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Beacon Reports Transition Period and Calendar Year 2021 Results

General News
Beacon Building Products Logo - Lumber Stocking Wholesaler/Distributor & Retail Yard

Beacon (the “Company”) announced results today for the period from October 1, 2021 to December 31, 2021 (the “transition period”) and for the calendar year ended December 31, 2021 (“calendar year 2021” or “2021”). Commencing January 1, 2022, the Company’s fiscal years will end on December 31. To aid the comparability of future financial data to historical financial data, the Company has recast certain unaudited historical financial information on the basis of twelve months ended December 31.

  • Record calendar year performance including net sales, net income, and Adjusted EBITDA
  • Achieved near-record net income margin in the calendar year, as well as double-digit Adjusted EBITDA margin for the first time in Beacon’s history
  • Record calendar fourth quarter net sales with strong pricing execution throughout 2021 and revenue growth across all three lines of business
  • Successful recent acquisitions of Midway Wholesale and Crabtree Siding expanded presence in two key markets
  • Divestiture of solar products business sharpened focus on core business
  • Poised to deliver multi-year strategy and financial targets at upcoming Investor Day

“2021 was nothing short of transformational. I’m extremely proud of the Beacon team’s ability to successfully execute in a supply-challenged environment to finish the year in record fashion. We eclipsed a meaningful profitability threshold, delivering double-digit Adjusted EBITDA margin for the first time in our history,” said Julian Francis, Beacon’s President and CEO. “Our calendar fourth quarter results are a demonstration of our positive momentum entering 2022, as we again generated record top-line and bottom-line results. Our renewed financial flexibility provided us the capacity to reinvest in the growth of our business. We successfully closed on two acquisitions in recent months, expanding our presence in key markets. In addition, we divested our solar products business, further focusing our team on delivering high-caliber service to our core exteriors customer. The strategic achievements that we have accomplished in 2020 and 2021 give us great confidence in our future, and we look forward to sharing our longer-term strategic plan called Ambition 2025 with the investment community later this month.”

Transition Period

Net sales increased 11.3% compared to the prior year to $1.75 billion, a record for net sales from continuing operations for the calendar fourth quarter. Transition period net sales increased across all three lines of business, largely driven by a weighted-average selling price increase of approximately 15-16%. This was partially offset by an implied average sales volume decrease of approximately 4-5%, due to supply chain challenges in the current year and a strong prior year comparable.

Residential roofing product sales increased 8.9%, complementary product sales increased 15.7%, and non-residential roofing product sales increased 12.8% compared to the prior year. The three-month periods ending December 31, 2021 and 2020 each had 62 business days.

Gross margin improved to 26.3%, from 25.4% in the prior year, primarily reflecting pricing execution that drove price-cost improvement, partially offset by an unfavorable sales mix. The increase in operating expense was primarily driven by the $22.3 million loss on sale of the solar products business (“Solar Products”). In addition, operating expense and Adjusted Operating Expense increased in the transition period due to higher payroll and benefits expense, higher general and administrative expenses driven by increased professional fees, and higher selling costs. Operating expense increased as a percent of sales, reflecting the loss on sale of Solar Products, while Adjusted Operating Expense as a percent of sales remained even with the prior year period.

Net income (loss) from continuing operations was $68.1 million, compared to $47.4 million in the prior year. Adjusted EBITDA was $174.1 million, compared to $142.9 million in the prior year. EPS was $0.76, compared to $0.59 in the prior year. Improvements in transition period results compared to the prior year period were largely driven by higher sales and gross margins.

Calendar Year 2021

Net sales increased 12.2% compared to the prior year despite one fewer business day, an annual record for net sales from continuing operations. Residential roofing product sales increased 11.3%, complementary product sales increased 19.4%, and non-residential roofing product sales increased 8.5% compared to the prior year. Calendar years 2021 and 2020 had 253 and 254 business days, respectively.

Gross margin improved to 26.7% in 2021, from 24.4% in the prior year, primarily reflecting pricing execution and price-cost improvement. 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 the positive impact of productivity initiatives and cost focus. 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, 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 $241.9 million, compared to $(9.9) million in the prior year. Adjusted EBITDA was $685.9 million, compared to $464.6 million in the prior year. EPS was $2.69 in 2021, compared to $(0.49) in the prior year.

For the full results, click here.

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 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.

Contact:

Jennifer Lewis – Vice President Communications & Corporate Social Responsibility – Jennifer.Lewis@becn.com – (571) 752-1048

Source: Beacon Roofing Supply, Inc.