Beacon Reports Second Quarter 2021 Results
Beacon (the “Company”) announced results today for its second quarter and six-month period ended March 31, 2021.
–Strong execution and favorable residential trends drove record second quarter net sales, seasonally strong net income (loss), and record Adjusted EBITDA, from continuing operations
–Second quarter net sales leveraged attractive residential demand, while gross margins benefited from healthy pricing environment and favorable mix
–Successful divestiture of Interior Products business sharpens management focus on growth in core exteriors business
–Accretive refinancing transactions in Q3 will result in improved balance sheet strength, enhanced flexibility and lower cash interest costs
“Continued execution by our team resulted in impressive second quarter performance,” said Julian Francis, Beacon’s President and Chief Executive Officer. “Strong residential demand and effective sales and pricing performance drove record second quarter net sales. I am particularly pleased with our gross margin performance, cost management and the operating leverage we generated on higher sales, the combination of which led to record second quarter Adjusted EBITDA. Our quarterly results, coupled with the successful divestiture of our Interior Products business, have allowed us to significantly reduce leverage, strengthen our balance sheet and sharpen our focus on the growth and profitability of our exteriors business. We are excited about our progress and look forward to a very successful 2021 as we continue to help our customers build more.”
Net sales increased 10.1% compared to the prior year, despite one fewer selling day. The second quarter sales increase reflects strong residential roofing and complementary products growth as well as the successful implementation of price increases, partially offset by softer demand for non-residential products. Residential roofing product sales increased 18.7%, complementary product sales increased 9.4%, and non-residential roofing product sales decreased 4.1% compared to the prior year. The second quarter of fiscal 2021 and 2020 had 63 and 64 business days, respectively.
Gross margin improved from 22.6% in the prior year to 25.3%, primarily reflecting pricing execution driving price-cost improvement. Operating expense decreased in the second quarter primarily due to the write-off of certain trade names in connection with the Company’s rebranding efforts in the prior period. Adjusted Operating Expense was slightly higher due to increased incentive compensation and benefits cost, partially offset by lower travel and entertainment expense. Both operating expense and Adjusted Operating Expense decreased as a percent of sales, reflecting the positive impact of productivity initiatives and cost focus amid an increasing demand environment.
Net income (loss) from continuing operations was $(10.5) million, compared to $(121.3) million in 2020. Adjusted EBITDA was $74.4 million, compared to $22.1 million in 2020. EPS was $(0.24), compared to $(1.85) in 2020. Comparative improvements in second quarter results were driven by restructuring costs of rebranding in the prior year period as well as increased net sales, particularly within residential end markets, higher gross margins and operating leverage. These impacts were partially offset by sales declines within non-residential roofing.
Net sales increased 10.8% compared to the prior year, despite one fewer selling day. Residential roofing product sales increased 20.1%, complementary product sales increased 9.1%, and non-residential roofing product sales decreased 3.7% compared to the prior year. The first half of fiscal 2021 and 2020 had 125 and 126 business days, respectively.
Gross margin improved from 23.4% in the prior year to 25.3%. 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 effective cost control. Adjusted Operating Expense decreased compared to the first half of 2020, primarily as a result of effective cost management, partially offset by higher payroll and benefits. Both operating expense and Adjusted Operating Expense decreased as a percent of sales, reflecting the positive impact of productivity initiatives and cost focus amid an increasing demand environment.
Net income (loss) from continuing operations was $36.9 million, compared to $(145.3) million in 2020. Adjusted EBITDA was $217.2 million, compared to $98.9 million in 2020. EPS was $0.35, compared to $(2.29) in 2020.
For the complete press release, click here.
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 90,000 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
Jennifer Lewis – Vice President Communications & Corporate Social Responsibility – Jennifer.Lewis@becn.com – (571) 752-1048
Source: Beacon Roofing Supply, Inc.