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Beacon Reports First Quarter 2023 Results

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

Beacon (Nasdaq: BECN) (the “Company”, “we”, “our”) announced results today for the first quarter ended March 31, 2023.

“Record first quarter net sales demonstrated the strength of our business model and the multiple levers of growth we laid out at our Investor Day last year,” said Julian Francis, Beacon’s President & CEO. “Our growth and customer experience initiatives helped drive the 13th straight quarter of year-over-year sales improvement. We made strategic investments, both organic and inorganic, expanding our branch footprint and customer reach. Our strong cash generation in the first quarter provided the liquidity for us to repurchase additional shares under our recently expanded share buyback authorization announced in February. Our balanced allocation of capital demonstrates our commitment to creating shareholder value and confidence in our Ambition 2025 strategic plan. Looking forward, the fundamentals of residential and commercial re-roofing demand remain supportive, while headwinds related to new single-family residential construction and commercial contractor destocking are expected to persist near-term. More importantly, we remain focused on driving the initiatives that are within our control to deliver value for our shareholders and customers. I am pleased with the team’s achievements in the first quarter of the year and look forward to helping our customers build more as we enter a key part of the construction season.”

  • Record first quarter net sales driven by execution on Ambition 2025 growth initiatives, including acquisitions and greenfields
  • Stable pricing environment, combined with higher product costs reflective of inventory profit roll-off, yielded forecasted gross margin
  • Strong operating cash flow generation from substantial cash collections and continued inventory rightsizing
  • Continued emphasis on shareholder returns through execution of our recently expanded share buyback program

First Quarter Financial Highlights

First Quarter

Net sales increased 2.7% (1.1% on a per-day basis) compared to the prior year to $1.73 billion, a company record for net sales for the first quarter. First quarter sales increased compared to the prior year period driven by higher prices and the contributions of acquired and newly opened branches over the last four quarters. Weighted-average selling price increased approximately 9-10%, while estimated organic volumes decreased approximately 11-12% (12-13% on a per-day basis).

Residential roofing product sales increased 0.4% (decreased 1.2% on a per-day basis), non-residential roofing product sales decreased 7.8% (9.2% on a per-day basis), and complementary product sales increased 22.7% (20.8% on a per-day basis) compared to the prior year. The increase in complementary product sales was largely due to the November 2022 acquisition of Coastal Construction Products. The three-month periods ending March 31, 2023 and 2022 had 64 and 63 business days, respectively.

Gross margin decreased to 25.5%, from 26.1% in the prior year, as higher product costs related to the inventory profit roll-off in a stable price environment more than offset higher average selling prices for our products. The increase in operating expense and Adjusted Operating Expense was primarily due to increases to support new and acquired branches. Inflation and higher selling, general and administrative expenses also contributed to the increase. Both operating expense as a percent of sales and Adjusted Operating Expense as a percent of sales were higher in the first quarter of 2023, driven by the same factors.

Net income (loss) was $24.8 million, compared to $55.8 million in the prior year. Adjusted EBITDA was $113.0 million, compared to $139.5 million in the prior year. EPS was $0.25, compared to $0.61 in the prior year. First quarter results compared to the prior year period were impacted by higher operating expenses.

In February 2023, Beacon announced the authorization of an increase in its share repurchase program, pursuant to which the Company may purchase up to $500 million of its common stock (inclusive of the $112 million remaining authorization under the program announced in February 2022). In the first quarter of 2023, the Company repurchased and retired $23.1 million of its common stock on the open market through a Rule 10b5-1 repurchase plan. As a result, shares of common stock outstanding decreased, net of issuance, to 64.0 million as of March 31, 2023, from 64.2 million as of December 31, 2022.

For the complete press release, click here.

About Beacon

Founded in 1928, Beacon is a Fortune 500, publicly traded distributor of building products, including roofing materials and complementary products, such as siding and waterproofing. The Company operates over 470 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 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:

Binit Sanghvi – VP, Capital Markets and Treasurer – Binit.Sanghvi@becn.com – (972) 369-8005

Source: Beacon Roofing Supply, Inc.