Beacon Reports Fourth Quarter and Fiscal Year 2021 Results
Beacon (the “Company”) announced results 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
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.
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.
For the full fourth quarter results, 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 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
Jennifer Lewis – Vice President Communications & Corporate Social Responsibility – Jennifer.Lewis@becn.com – (571) 752-1048
Source: Beacon Roofing Supply, Inc.