- Record third quarter net sales of $1.93 billion (59.4% growth
year-over-year)
- Gross margins expanded by 100 bps to 25.5%, as margins were
favorably impacted by positive price-cost realization
- Third quarter EPS of $0.55 vs. $0.73 in the prior year, and
Adjusted EPS of $1.18 vs. $0.97
- Record Adjusted EBITDA of $187.7 million
- Allied integration progressing ahead of schedule; realized
synergies of $25 million year-to-date
HERNDON, Va.--(BUSINESS WIRE)--Aug. 7, 2018--
Beacon Roofing Supply, Inc. (Nasdaq:BECN) (“Beacon” or the “Company”)
announced results today for its third quarter ended June 30, 2018 and
nine months ended June 30, 2018 of the fiscal year ending September 30,
2018 (“2018”).
Paul Isabella, the Company's President and Chief Executive Officer,
stated, “We generated record sales and Adjusted EBITDA during our fiscal
2018 third quarter. Gross margins expanded by 100 bps compared to the
prior year quarter and 180 bps compared to the second quarter of fiscal
year 2018. These results were made possible through excellent work from
our entire organization, as we effectively communicated the inflationary
pressures to the marketplace. Not only did we achieve positive
price-cost realization in each of our three product lines, but we also
significantly outperformed our prior public guidance, which we believe
underscores the value our service levels bring to the market. Organic
sales increased 2.0%, reflecting improved pricing, partially offset by
volume headwinds from difficult storm comparisons within our larger
traditional hail markets. We are pleased by our excellent operating
execution, which was highlighted by our price-cost efforts and an
ability to control expenses in a quarter of softer demand. The
integration of Allied is tracking better than expected for 2018, and we
remain committed to realizing our long-term synergy goals. We recognize
that weather events may cause short-term demand to fluctuate
geographically, however our long-term sales trajectory shows a much
greater level of consistency given our sizeable repair and remodel (R&R)
business. Going forward, Beacon will remain a disciplined leader on
pricing and we will continue to distinguish ourselves through strategic
investments in our people and technology, and by expanding the depth and
breadth of our product offerings.”
Third Quarter
Total sales increased 59.4% to a third quarter record of $1.93 billion,
up from $1.21 billion in 2017. Residential roofing product sales
increased 23.4%, non-residential roofing product sales increased 42.1%
and complementary product sales increased 204.6% over the prior year.
Existing markets sales, excluding acquisitions, increased 2.0% for the
quarter. The third quarter of fiscal years 2018 and 2017 each had 64
business days.
Net income attributable to common shareholders for the third quarter was
$43.4 million, compared to $44.7 million in 2017. Third quarter EPS was
$0.55, compared to $0.73 in 2017. Adjusted Net Income (Loss), after
removing the impact of acquisition related costs and the non-recurring
effects of tax reform, was $93.4 million in the third quarter of 2018,
compared to $59.3 million in 2017. Third quarter Adjusted EPS was $1.18,
compared to $0.97 in 2017. (See included financial tables for a
reconciliation of “Adjusted” financial measures to the most directly
comparable GAAP financial measures). Third quarter results were
positively impacted by solid organic sales growth within non-residential
roofing and complementary building products categories, improved
existing markets gross margins and favorable contributions from acquired
operations. Third quarter results were negatively impacted by a decline
in residential roofing volumes and higher operating expenses, increased
interest expense and the impact from preferred dividends primarily
related to the acquisition of Allied.
Nine Months
Total sales increased 45.2% to a nine-month record of $4.48 billion, up
from $3.09 billion in 2017. Residential roofing product sales increased
18.6%, non-residential roofing product sales increased 27.5% and
complementary product sales increased 164.7% over the prior year.
Existing markets sales, excluding acquisitions, increased 3.6% year to
date. The nine months of fiscal years 2018 and 2017 each had 189
business days.
Net income attributable to common shareholders for the nine months was
$38.3 million, compared to $55.7 million in 2017. The nine-month EPS was
$0.51, compared to $0.91 in 2017. Adjusted Net Income (Loss), after
removing the impact of acquisition related costs and the net benefit
from one-time tax items, was $122.6 million year to date, compared to
$98.7 million in 2017. The nine-month Adjusted EPS was $1.62, compared
to $1.61 in 2017. (See included financial tables for a reconciliation of
“Adjusted” financial measures to the most directly comparable GAAP
financial measures). The nine-month results were positively impacted by
organic sales growth, higher gross margins and beneficial tax
adjustments. The nine-month results were negatively impacted by higher
operating expenses, increased interest expense and the impact of
preferred dividends primarily related to the acquisition of Allied.
The Company will host a webcast and conference call today at 5:00 p.m.
ET to discuss these results. The webcast link and call-in details are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
What:
|
|
Beacon Roofing Supply Third Quarter 2018 Earnings Results Webcast
and Conference Call
|
|
|
|
|
When
|
|
Tuesday, August 7, 2018
|
|
|
|
|
Time:
|
|
5:00 p.m. ET
|
|
|
|
|
Webcast:
|
|
http://ir.beaconroofingsupply.com/events.cfm
(live and replay)
|
|
|
|
|
Live Call:
|
|
720-634-9063; Conf. ID #9762196
|
|
|
|
|
|
|
|
To assure timely access, conference call participants should dial in
prior to the 5:00 p.m. ET start time.
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 latest Form 10-K. 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 Roofing Supply
Founded in 1928, Beacon Roofing Supply, Inc. is the largest publicly
traded distributor of residential and commercial roofing materials and
complementary building products, operating 554 branches throughout 50
states in the U.S. and 6 provinces in Canada. To learn more about Beacon
and its family of regional brands, please visit www.becn.com.
|
|
| BEACON ROOFING SUPPLY, INC. |
| Consolidated Statements of Operations |
| (In thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
|
|
20181 |
|
|
% of
Net
Sales
|
|
|
20172 |
|
|
% of
Net
Sales
|
|
|
20181 |
|
|
% of
Net
Sales
|
|
|
20172 |
|
|
% of
Net
Sales
|
|
|
Net sales
|
|
$
|
1,934,951
|
|
|
|
100.0
|
%
|
|
$
|
1,213,894
|
|
|
|
100.0
|
%
|
|
$
|
4,482,555
|
|
|
|
100.0
|
%
|
|
$
|
3,086,802
|
|
|
|
100.0
|
%
|
|
Cost of products sold
|
|
|
1,441,057
|
|
|
|
74.5
|
%
|
|
|
916,140
|
|
|
|
75.5
|
%
|
|
|
3,380,531
|
|
|
|
75.4
|
%
|
|
|
2,333,504
|
|
|
|
75.6
|
%
|
|
Gross profit
|
|
|
493,894
|
|
|
|
25.5
|
%
|
|
|
297,754
|
|
|
|
24.5
|
%
|
|
|
1,102,024
|
|
|
|
24.6
|
%
|
|
|
753,298
|
|
|
|
24.4
|
%
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
323,194
|
|
|
|
16.7
|
%
|
|
|
183,600
|
|
|
|
15.1
|
%
|
|
|
858,534
|
|
|
|
19.2
|
%
|
|
|
538,288
|
|
|
|
17.4
|
%
|
|
Depreciation
|
|
|
15,811
|
|
|
|
0.8
|
%
|
|
|
8,579
|
|
|
|
0.7
|
%
|
|
|
41,640
|
|
|
|
0.9
|
%
|
|
|
25,122
|
|
|
|
0.8
|
%
|
|
Amortization
|
|
|
50,076
|
|
|
|
2.6
|
%
|
|
|
20,704
|
|
|
|
1.7
|
%
|
|
|
105,339
|
|
|
|
2.3
|
%
|
|
|
61,116
|
|
|
|
2.0
|
%
|
|
Total operating expense
|
|
|
389,081
|
|
|
|
20.1
|
%
|
|
|
212,883
|
|
|
|
17.5
|
%
|
|
|
1,005,513
|
|
|
|
22.4
|
%
|
|
|
624,526
|
|
|
|
20.2
|
%
|
|
Income (loss) from operations
|
|
|
104,813
|
|
|
|
5.4
|
%
|
|
|
84,871
|
|
|
|
7.0
|
%
|
|
|
96,511
|
|
|
|
2.2
|
%
|
|
|
128,772
|
|
|
|
4.2
|
%
|
|
Interest expense, financing costs, and other
|
|
|
37,348
|
|
|
|
1.9
|
%
|
|
|
13,397
|
|
|
|
1.1
|
%
|
|
|
99,486
|
|
|
|
2.2
|
%
|
|
|
39,239
|
|
|
|
1.3
|
%
|
|
Income (loss) before provision for income taxes
|
|
|
67,465
|
|
|
|
3.5
|
%
|
|
|
71,474
|
|
|
|
5.9
|
%
|
|
|
(2,975
|
)
|
|
|
0.0
|
%
|
|
|
89,533
|
|
|
|
2.9
|
%
|
|
Provision for (benefit from) income taxes
|
|
|
18,090
|
|
|
|
0.9
|
%
|
|
|
26,815
|
|
|
|
2.2
|
%
|
|
|
(53,291
|
)
|
|
|
(1.1
|
%)
|
|
|
33,800
|
|
|
|
1.1
|
%
|
|
Net income (loss)
|
|
|
49,375
|
|
|
|
2.6
|
%
|
|
|
44,659
|
|
|
|
3.7
|
%
|
|
|
50,316
|
|
|
|
1.1
|
%
|
|
|
55,733
|
|
|
|
1.8
|
%
|
|
Dividends on preferred shares3 |
|
|
6,000
|
|
|
|
0.4
|
%
|
|
|
-
|
|
|
|
0.0
|
%
|
|
|
12,000
|
|
|
|
0.2
|
%
|
|
|
-
|
|
|
|
0.0
|
%
|
|
Net income (loss) attributable to common shareholders
|
|
$
|
43,375
|
|
|
|
2.2
|
%
|
|
$
|
44,659
|
|
|
|
3.7
|
%
|
|
$
|
38,316
|
|
|
|
0.9
|
%
|
|
$
|
55,733
|
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
68,086,387
|
|
|
|
|
|
|
|
60,311,923
|
|
|
|
|
|
|
|
67,976,980
|
|
|
|
|
|
|
|
60,131,546
|
|
|
|
|
|
|
Diluted
|
|
|
69,148,143
|
|
|
|
|
|
|
|
61,350,843
|
|
|
|
|
|
|
|
69,240,040
|
|
|
|
|
|
|
|
61,163,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share4:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.56
|
|
|
|
|
|
|
$
|
0.74
|
|
|
|
|
|
|
$
|
0.52
|
|
|
|
|
|
|
$
|
0.93
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.55
|
|
|
|
|
|
|
$
|
0.73
|
|
|
|
|
|
|
$
|
0.51
|
|
|
|
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
| 1 |
|
The third quarter 2018 operating results include $10.0 million ($7.1
million, net of taxes) of non-recurring charges, $50.1 million
($35.6 million, net of taxes) of amortization for acquired
intangibles, and $3.5 million ($2.5 million, net of taxes) of
interest expense, financing costs, and other for the recognition of
certain costs related to acquisitions. The nine months ended June
30, 2018 operating results include $43.8 million ($31.0 million, net
of taxes) of non-recurring charges, $105.4 million ($74.7 million,
net of taxes) of amortization for acquired intangibles, and $22.1
million ($15.7 million, net of taxes) of interest expense, financing
costs, and other for the recognition of certain costs related to
acquisitions. The three and nine months ended June 30, 2018 also
include net non-recurring tax benefit of $1.2 million and $49.1
million, respectively. See “Adjusted Net Income (Loss) and Adjusted
EPS” table for further details.
|
|
|
|
| 2 |
|
The third quarter 2017 operating results include $2.0 million ($1.2
million, net of taxes) of non-recurring charges, $20.7 million
($12.7 million, net of taxes) of amortization for acquired
intangibles, and $1.1 million ($0.7 million, net of taxes) of
interest expense, financing costs, and other for the recognition of
certain costs related to acquisitions. The nine months ended June
30, 2017 operating results include $4.7 million ($2.9 million, net
of taxes) of non-recurring charges, $61.1 million ($37.5 million,
net of taxes) of amortization for acquired intangibles, and $4.3
million ($2.6 million, net of taxes) of interest expense, financing
costs, and other for the recognition of certain costs related to
acquisitions. See “Adjusted Net Income (Loss) and Adjusted EPS”
table for further details.
|
|
|
|
| 3 |
|
For the three months ended June 30, 2018, $6.0 million is comprised
entirely of cumulative dividends that are undeclared as of period
end. For the nine months ended June 30, 2018, $12.0 million is
comprised of the $6.0 million cumulative dividends that are
undeclared as well as an additional $6.0 million of preferred share
dividends that had been declared and paid as of period end.
|
|
|
|
| 4 |
|
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 (in thousands, except share and per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
Net income (loss)
|
|
$
|
49,375
|
|
|
$
|
44,659
|
|
|
$
|
50,316
|
|
|
$
|
55,733
|
|
|
Dividends on preferred shares
|
|
|
(6,000
|
)
|
|
|
-
|
|
|
|
(12,000
|
)
|
|
|
-
|
|
|
Net income (loss) attributable to common shareholders
|
|
$
|
43,375
|
|
|
$
|
44,659
|
|
|
$
|
38,316
|
|
|
$
|
55,733
|
|
|
Undistributed income allocated to participating securities
|
|
|
(5,406
|
)
|
|
|
-
|
|
|
|
(3,293
|
)
|
|
|
-
|
|
|
Net income (loss) attributable to common shareholders - basic and
diluted
|
|
$
|
37,969
|
|
|
$
|
44,659
|
|
|
$
|
35,023
|
|
|
$
|
55,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - basic
|
|
|
68,086,387
|
|
|
|
60,311,923
|
|
|
|
67,976,980
|
|
|
|
60,131,546
|
|
|
Effect of common share equivalents
|
|
|
1,061,756
|
|
|
|
1,038,920
|
|
|
|
1,263,060
|
|
|
|
1,032,045
|
|
|
Weighted-average common shares outstanding - diluted
|
|
|
69,148,143
|
|
|
|
61,350,843
|
|
|
|
69,240,040
|
|
|
|
61,163,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic
|
|
$
|
0.56
|
|
|
$
|
0.74
|
|
|
$
|
0.52
|
|
|
$
|
0.93
|
|
|
Net income (loss) per share - diluted
|
|
$
|
0.55
|
|
|
$
|
0.73
|
|
|
$
|
0.51
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| BEACON ROOFING SUPPLY, INC. |
| Consolidated Balance Sheets |
| (In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
|
September
30, 2017
|
|
|
June 30,
2017
|
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
27,551
|
|
|
$
|
138,250
|
|
|
$
|
33,055
|
|
|
Accounts receivable, net
|
|
|
1,077,888
|
|
|
|
704,527
|
|
|
|
670,977
|
|
|
Inventories
|
|
|
1,165,389
|
|
|
|
551,924
|
|
|
|
641,425
|
|
|
Prepaid expenses and other current assets
|
|
|
337,589
|
|
|
|
209,138
|
|
|
|
221,477
|
|
|
Total current assets
|
|
|
2,608,417
|
|
|
|
1,603,839
|
|
|
|
1,566,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
288,708
|
|
|
|
156,129
|
|
|
|
156,951
|
|
|
Goodwill
|
|
|
2,321,180
|
|
|
|
1,251,986
|
|
|
|
1,256,014
|
|
|
Intangibles, net
|
|
|
1,371,005
|
|
|
|
429,069
|
|
|
|
442,962
|
|
|
Other assets, net
|
|
|
1,511
|
|
|
|
8,534
|
|
|
|
1,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Assets |
|
$
|
6,590,821
|
|
|
$
|
3,449,557
|
|
|
$
|
3,424,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
719,686
|
|
|
$
|
503,697
|
|
|
$
|
387,579
|
|
|
Accrued expenses
|
|
|
520,952
|
|
|
|
261,297
|
|
|
|
280,315
|
|
|
Current portion of long-term obligations
|
|
|
19,714
|
|
|
|
14,141
|
|
|
|
13,762
|
|
|
Total current liabilities
|
|
|
1,260,352
|
|
|
|
779,135
|
|
|
|
681,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving lines of credit, net
|
|
|
482,489
|
|
|
|
3,205
|
|
|
|
449,615
|
|
|
Long-term debt, net
|
|
|
2,494,308
|
|
|
|
721,268
|
|
|
|
721,685
|
|
|
Deferred income taxes, net
|
|
|
93,928
|
|
|
|
138,383
|
|
|
|
142,116
|
|
|
Long-term obligations under equipment financing and other, net
|
|
|
15,979
|
|
|
|
23,213
|
|
|
|
26,025
|
|
|
Other long-term liabilities
|
|
|
6,319
|
|
|
|
2,547
|
|
|
|
2,387
|
|
|
Total liabilities
|
|
|
4,353,375
|
|
|
|
1,667,751
|
|
|
|
2,023,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock
|
|
$
|
399,195
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
681
|
|
|
|
677
|
|
|
|
603
|
|
|
Undesignated preferred stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Additional paid-in capital
|
|
|
1,063,137
|
|
|
|
1,047,506
|
|
|
|
714,608
|
|
|
Retained earnings
|
|
|
792,502
|
|
|
|
748,186
|
|
|
|
703,055
|
|
|
Accumulated other comprehensive loss
|
|
|
(18,069
|
)
|
|
|
(14,563
|
)
|
|
|
(17,378
|
)
|
|
Total stockholders' equity
|
|
|
1,838,251
|
|
|
|
1,781,806
|
|
|
|
1,400,888
|
|
| Total Liabilities and Stockholders' Equity |
|
$
|
6,590,821
|
|
|
$
|
3,449,557
|
|
|
$
|
3,424,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| BEACON ROOFING SUPPLY, INC. |
| Consolidated Statements of Cash Flows |
| (In thousands) |
|
|
|
|
Nine Months Ended June 30, |
|
|
2018 |
|
|
2017 |
|
| Operating activities: |
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
50,316
|
|
|
$
|
55,733
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
146,979
|
|
|
|
86,238
|
|
|
Stock-based compensation
|
|
13,133
|
|
|
|
11,227
|
|
|
Certain interest expense and other financing costs
|
|
11,549
|
|
|
|
3,989
|
|
|
Loss on debt extinguishment
|
|
1,726
|
|
|
|
-
|
|
|
Gain on sale of fixed assets
|
|
(1,131
|
)
|
|
|
(726
|
)
|
|
Deferred income taxes
|
|
(48,855
|
)
|
|
|
6,625
|
|
|
Changes in operating assets and liabilities, net of the effects of
businesses acquired:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(52,024
|
)
|
|
|
(28,309
|
)
|
|
Inventories
|
|
(299,881
|
)
|
|
|
(141,942
|
)
|
|
Prepaid expenses and other assets
|
|
(19,511
|
)
|
|
|
(55,973
|
)
|
|
Accounts payable and accrued expenses
|
|
195,948
|
|
|
|
137,290
|
|
|
Other liabilities
|
|
732
|
|
|
|
21
|
|
|
Net cash provided by (used in) operating activities
|
|
(1,019
|
)
|
|
|
74,173
|
|
|
|
|
|
|
|
|
|
| Investing activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
(34,978
|
)
|
|
|
(31,882
|
)
|
|
Acquisition of businesses
|
|
(2,715,429
|
)
|
|
|
(128,533
|
)
|
|
Proceeds from sales of assets
|
|
750
|
|
|
|
1,839
|
|
|
Net cash provided by (used in) investing activities
|
|
(2,749,657
|
)
|
|
|
(158,576
|
)
|
|
|
|
|
|
|
|
|
| Financing activities: |
|
|
|
|
|
|
|
|
Borrowings under revolving lines of credit, net of repayments
|
|
490,971
|
|
|
|
88,357
|
|
|
Borrowings under term loan, net of repayments
|
|
526,575
|
|
|
|
(3,375
|
)
|
|
Borrowings under senior notes
|
|
1,300,000
|
|
|
|
-
|
|
|
Payment of debt issuance costs
|
|
(65,788
|
)
|
|
|
-
|
|
|
Repayments under equipment financing facilities and other
|
|
(8,604
|
)
|
|
|
(7,780
|
)
|
|
Proceeds from issuance of convertible preferred stock
|
|
400,000
|
|
|
|
-
|
|
|
Payment of stock issuance costs
|
|
(1,279
|
)
|
|
|
-
|
|
|
Payment of dividends on preferred stock
|
|
(6,000
|
)
|
|
|
-
|
|
|
Proceeds from issuance of common stock related to equity awards
|
|
6,950
|
|
|
|
9,994
|
|
|
Taxes paid related to net share settlement of equity awards
|
|
(3,975
|
)
|
|
|
(1,172
|
)
|
|
Net cash provided by (used in) financing activities
|
|
2,638,850
|
|
|
|
86,024
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
1,127
|
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
(110,699
|
)
|
|
|
1,669
|
|
|
Cash and cash equivalents, beginning of period
|
|
138,250
|
|
|
|
31,386
|
|
|
Cash and cash equivalents, end of period
|
$
|
27,551
|
|
|
$
|
33,055
|
|
|
|
|
|
|
|
|
|
|
|
| BEACON ROOFING SUPPLY, INC. |
| Consolidated Sales by Product Line |
| (In thousands) |
|
|
| Consolidated Sales by Product Line |
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
Change |
|
|
|
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
|
Residential roofing products
|
|
|
$
|
824,461
|
|
|
42.6
|
%
|
|
$
|
667,896
|
|
|
55.0
|
%
|
|
$
|
156,565
|
|
|
23.4
|
%
|
|
Non-residential roofing products
|
|
|
|
483,524
|
|
|
25.0
|
%
|
|
|
340,157
|
|
|
28.0
|
%
|
|
|
143,367
|
|
|
42.1
|
%
|
|
Complementary building products
|
|
|
|
626,966
|
|
|
32.4
|
%
|
|
|
205,841
|
|
|
17.0
|
%
|
|
|
421,125
|
|
|
204.6
|
%
|
|
|
|
$
|
1,934,951
|
|
|
100.0
|
%
|
|
$
|
1,213,894
|
|
|
100.0
|
%
|
|
$
|
721,057
|
|
|
59.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated Sales by Product Line for Existing Markets1 |
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
Change |
|
|
|
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
|
Residential roofing products
|
|
|
$
|
589,507
|
|
|
52.5
|
%
|
|
$
|
607,341
|
|
|
55.1
|
%
|
|
$
|
(17,834
|
)
|
|
(2.9
|
%)
|
|
Non-residential roofing products
|
|
|
|
346,410
|
|
|
30.8
|
%
|
|
|
317,880
|
|
|
28.8
|
%
|
|
|
28,530
|
|
|
9.0
|
%
|
|
Complementary building products
|
|
|
|
187,922
|
|
|
16.7
|
%
|
|
|
177,096
|
|
|
16.1
|
%
|
|
|
10,826
|
|
|
6.1
|
%
|
|
|
|
$
|
1,123,839
|
|
|
100.0
|
%
|
|
$
|
1,102,317
|
|
|
100.0
|
%
|
|
$
|
21,522
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Existing Market1 Sales By Business Day2 |
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
Change |
|
|
|
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
|
Residential roofing products
|
|
|
$
|
9,211
|
|
|
52.5
|
%
|
|
$
|
9,490
|
|
|
55.1
|
%
|
|
$
|
(279
|
)
|
|
(2.9
|
%)
|
|
Non-residential roofing products
|
|
|
|
5,413
|
|
|
30.8
|
%
|
|
|
4,967
|
|
|
28.8
|
%
|
|
|
446
|
|
|
9.0
|
%
|
|
Complementary building products
|
|
|
|
2,936
|
|
|
16.7
|
%
|
|
|
2,767
|
|
|
16.1
|
%
|
|
|
169
|
|
|
6.1
|
%
|
|
|
|
$
|
17,560
|
|
|
100.0
|
%
|
|
$
|
17,224
|
|
|
100.0
|
%
|
|
$
|
336
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Excludes acquired branches that have not been under ownership for at
least four fiscal quarters prior to the start of the third quarter
of fiscal year 2018.
|
|
2
|
|
There were 64 business days in each of the quarters ended June 30,
2018 and 2017.
|
|
|
| BEACON ROOFING SUPPLY, INC. |
|
| Consolidated Sales by Product Line |
|
| (In thousands) |
|
|
|
| Consolidated Sales by Product Line |
|
|
|
|
Nine Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
Change |
|
|
|
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
|
Residential roofing products
|
|
|
$
|
1,995,193
|
|
|
|
44.6
|
%
|
|
$
|
1,681,739
|
|
|
|
54.5
|
%
|
|
$
|
313,454
|
|
|
|
18.6
|
%
|
|
Non-residential roofing products
|
|
|
|
1,145,064
|
|
|
|
25.5
|
%
|
|
|
897,879
|
|
|
|
29.1
|
%
|
|
|
247,185
|
|
|
|
27.5
|
%
|
|
Complementary building products
|
|
|
|
1,342,298
|
|
|
|
29.9
|
%
|
|
|
507,184
|
|
|
|
16.4
|
%
|
|
|
835,114
|
|
|
|
164.7
|
%
|
|
|
|
$
|
4,482,555
|
|
|
|
100.0
|
%
|
|
$
|
3,086,802
|
|
|
|
100.0
|
%
|
|
$
|
1,395,753
|
|
|
|
45.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated Sales by Product Line for Existing Markets1 |
|
|
|
|
Nine Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
Change |
|
|
|
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
|
Residential roofing products
|
|
|
$
|
1,540,356
|
|
|
|
52.9
|
%
|
|
$
|
1,527,375
|
|
|
|
54.3
|
%
|
|
$
|
12,981
|
|
|
|
0.8
|
%
|
|
Non-residential roofing products
|
|
|
|
879,558
|
|
|
|
30.2
|
%
|
|
|
836,279
|
|
|
|
29.7
|
%
|
|
|
43,279
|
|
|
|
5.2
|
%
|
|
Complementary building products
|
|
|
|
491,916
|
|
|
|
16.9
|
%
|
|
|
448,160
|
|
|
|
16.0
|
%
|
|
|
43,756
|
|
|
|
9.8
|
%
|
|
|
|
$
|
2,911,830
|
|
|
|
100.0
|
%
|
|
$
|
2,811,814
|
|
|
|
100.0
|
%
|
|
$
|
100,016
|
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Existing Market1 Sales By Business Day2 |
|
|
|
|
Nine Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
Change |
|
|
|
|
Net Sales |
|
|
Mix % |
|
|
Net Sales |
|
|
Mix % |
|
|
$ |
|
|
% |
|
|
Residential roofing products
|
|
|
$
|
8,150
|
|
|
|
52.9
|
%
|
|
$
|
8,081
|
|
|
|
54.4
|
%
|
|
$
|
69
|
|
|
|
0.8
|
%
|
|
Non-residential roofing products
|
|
|
|
4,654
|
|
|
|
30.2
|
%
|
|
|
4,425
|
|
|
|
29.7
|
%
|
|
|
229
|
|
|
|
5.2
|
%
|
|
Complementary building products
|
|
|
|
2,603
|
|
|
|
16.9
|
%
|
|
|
2,371
|
|
|
|
15.9
|
%
|
|
|
232
|
|
|
|
9.8
|
%
|
|
|
|
$
|
15,407
|
|
|
|
100.0
|
%
|
|
$
|
14,877
|
|
|
|
100.0
|
%
|
|
$
|
530
|
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Excludes acquired branches that have not been under ownership for at
least four fiscal quarters prior to the start of fiscal year 2018.
|
|
2
|
|
There were 189 business days for the nine months ended June 30, 2018
and 2017, respectively.
|
|
|
|
|
|
|
|
| BEACON ROOFING SUPPLY, INC. |
|
Adjusted Net Income (Loss) and Adjusted EPS1
|
| (In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
Amount |
|
|
Per Share2
|
|
|
Amount |
|
|
Per Share2
|
|
|
Amount |
|
|
Per Share3
|
|
|
Amount |
|
|
Per Share3
|
|
Net income (loss)
|
|
|
$
|
49,375
|
|
|
$
|
0.63
|
|
|
$
|
44,659
|
|
|
$
|
0.73
|
|
|
$
|
50,316
|
|
|
$
|
0.67
|
|
|
$
|
55,733
|
|
|
$
|
0.91
|
|
Acquisition costs4 |
|
|
|
45,191
|
|
|
|
0.57
|
|
|
|
14,614
|
|
|
|
0.24
|
|
|
|
121,429
|
|
|
|
1.60
|
|
|
|
42,987
|
|
|
|
0.70
|
|
Effects of tax reform5 |
|
|
|
(1,166
|
)
|
|
|
(0.02
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(49,149
|
)
|
|
|
(0.65
|
)
|
|
|
-
|
|
|
|
-
|
|
Adjusted Net Income (Loss)
|
|
|
$
|
93,400
|
|
|
$
|
1.18
|
|
|
$
|
59,273
|
|
|
$
|
0.97
|
|
|
$
|
122,596
|
|
|
$
|
1.62
|
|
|
$
|
98,720
|
|
|
$
|
1.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1 |
|
Adjusted Net Income (Loss) is defined as net income that excludes
non-recurring acquisition costs, the amortization of intangibles,
business restructuring costs, and the non-recurring effects of tax
reform. We believe that Adjusted Net Income (Loss) is an operating
performance metric that is useful to investors because it permits
investors to better understand year-over-year changes in
underlying operating performance. Adjusted net income per share or
"Adjusted EPS" is calculated by dividing the Adjusted Net Income
(Loss) for the period by the weighted-average diluted shares
outstanding for the period after assuming the full conversion of
the participating Preferred Stock.
|
|
|
|
| 2 |
|
Per share amounts are calculated using the diluted weighted-average
common stock outstanding totals for each respective period after
assuming the full conversion of the participating Preferred Stock.
The weighted-average share count utilized in the 2018 calculation of
Adjusted EPS is 78,842,762. This amount is the 69,148,143 diluted
weighted-average shares outstanding plus the assumed conversion of
9,694,619 weighted-average shares of participating Preferred Stock,
which were excluded from the GAAP net income (loss) per share
calculation for the period due to their anti-dilutive nature. The
weighted-average share count utilized in the 2017 calculation of
Adjusted EPS is 61,350,843.
|
|
|
|
| 3 |
|
Per share amounts are calculated using the diluted weighted-average
common stock outstanding totals for each respective period after
assuming the full conversion of the participating Preferred Stock.
The weighted-average share count utilized in the 2018 calculation of
Adjusted EPS is 75,632,096. This amount is the 69,240,040 diluted
weighted-average shares outstanding plus the assumed conversion of
6,392,056 weighted-average shares of participating Preferred Stock,
which were excluded from the GAAP net income (loss) per share
calculation for the period due to their anti-dilutive nature. The
weighted-average share count utilized in the 2017 calculation of
Adjusted EPS is 61,163,591.
|
|
|
|
| 4 |
|
Acquisition costs for the three months ended June 30, 2018 include
$13.5 million of non-recurring charges related to acquisitions and
$50.1 million of amortization expense related to intangibles, both
net of $18.4 million in tax in total. Acquisition costs for the
three months ended June 30, 2017 include $3.1 million of
non-recurring charges related to acquisitions and $20.7 million of
amortization expense related to intangibles, both net of $9.2
million in tax in total. Acquisition costs for the nine months ended
June 30, 2018 include $65.9 million of non-recurring charges related
to acquisitions and $105.4 million of amortization expense related
to intangibles, both net of $49.9 million in tax in total.
Acquisition costs for the nine months ended June 30, 2017 include
$9.0 million of non-recurring charges related to acquisitions and
$61.1 million of amortization expense related to intangibles, both
net of $27.1 million in tax in total.
|
|
|
|
| 5 |
|
The non-recurring impact of deferred tax asset revaluation and a
recognized provisional expense related to the repatriation of
earnings and profits of our foreign subsidiary, Beacon Roofing
Supply Canada Company.
|
|
|
|
|
|
|
While we believe Adjusted Net Income (Loss) and Adjusted EPS
are useful measures for investors, these are not measurements
presented in accordance with United States Generally Accepted
Accounting Principles (“GAAP”). You should not consider Adjusted
Net Income (Loss) or Adjusted EPS in isolation or as a substitute
for net income and net income per share or diluted earnings per
share calculated in accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
| BEACON ROOFING SUPPLY, INC. |
|
Adjusted EBITDA1
|
| (In thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net income (loss)
|
|
|
$
|
49,375
|
|
|
$
|
44,659
|
|
|
$
|
50,316
|
|
|
$
|
55,733
|
|
Acquisition costs2 |
|
|
|
9,957
|
|
|
|
1,971
|
|
|
|
43,827
|
|
|
|
4,715
|
|
Interest expense, net
|
|
|
|
39,055
|
|
|
|
13,614
|
|
|
|
104,334
|
|
|
|
40,098
|
|
Income taxes
|
|
|
|
18,090
|
|
|
|
26,815
|
|
|
|
(53,291
|
)
|
|
|
33,800
|
|
Depreciation and amortization
|
|
|
|
65,887
|
|
|
|
29,283
|
|
|
|
146,979
|
|
|
|
86,238
|
|
Stock-based compensation
|
|
|
|
5,298
|
|
|
|
3,653
|
|
|
|
13,133
|
|
|
|
11,227
|
|
Adjusted EBITDA
|
|
|
$
|
187,662
|
|
|
$
|
119,995
|
|
|
$
|
305,298
|
|
|
$
|
231,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a % of net sales
|
|
|
9.7%
|
|
|
9.9%
|
|
|
6.8%
|
|
|
7.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Adjusted EBITDA is defined as net income plus interest expense
(net of interest income), income taxes, depreciation and
amortization, stock-based compensation, non-recurring acquisition
costs, and business restructuring costs. EBITDA is a measure
commonly used in the distribution industry, and we present
Adjusted EBITDA to enhance your understanding of our operating
performance. Adjusted EBITDA is used in our bank covenants and we
use Adjusted EBITDA as an internal performance measurement and as
one criterion for evaluating our performance relative to that of
our peers. We believe that Adjusted EBITDA is an operating
performance measure that provides investors and analysts with a
measure of operating results unaffected by differences in capital
structures, capital investment cycles, and ages of related assets
among otherwise comparable companies. Further, we believe that
Adjusted EBITDA is a useful measure because it improves
comparability of results of operations, since purchase accounting
used for acquisitions can render depreciation and amortization
non-comparable between periods. However, our calculations of these
non-GAAP measures may not align with similarly titled measures
reported by other companies. We use these supplemental measures to
evaluate performance period over period and to analyze the
underlying trends in our business and establish operational goals
and forecasts that are used in allocating resources. We expect to
compute Adjusted EBITDA using the same consistent method from
quarter-to-quarter and year-to-year.
|
|
|
| 2 |
|
Acquisition costs reflect all non-recurring charges related to
acquisitions (excluding the impact of tax) that are not embedded in
other balances of the table. Certain portions of the total
acquisition costs incurred are included in interest expense, income
taxes, depreciation and amortization, and stock-based compensation.
|
|
|
|
|
|
|
While we believe Adjusted EBITDA is a useful measure for
investors, it is not a measurement presented in accordance with
GAAP. You should not consider Adjusted EBITDA in isolation or as a
substitute for net income, cash flows from operations, or any
other items calculated in accordance with GAAP. In addition,
Adjusted EBITDA has inherent material limitations as a performance
measure. It does not include interest expense. Because we have
borrowed money, interest expense is a necessary element of our
costs. In addition, Adjusted EBITDA does not include depreciation
and amortization expense. Because we have capital and intangible
assets, depreciation and amortization expense is a necessary
element of our costs. Adjusted EBITDA also does not include
stock-based compensation, which is a necessary element of our
costs since we make stock awards to key members of management as
an important incentive to maximize overall company performance and
as a benefit. Moreover, Adjusted EBITDA does not include taxes,
and payment of taxes is a necessary element of our operations.
Accordingly, since Adjusted EBITDA excludes these items, it has
material limitations as a performance measure. We separately
monitor capital expenditures, which impact depreciation expense,
as well as amortization expense, interest expense, stock-based
compensation expense, and income tax expense. Because not all
companies use identical calculations, our presentation of Adjusted
EBITDA may not be comparable to other similarly titled measures of
other companies.
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180807005901/en/
Source: Beacon Roofing Supply, Inc.
Beacon Roofing Supply, Inc.
Joseph Nowicki, Executive VP & CFO
571-323-3940
JNowicki@becn.com