Cancel OK

Beacon Reports Second Quarter 2020 Results

General News

Beacon (the “Company”) announced results today for its second quarter and six-month period ended March 31, 2020 (“2020”).

“Consistent with our pre-release, we produced record second quarter net sales and adjusted EBITDA,” said Julian Francis, Beacon’s President and Chief Executive Officer. “Q2 again demonstrates significant positive progress toward our goals, highlighted by nearly 5% sales growth the first 2 ½ months, year-to-year gross margin stabilization and positive adjusted operating leverage. Despite being declared an essential business in all markets in which we operate, in mid-March the COVID-19 pandemic forced us to quickly adapt to a changing environment. In response, we have taken swift and meaningful actions to reduce costs. We have also taken proactive measures to reduce inventory and capital expenditures, and we have mitigated any long-term liquidity risks by strengthening our cash position. April sales declined with considerable divergence in state-by-state performance, as certain states have been significantly impacted by state and local government restrictions. With that said, we are well prepared for a range of demand scenarios through a strong operating model, financial flexibility, and appropriate cost actions. Amid this period of uncertainty, we are finding opportunities to improve productivity and seeing our industry-leading digital platform and enhanced levels of customer service increasingly becoming differentiators for customers. We expect these items to drive sustainable benefits when the COVID-19 headwinds have passed.”

Second Quarter

Net sales increased 2.1% to $1.46 billion, from $1.43 billion in 2019. The sales increase was influenced by our sales initiatives around contractor conversions, national account sales, and the continued positive impact of our industry-leading digital platform, partially offset by decreased hurricane-related demand compared to the prior year. Residential roofing product sales decreased 1.3%, non-residential roofing product sales increased 12.6%, and complementary product sales decreased 0.4% compared to the prior year. The second quarter of fiscal years 2020 and 2019 had 64 and 63 business days, respectively.

Net income (loss) was $(122.6) million, compared to $(68.1) million in 2019. Net income (loss) attributable to common shareholders was $(128.6) million, compared to $(74.1) million in 2019. EPS was $(1.87), compared to $(1.08) in 2019. Second quarter results were negatively impacted by the write-off of certain trade names in connection with the Company’s rebranding efforts that were announced in January 2020 (the “Rebranding”). This impact was partially offset by higher sales and gross margins, and lower interest expense, finance, and other.

Adjusted Net Income (Loss) was $(12.5) million, compared to $(24.9) million in 2019. Adjusted EBITDA was $38.9 million, compared to $27.4 million 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.

Year-to-Date

Net sales decreased 0.5% to $3.13 billion, from $3.15 billion in 2019. The sales decline was mainly influenced by decreased hurricane-related demand compared to the prior year, partially offset by the continued positive impact of our industry-leading digital platform. Residential roofing product sales decreased 2.3%, non-residential roofing product sales increased 6.0%, and complementary product sales decreased 2.8% compared to the prior year. The first six months of fiscal years 2020 and 2019 had 126 and 125 business days, respectively.

Net income (loss) was $(146.1) million, compared to $(69.0) million in 2019. Net income (loss) attributable to common shareholders was $(158.1) million, compared to $(81.0) million in 2019. EPS was $(2.30), compared to $(1.18) in 2019. Six-month results were negatively impacted by the second quarter write-off of certain trade names in connection with the Rebranding.

Adjusted Net Income (Loss) was $15.8 million, compared to $21.6 million in 2019. Adjusted EBITDA was $133.1 million, compared to $149.1 million in 2019.

For the full second quarter results, click here.

About Beacon

Founded in 1928, Beacon is a Fortune 500, publicly-traded distributor of residential and commercial 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 110,000 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

Contact:

Joseph Nowicki – Executive Vice President & CFO – joseph.nowicki@becn.com – (571) 323-3939

Source: Beacon Roofing Supply, Inc.