- Record fourth quarter net income and Adjusted
EBITDA
- Fourth quarter net sales leveraged an attractive residential
backdrop, and stronger gross margins benefited from pricing
execution, mix and timing
- Strategic initiatives contributed to Q4 success, highlighted
by digital sales and margin gains at lowest quintile
branches
- Strong fiscal 2020 operating cash flow of $479 million
enabled repayment of COVID-related ABL draw
Beacon (Nasdaq: BECN) (the “Company”) announced results today
for its fourth quarter and fiscal year ended September 30, 2020
(“2020”).
Fourth Quarter and Fiscal Year Financial Highlights
Q4 2020
Q4 2019
FY 2020
FY 2019
(Unaudited; $ in millions, except per
share amounts)
Net sales
$
2,017.8
$
2,029.9
$
6,943.9
$
7,105.2
Gross profit
$
514.0
$
493.5
$
1,699.2
$
1,736.6
Gross margin %
25.5
%
24.3
%
24.5
%
24.4
%
Operating expense
$
392.8
$
403.6
$
1,664.1
$
1,588.8
% of net sales
19.5
%
19.9
%
24.0
%
22.4
%
Adjusted Operating Expense1
$
345.8
$
345.9
$
1,327.0
$
1,352.5
% of net sales1
17.1
%
17.0
%
19.1
%
19.0
%
Net income (loss)
$
71.9
$
27.4
$
(80.9
)
$
(10.6
)
% of net sales
3.6
%
1.3
%
(1.2
%)
(0.1
%)
Adjusted Net Income (Loss)1
$
104.7
$
82.0
$
190.1
$
176.2
Adjusted EBITDA1
$
190.9
$
169.1
$
471.6
$
476.0
% of net sales1
9.5
%
8.3
%
6.8
%
6.7
%
Net income (loss) per share - diluted
$
0.83
$
0.27
$
(1.52
)
$
(0.51
)
______________________
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.
“Strong execution by our team and a favorable residential
backdrop drove record fourth quarter Adjusted EBITDA,” said Julian
Francis, Beacon’s President and Chief Executive Officer.
“Mid-single digit growth in residential roofing helped to offset
softness in the non-residential product categories stemming from
the continuing economic impact of COVID. Within this dynamic
environment, we are intensely focused on selling activity and
leveraging our leading digital platform that accounted for more
than 10% of September sales. Q4 gross margins increased
significantly compared to the prior year, and I was particularly
pleased with how we executed on the price increases mid-quarter.
Operating cost discipline was again evident in the quarter, and we
continued to improve the profitability of our lowest quintile
branches compared to the prior year. Record second half 2020
operating cash flow strengthened our financial position giving us
the ability and the confidence to repay the ABL draw we implemented
in March as COVID began impacting our business. As fiscal year 2021
begins, we are grateful for the dedication and tireless efforts of
our employees, as we continue to focus on improving the
controllable aspects of our business and driving towards realizing
our full potential.”
Fourth Quarter
Company-wide sales reflect positive contributions from
residential demand and from those states less impacted by the
pandemic, offset by softer demand from non-residential categories
and states more heavily impacted by COVID. Net sales decreased 0.6%
compared to the prior year. Residential roofing product sales
increased 6.2%, non-residential roofing product sales decreased
11.7%, and complementary product sales decreased 1.5% compared to
the prior year. The fourth quarter of fiscal years 2020 and 2019
each had 64 business days.
Gross margin improved 120 basis points from 24.3% in the prior
year to 25.5%, primarily reflecting an improved price-cost spread.
Operating expense decreased compared to the prior year. Adjusted
operating expense was flat compared to the prior year period as
management’s effective cost control during the COVID-19 pandemic
was partially offset by higher incentive compensation.
Net income (loss) was $71.9 million, compared to $27.4 million
in 2019. Net income (loss) attributable to common shareholders was
$65.9 million, compared to $21.4 million in 2019. Adjusted Net
Income (Loss) was $104.7 million, compared to $82.0 million in
2019. EPS was $0.83, compared to $0.27 in 2019. Comparative fourth
quarter results were driven primarily by higher gross margins, the
impact of operating cost controls on the current period and reduced
other non-operating expense. These impacts were partially offset by
sales declines within non-residential end markets.
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.
Fiscal Year
Net sales decreased 2.3% compared to the prior year. Residential
roofing product sales increased 0.6%, non-residential roofing
product sales decreased 3.4%, and complementary product sales
decreased 5.3% compared to the prior year. Fiscal years 2020 and
2019 had 254 and 253 business days, respectively.
Gross margin improved from 24.4% in the prior year to 24.5%.
Operating expense increased compared to the prior year, primarily
from the write-off of certain trade names in connection with the
Company’s rebranding efforts, partially offset by management’s
effective cost control during the COVID-19 pandemic. Adjusted
operating expense decreased compared to 2019, primarily as a result
of management’s cost control.
Net income (loss) was $(80.9) million, compared to $(10.6)
million in 2019. Net income (loss) attributable to common
shareholders was $(104.9) million, compared to $(34.6) million in
2019. Adjusted Net Income (Loss) was $190.1 million, compared to
$176.2 million in 2019. EPS was $(1.52), compared to $(0.51) in
2019.
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 Fiscal
Year 2020 Earnings Call
When:
Thursday, November 19, 2020
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. 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, 2019 and Form 10-Q for the quarter ended
June 30, 2020. 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 500 branches throughout
all 50 states in the U.S. and 6 provinces in Canada. Beacon serves
an extensive base of over 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
www.becn.com
BEACON ROOFING SUPPLY,
INC.
Consolidated Statements of
Operations
(Unaudited; in millions, except
per share amounts)
Three Months Ended September
30,
Year Ended September
30,
2020
% of
Net Sales
2019
% of Net Sales
2020
% of Net Sales
2019
% of Net Sales
Net sales
$
2,017.8
100.0
%
$
2,029.9
100.0
%
$
6,943.9
100.0
%
$
7,105.2
100.0
%
Cost of products sold
1,503.8
74.5
%
1,536.4
75.7
%
5,244.7
75.5
%
5,368.6
75.6
%
Gross profit
514.0
25.5
%
493.5
24.3
%
1,699.2
24.5
%
1,736.6
24.4
%
Operating expense:
Selling, general and administrative
332.2
16.5
%
334.1
16.5
%
1,273.0
18.3
%
1,311.0
18.4
%
Depreciation
16.5
0.8
%
17.9
0.9
%
70.1
1.0
%
70.7
1.0
%
Amortization
44.1
2.2
%
51.6
2.5
%
321.0
4.7
%
207.1
2.9
%
Total operating expense
392.8
19.5
%
403.6
19.9
%
1,664.1
24.0
%
1,588.8
22.3
%
Income (loss) from operations
121.2
6.0
%
89.9
4.4
%
35.1
0.5
%
147.8
2.1
%
Interest expense, financing costs, and
other
31.2
1.5
%
41.7
2.0
%
128.1
1.9
%
158.6
2.2
%
Loss on debt extinguishment
—
0.0
%
—
0.0
%
14.7
0.2
%
—
0.0
%
Income (loss) before provision for income
taxes
90.0
4.5
%
48.2
2.4
%
(107.7
)
(1.6
%)
(10.8
)
(0.1
%)
Provision for (benefit from) income
taxes
18.1
0.9
%
20.8
1.1
%
(26.8
)
(0.4
%)
(0.2
)
0.0
%
Net income (loss)
71.9
3.6
%
27.4
1.3
%
(80.9
)
(1.2
%)
(10.6
)
(0.1
%)
Dividends on Preferred Stock
6.0
0.3
%
6.0
0.2
%
24.0
0.3
%
24.0
0.4
%
Net income (loss) attributable to common
shareholders
$
65.9
3.3
%
$
21.4
1.1
%
$
(104.9
)
(1.5
%)
$
(34.6
)
(0.5
%)
Weighted-average common stock
outstanding:
Basic
68.9
68.5
68.8
68.4
Diluted1
69.6
69.3
68.8
68.4
Net income (loss) per share2:
Basic
$
0.84
$
0.27
$
(1.52
)
$
(0.51
)
Diluted
$
0.83
$
0.27
$
(1.52
)
$
(0.51
)
____________________________________
1
Amounts do not include 9.7 million shares
issuable upon conversion of the Company’s participating Preferred
Stock because such conversion would be anti-dilutive.
2
Basic net income (loss) per share is
calculated by dividing net income (loss) attributable to common
shareholders by the weighted-average number of common shares
outstanding during the period, without consideration for common
share equivalents or the conversion of Preferred Stock. Common
share equivalents consist of the incremental common shares issuable
upon the exercise of stock options and vesting of restricted stock
unit awards. Diluted net income (loss) per common share is
calculated by dividing net income (loss) attributable to common
shareholders by the fully diluted weighted-average number of common
shares outstanding during the period. The following table presents
the components and calculations of basic and diluted net income
(loss) per share for each period presented:
Three Months Ended September
30,
Year Ended September
30,
2020
2019
2020
2019
Net income (loss)
$
71.9
$
27.4
$
(80.9
)
$
(10.6
)
Dividends on Preferred Stock
6.0
6.0
24.0
24.0
Net income (loss) attributable to common
shareholders
$
65.9
$
21.4
$
(104.9
)
$
(34.6
)
Undistributed income allocated to
participating securities
(8.1
)
(3.1
)
—
—
Net income (loss) attributable to common
shareholders - basic and diluted
$
57.8
$
18.3
$
(104.9
)
$
(34.6
)
Weighted-average common shares outstanding
- basic
68.9
68.5
68.8
68.4
Effect of common share equivalents
0.7
0.8
—
—
Weighted-average common shares outstanding
- diluted
69.6
69.3
68.8
68.4
Net income (loss) per share - basic
$
0.84
$
0.27
$
(1.52
)
$
(0.51
)
Net income (loss) per share - diluted
$
0.83
$
0.27
$
(1.52
)
$
(0.51
)
BEACON ROOFING SUPPLY,
INC.
Consolidated Balance
Sheets
(Unaudited; in millions)
September 30,
September 30,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
624.6
$
72.3
Accounts receivable, net
1,029.3
1,108.1
Inventories, net
944.6
1,018.2
Prepaid expenses and other current
assets
378.3
315.6
Total current assets
2,976.8
2,514.2
Property and equipment, net
243.7
260.4
Goodwill
2,490.4
2,490.6
Intangibles, net
801.2
1,125.5
Operating lease assets
443.3
—
Other assets, net
2.1
2.1
Total assets
$
6,957.5
$
6,392.8
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
954.6
$
822.9
Accrued expenses
563.8
599.2
Current operating lease liabilities
100.5
—
Current portions of long-term
debt/obligations
12.3
18.7
Total current liabilities
1,631.2
1,440.8
Borrowings under revolving lines of
credit, net
251.1
81.0
Long-term debt, net
2,494.2
2,494.6
Deferred income taxes, net
74.0
103.9
Non-current operating lease
liabilities
340.4
—
Long-term obligations under equipment
financing, net
—
4.6
Other long-term liabilities
6.5
6.4
Total liabilities
4,797.4
4,131.3
Convertible Preferred Stock
399.2
399.2
Stockholders' equity:
Common stock
0.7
0.7
Undesignated preferred stock
—
—
Additional paid-in capital
1,100.6
1,083.0
Retained earnings
694.3
799.2
Accumulated other comprehensive income
(loss)
(34.7
)
(20.6
)
Total stockholders' equity
1,760.9
1,862.3
Total liabilities and stockholders'
equity
$
6,957.5
$
6,392.8
BEACON ROOFING SUPPLY,
INC.
Consolidated Statements of
Cash Flows
(Unaudited; in millions)
Year Ended September
30,
2020
2019
Operating Activities
Net income (loss)
$
(80.9
)
$
(10.6
)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
391.1
277.8
Stock-based compensation
17.2
16.4
Certain interest expense and other
financing costs
11.5
12.1
Beneficial lease amortization
—
2.3
Loss on debt extinguishment
14.7
—
Gain on sale of fixed assets and other
(3.5
)
(3.8
)
Deferred income taxes
(25.6
)
(2.6
)
338(h)(10) election refund
(5.1
)
—
Changes in operating assets and
liabilities:
Accounts receivable
78.4
(18.5
)
Inventories
73.4
(82.8
)
Prepaid expenses and other current
assets
(73.6
)
(70.8
)
Accounts payable and accrued expenses
72.2
92.1
Other assets and liabilities
9.5
1.1
Net cash provided by (used in) operating
activities
479.3
212.7
Investing Activities
Purchases of property and equipment
(48.5
)
(57.0
)
Acquisition of businesses, net
5.1
(164.0
)
Proceeds from the sale of assets
4.4
9.3
Net cash provided by (used in) investing
activities
(39.0
)
(211.7
)
Financing Activities
Borrowings under revolving lines of
credit
2,038.0
2,100.1
Payments under revolving lines of
credit
(1,870.0
)
(2,114.0
)
Payments under term loan
(9.7
)
(9.7
)
Borrowings under senior notes
300.0
—
Payment under senior notes
(309.6
)
—
Payment of debt issuance costs
(4.3
)
(0.8
)
Payments under equipment financing
facilities and finance leases
(8.6
)
(10.0
)
Payment of dividends on Preferred
Stock
(24.0
)
(24.0
)
Proceeds from issuance of common stock
related to equity awards
3.3
3.3
Payment of taxes related to net share
settlement of equity awards
(2.9
)
(3.7
)
Net cash provided by (used in) financing
activities
112.2
(58.8
)
Effect of exchange rate changes on cash
and cash equivalents
(0.2
)
0.2
Net increase (decrease) in cash and cash
equivalents
552.3
(57.6
)
Cash and cash equivalents, beginning of
period
72.3
129.9
Cash and cash equivalents, end of
period
$
624.6
$
72.3
BEACON ROOFING SUPPLY,
INC.
Consolidated Sales by Product
Line
(Unaudited; in millions)
Sales by Product Line
Three Months Ended September
30,
2020
2019
Change
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
968.6
48.0
%
$
912.2
44.9
%
$
56.4
6.2
%
Non-residential roofing products
446.0
22.1
%
505.1
24.9
%
(59.1
)
(11.7
%)
Complementary building products
603.2
29.9
%
612.6
30.2
%
(9.4
)
(1.5
%)
$
2,017.8
100.0
%
$
2,029.9
100.0
%
$
(12.1
)
(0.6
%)
Sales by Business
Day1,2
Three Months Ended September
30,
2020
2019
Change
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
15.1
48.0
%
$
14.2
44.9
%
$
0.9
6.2
%
Non-residential roofing products
7.0
22.1
%
7.9
24.9
%
(0.9
)
(11.7
%)
Complementary building products
9.4
29.9
%
9.6
30.2
%
(0.2
)
(1.5
%)
$
31.5
100.0
%
$
31.7
100.0
%
$
(0.2
)
(0.6
%)
__________________________________________________
1
The fourth quarter of fiscal years 2020
and 2019 each had 64 business days.
2
Dollar and percentage changes may not
recalculate due to rounding.
Sales by Product Line
Year Ended September
30,
2020
2019
Change
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
3,099.6
44.7
%
$
3,079.6
43.3
%
$
20.0
0.6
%
Non-residential roofing products
1,646.6
23.7
%
1,705.2
24.0
%
(58.6
)
(3.4
%)
Complementary building products
2,197.7
31.6
%
2,320.4
32.7
%
(122.7
)
(5.3
%)
$
6,943.9
100.0
%
$
7,105.2
100.0
%
$
(161.3
)
(2.3
%)
Sales by Business
Day1,2
Year Ended September
30,
2020
2019
Change
Net Sales
Mix %
Net Sales
Mix %
$
%
Residential roofing products
$
12.2
44.7
%
$
12.2
43.3
%
$
—
0.3
%
Non-residential roofing products
6.5
23.7
%
6.7
24.0
%
(0.2
)
(3.8
%)
Complementary building products
8.6
31.6
%
9.2
32.7
%
(0.6
)
(5.7
%)
$
27.3
100.0
%
$
28.1
100.0
%
$
(0.8
)
(2.7
%)
__________________________________________________
1
Fiscal years 2020 and 2019 had 254 and 253
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 are related. 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 are excluded
from each of our non-GAAP measures (the “adjusting items”):
- Acquisition costs. Represents 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; and amortization of debt issuance costs.
- Restructuring costs. Represents costs stemming from headcount
rationalization efforts and certain rebranding costs; accrued
estimated costs related to employee benefit plan withdrawals; and
amortization of debt issuance costs and loss on debt
extinguishment.
- COVID-19 impact. Represents costs directly related to our
response to the COVID-19 pandemic; and income tax provision
(benefit) stemming from the revaluation of deferred tax assets and
liabilities made in conjunction with the Company’s application of
the CARES Act.
- Effects of tax reform. Represents income tax provision
(benefit) related to the Tax Cuts and Jobs Act of 2017.
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
Selling, General and
Administrative
Amortization
Interest Expense
Other (Income) Expense
Income Taxes1
Total
Three Months Ended September 30,
2020
Acquisition costs
$
1.7
$
44.1
$
2.1
$
0.1
$
—
$
48.0
Restructuring costs
0.4
—
0.9
0.8
—
2.1
COVID-19 impact
0.8
—
—
—
(0.1
)
0.7
Total adjusting items
$
2.9
$
44.1
$
3.0
$
0.9
$
(0.1
)
$
50.8
Three Months Ended September 30,
2019
Acquisition costs
$
3.8
$
51.5
$
3.0
$
—
$
—
$
58.3
Restructuring costs
2.4
—
—
3.3
—
5.7
Total adjusting items
$
6.2
$
51.5
$
3.0
$
3.3
$
—
$
64.0
Year Ended September 30, 2020
Acquisition costs2
$
9.6
$
178.4
$
8.1
$
(5.1
)
$
—
$
191.0
Restructuring costs3
2.3
142.6
3.5
21.5
—
169.9
COVID-19 impact
4.2
—
—
—
(0.7
)
3.5
Total adjusting items
$
16.1
$
321.0
$
11.6
$
16.4
$
(0.7
)
$
364.4
Year Ended September 30, 2019
Acquisition costs
$
25.1
$
207.1
$
12.1
$
—
$
—
$
244.3
Restructuring costs
4.1
—
—
3.3
—
7.4
Effects of tax reform
—
—
—
—
(0.5
)
(0.5
)
Total adjusting items
$
29.2
$
207.1
$
12.1
$
3.3
$
(0.5
)
$
251.2
______________________________
1
For tax impact of adjusting items, see
Adjusted Net Income (Loss) table below.
2
Other (Income) Expense includes a net $5.1
million refund received as the final true-up of the $164.0 million
payment resulting from the 338(h)(10) election made in connection
with the acquisition of Allied Building Products Corp. on January
2, 2018.
3
Amortization includes 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. Other (Income) Expense
includes a loss on debt extinguishment of $14.7 million in
connection with the October 2019 debt refinancing.
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,
2020
2019
2020
2019
Operating expense
$
392.8
$
403.6
$
1,664.1
$
1,588.8
Acquisition costs
(45.8
)
(55.3
)
(188.0
)
(232.2
)
Restructuring costs
(0.4
)
(2.4
)
(144.9
)
(4.1
)
COVID-19 impact
(0.8
)
—
(4.2
)
—
Adjusted Operating Expense
$
345.8
$
345.9
$
1,327.0
$
1,352.5
Net sales
$
2,017.8
$
2,029.9
$
6,943.9
$
7,105.2
Operating expense as % of sales
19.5
%
19.9
%
24.0
%
22.4
%
Adjusted Operating Expense as % of
sales
17.1
%
17.0
%
19.1
%
19.0
%
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 September
30,
Year Ended September
30,
2020
2019
2020
2019
Net income (loss)
$
71.9
$
27.4
$
(80.9
)
$
(10.6
)
Adjusting items:
Acquisition costs
48.0
58.3
191.0
244.3
Restructuring costs
2.1
5.7
169.9
7.4
COVID-19 impact
0.7
—
3.5
—
Effects of tax reform
—
—
—
(0.5
)
Total adjusting items
50.8
64.0
364.4
251.2
Less: tax impact of adjusting items1
(18.0
)
(9.4
)
(93.4
)
(64.4
)
Total adjustments, net of tax
32.8
54.6
271.0
186.8
Adjusted Net Income (Loss)
$
104.7
$
82.0
$
190.1
$
176.2
______________________________
1
Amounts represent tax impact on adjusting
items that are not included in the Company’s income tax provision
(benefit) for the periods presented. The effective tax rate applied
to these adjusting items is calculated by using adjusted pre-tax
income while factoring in discrete tax adjustments for the fiscal
year. The tax impact of adjusting items for the three months ended
September 30, 2020 and 2019 were calculated using a blended
effective tax rate of 35.4% and 14.7%, respectively. The tax impact
of adjusting items for the years ended September 30, 2020 and 2019
were calculated using an effective tax rate of 25.6% and 25.6%,
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 September
30,
Year Ended September
30,
2020
2019
2020
2019
Net income (loss)
$
71.9
$
27.4
$
(80.9
)
$
(10.6
)
Interest expense, net
32.6
38.4
138.5
160.2
Income taxes
18.1
20.8
(26.8
)
(0.2
)
Depreciation and amortization
60.6
69.5
391.1
277.8
Stock-based compensation
3.9
3.5
17.2
16.3
Acquisition costs1
1.8
3.8
4.5
25.1
Restructuring costs1
1.2
5.7
23.8
7.4
COVID-19 impact1
0.8
—
4.2
—
Adjusted EBITDA
$
190.9
$
169.1
$
471.6
$
476.0
Net sales
$
2,017.8
$
2,029.9
$
6,943.9
$
7,105.2
Net income (loss) as % of sales
3.6
%
1.3
%
(1.2
%)
(0.1
%)
Adjusted EBITDA as % of sales
9.5
%
8.3
%
6.8
%
6.7
%
______________________________
1
Amounts represent adjusting items included
in selling, general, and administrative expense and other income
(expense); remaining adjusting items balances are embedded within
the other balances reported in the table.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201119006234/en/
Brent Rakers, Director Investor Relations Brent.Rakers@becn.com
901-232-2737
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