Beacon of Hope contest improving the lives of Veterans Inaugural Robert R. Buck Scholarship assists children of employees achieve potential Acquired Midway Wholesale on November 1st Premier distributor in the Central Midwest incl the fast-growing Kansas City MSA 10 locations across KS, MO and NE expanding our footprint to key Midwest markets Annual sales of ~$130M with a strong track record of quality & reliability 11.1% 9.6% *Non-GAAP measure; see Appendix for definition and reconciliation Note: All quarterly information and comparisons reflect Continuing Operations 6.8% 5.2% 5.6% 3.9%
Strategic initiatives Pricing analytics & execution support capabilities Targeted strategies focused on winning high-growth segments Organic Growth Branch Operating Performance Improve operating performance of lowest quintile branches Drive operating efficiencies across network Raise customer service levels Develop high caliber talent in logistics & field operations Opportunity for $50-100M inventory reduction Beacon OTC® Network Most complete digital offering within building products distribution Important value-add for customers Digital Platform Customer retention & new account focus contributed to top-line growth YoY National accounts up ~25% in FY’21 led by our homebuilding customers ~50% growth in active users versus prior year quarter FY’21 digital sales achieved ~13% of total; Ahead of prior year exit rate Launched PRO+ & becn.com integrated digital experience State-of-the-art Houston hub opened in October with product flow designed for efficiency and capacity EPA SmartWay Partner status accelerating adoption of fuel-saving practices Bottom quintile branch initiative driving improvement across the P&L FY’21 sales growth faster than the company rate and contributed >$50M bottom line improvement Strategies focused on achieving top-line growth and bottom-line efficiency
Executive vice president & chief financial officer Frank lonegro
Q4 Sales and MIX Sales growth of ~7% Sales growth across all three lines of business Higher prices offset volume decline vs. strong prior year comp Strong market fundamentals and growing backlog Residential sales up ~3% Price execution; R&R and new construction demand continues Sales up ~50% with large homebuilding customers; New construction cycle-times continue to elongate Volumes decreased vs. PY record shingle comparable, driven by COVID-19 snapback and higher storm/hail demand in PYQ Non-residential sales up ~7% Price realization offset inflation Continuing to experience long lead times & challenging supply chains Complementary sales up ~17% Higher prices across nearly all products ~80% exposure to residential market +3.1% +7.0% +17.0% +6.9%
Q4 Margin & expense Gross margin +200 bps YoY Pricing execution and favorable timing benefit Price-cost ~220 bps favorable; Partially offset by sales mix Adj. OpEx* increased by $29M YoY Higher incentive comp, selling expenses and inflation (e.g., wage, fuel, lease) Cycling certain temp cost actions taken in 2020 in response to COVID-19 (e.g., T&E) Filling vacancies / retaining drivers; Staffed to meet growing backlog Labor productivity up ~50% from pre-pandemic levels **Hours worked reflect all company-wide hourly employees, but exclude salaried/commission-based personnel Note: All quarterly information and comparisons reflect Continuing Operations *Non-GAAP measure; see Appendix for definition and reconciliation 16.6% 17.1% 18.6% 18.5%
$300 $350 $1,000 $0 STRENGTHENED FINANCIAL FLEXIBILITY Solid cash flow and strong liquidity Q4’21 Adjusted OCF* $167M Invested in inventory to meet growing backlog Reset of days payable to pre-COVID levels Higher AR balances due to stronger sales ~$1.5B liquidity (undrawn ABL capacity + cash) Expect transition period OCF to be positive vs. typical quarterly cash use De-risked balance sheet Net debt leverage* of 2.1x No meaningful debt due until 2026 Enabling strategic investments Three greenfield branches in FY’21 in rapidly growing TX and FL markets Opened Houston Hub in October Midway Wholesale acquisition on November 1st; 10 locations across KS, MO and NE Significant ability to invest in value-creating growth opportunities *Non-GAAP measure; see Appendix for definition and reconciliation **All periods presented are balances from continuing operations only ***Calculation for these periods include amounts derived from combined operations – see slide 18 for further detail ****Calendar year maturities shown as of Q4’21; excl impact of debt issuance cost amortization & required $10M annual paydown of Term Loan
President & chief executive officer Julian francis
Expect transition period (CY’Q4) net sales growth of +MSD YoY including the benefits of the 11/1 acquisition of Midway Wholesale Underlying fundamentals in residential remain positive Growing commercial backlog and solid demand trends Continuing to experience supply chain challenges & lengthening project cycle times CY’Q4 gross margins expected to be up ~100 bps vs. the prior year period Continuing benefit of price execution Higher non-residential & complementary mix YoY Expect strong finish to calendar year 2021 (CY’21) CY’Q4 Adjusted EBITDA* expected to be $155M – 165M vs. $143M PYQ (~+8 – 15%) CY’21 Adjusted EBITDA* expected to be $667M – $677M vs. $465M CY’20 (~+43 – 46%) Closing thoughts *Non-GAAP measure; see Appendix for definition and reconciliation Note: All quarterly information, forecasts and comparisons reflect Continuing Operations Beacon is strategically and financially positioned for continued growth
Reconciliations: non-gaap financial measures FY2020-2021 results by Quarter (Continuing operations) We define Adjusted Operating Expense as operating expense (as reported on a GAAP basis) excluding the impact of amortization, acquisition costs, restructuring costs, and costs directly related to the COVID-19 pandemic. We define Adjusted EBITDA as net income (loss) from continuing operations excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, acquisition costs, restructuring costs, and costs directly related to the COVID-19 pandemic. * Q2 2020 amounts include the impact of non-cash accelerated intangible asset amortization of $142.6 million related to the write-off of certain trade names in connection with the Company’s rebranding efforts. For additional information see our latest Form 8-K, filed with the SEC on November 18, 2021.
Reconciliations: non-gaap financial measures CY2020-2021 results (Continuing operations) These tables are presented to provide comparative results in accordance with the Company’s publicly announced transition to a December 31 fiscal year-end that will commence with the fiscal year beginning on January 1, 2022. For additional detail by quarter for each period, see slide 15. We define Adjusted Operating Expense as operating expense (as reported on a GAAP basis) excluding the impact of amortization, acquisition costs, restructuring costs, and costs directly related to the COVID-19 pandemic. We define Adjusted EBITDA as net income (loss) from continuing operations excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, acquisition costs, restructuring costs, and costs directly related to the COVID-19 pandemic.
Reconciliations: non-gaap financial measures ADJUSTED OPERATING CASH FLOW We define Adjusted Operating Cash Flow as net cash provided by (used in) operating activities (as calculated on a GAAP basis) excluding the impact of discontinued operations and other non-recurring cash activity related to the Company’s divestiture of its Interior Products business to Foundation Building Materials (“FBM”). * Cash collected on behalf of, and due to, FBM as part of the ongoing transaction services agreement.
Reconciliations: non-gaap financial measures Net debt leverage We define Net Debt Leverage as gross total debt less cash, divided by Adjusted EBITDA for the trailing four quarters. * Historical quarterly Adjusted EBITDA totals used in the calculation of Net Debt Leverage are presented on an as-reported basis, therefore the calculations for the periods ended March 31, June 30, and September 30, 2020 are based on Adjusted EBITDA from combined operations (see slide 19 for reconciliations). Beginning with the period ended December 31, 2020, the Company began presenting its Interior Products business as discontinued operations, therefore the calculations of Net Debt Leverage for the periods ended December 31, 2020 and March 31, June 30, and September 30, 2021 are based on Adjusted EBITDA from continuing operations (see slide 15 for reconciliations).
Reconciliations: non-gaap financial measures FY2019-2020 results by Fiscal Quarter (combined operations) This table is presented for purposes of reconciling Adjusted EBITDA amounts utilized in the calculation of Net Debt Leverage for historical periods presented on slide 18. 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, acquisition costs, restructuring costs, and costs directly related to the COVID-19 pandemic. * Q2 2020 amounts include the impact of non-cash accelerated intangible asset amortization of $142.6 million related to the write-off of certain trade names in connection with the Company’s rebranding efforts.
Reconciliations: non-gaap financial measures *Composed of Acquisition costs, Restructuring costs and COVID-19 impacts. TRANSITION PERIOD AND CY’2021 guidance: Adjusted ebitda
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