Beacon Reports Record Fourth Quarter and Full Year Net Sales

Beacon (the “Company”, “we”, “our”), the leading publicly-traded wholesale distributor specializing in roofing, waterproofing, and related exterior products, announced results for the fourth quarter and full year ended December 31, 2024 (“2024”).

• Ambition 2025 initiatives delivered growth in a challenging environment with higher sales across all business lines
• Strong execution drove fourth quarter results, with contributions from operational excellence initiatives and newly opened greenfield and acquired branches
• Margin enhancing private label and digital channel achieved record fourth quarter and full year sales and penetration
• Strong fourth quarter cash flow, prudent balance sheet management, and ample liquidity
• Management to provide strategic review, growth drivers and financial targets at Investor Day on March 13^th

“Despite the challenging economic environment in 2024, we delivered record fourth quarter and full year sales and our highest fourth quarter Adjusted EBITDA in history,” said Julian Francis, Beacon’s President & CEO. “Since the announcement of our Ambition 2025 plan, we have faced the effects of a global pandemic, near-record levels of inflation, escalating interest rates, and an increasingly challenging housing market. Notwithstanding these headwinds, our Ambition 2025 plan has delivered multiple paths of growth every year and across all of our business lines. We have also continued to meet our targets, including reporting year-over-year net sales growth for the last 16 quarters, highlighting the resilience of our business model. Moreover, our strong balance sheet capacity provided the flexibility to invest in our future growth including continued high levels of growth-oriented capital expenditures and enhancements to our operational capabilities, including sales productivity, working capital management, and our pricing model. This investment supported the opening of 19 greenfield locations and the acquisition of 42 branches, enhancing our customer reach and service. Our achievements to date wouldn’t have been possible without the unwavering focus of the entire Beacon team, and I’m incredibly proud of our team members for delivering high caliber customer service, while expanding sales through our digital platform and private label program.

“In addition, during 2024, we returned $225 million in capital to shareholders through common share repurchases while subsequently reducing debt leverage to our target range as of December 31, 2024. We ended the year with strong fourth quarter cash generation, providing ample ability to deploy capital to both profitable growth and shareholder returns. Looking ahead, our markets are large and attractive, and we are poised to accelerate our successful strategy in 2025 and beyond. Our 8,000 team members stand ready to help our customers build more, and we look forward to leveraging opportunities and enhancing value for all stakeholders.”

Fourth Quarter

Net sales increased to $2.40 billion, 4.5% (2.8% on a per-day basis) growth compared to the prior year, and a Company record for fourth quarter net sales. Weighted-average selling price increased approximately 1-2%, while estimated organic volumes, including greenfields, decreased approximately 1-2% (3-4% on a per-day basis). Additionally, acquired branches contributed approximately 5.0% to the increase in fourth quarter net sales.

Residential roofing product sales increased 0.8% (decreased 0.8% on a per-day basis), non-residential roofing product sales increased 5.5% (3.8% on a per-day basis), and complementary product sales increased 11.7% (9.9% on a per-day basis) compared to the prior year. The increase in residential roofing product sales was primarily due to price execution. The increase in non-residential roofing product sales was primarily due to higher volumes driven by solid market execution driving above market growth. The increase in complementary product sales was largely due to two waterproofing acquisitions totaling 15 branches since December 31, 2023. The three-month periods ended December 31, 2024 and 2023 had 62 and 61 business days, respectively.

Gross margin of 25.7% remained unchanged from the prior year as higher average selling prices for our products were offset by higher product costs and a modestly higher non-residential product mix. The increases in operating expense and Adjusted Operating Expense were attributable to acquired branches, as well as higher organic selling, general, and administrative (“SG&A”) expense, including for greenfields. Acquired branches and greenfields contributed $22.8 million and $7.4 million, respectively, to the increase in SG&A expense. Organic SG&A expense, including greenfields, increased $1.6 million primarily due to an increase in warehouse operating costs, partially offset by a decrease in payroll and employee benefit costs. The increase in warehouse operating costs was primarily due to an increase in rent expense across our existing locations coupled with greenfields opened during the year, which contributed $2.5 million to the increase. The decrease in payroll and employee benefit costs was due to a reduction in headcount in response to market conditions at the end of the third quarter of 2024 resulting in a lower average number of employees during the fourth quarter of 2024. Organic SG&A expense also includes an increase in one-time acquisition and restructuring costs of $2.8 million. Excluding the increase in one-time acquisition and restructuring costs, organic SG&A expense decreased $1.2 million. Both operating expense as a percent of net sales and Adjusted Operating Expense as a percent of net sales were higher in 2024, primarily driven by the same factors.

Net income (loss) was $83.6 million, compared to $95.1 million in the prior year. Adjusted EBITDA was $222.5 million, compared to $216.7 million in the prior year. Net income (loss) per common share (“EPS”) on a diluted basis was $1.32, compared to $1.47 in the prior year. Fourth quarter results compared to the prior year period were largely driven by higher operating expense, partially offset by higher net sales discussed above.

Year ended December 31, 2024

Net sales increased to $9.76 billion, 7.1% (6.2% on a per-day basis) growth compared to the prior year, a Company record. Estimated organic volumes, including greenfields, increased approximately 1-2% (0-1% on a per-day basis) and weighted-average selling price increased approximately 1-2%. Additionally, acquired branches contributed approximately 4.6% to the increase in net sales.

Residential roofing product sales increased 3.9% (3.1% on per-day basis), non-residential roofing product sales increased 11.6% (10.7% on a per-day basis), and complementary product sales increased 8.9% (8.0% on per-day basis) compared to the prior year. The increase in residential roofing product sales was primarily due to price execution. The increase in non-residential roofing product sales was primarily due to higher volumes driven by the impact of customer destocking in the prior year period and, to a lesser extent, solid market execution driving above market growth. The increase in complementary product sales was largely due to two waterproofing acquisitions totaling 15 branches since December 31, 2023. The years ended December 31, 2024 and 2023 had 254 and 252 business days, respectively.

Gross margin of 25.7% remained unchanged from the prior year as higher average selling prices for our products were offset by higher product costs and a modestly higher non-residential product mix. The increases in operating expense and Adjusted Operating Expense were attributable to acquired branches, as well as higher organic SG&A expense. Acquired branches and greenfields contributed $75.8 million and $34.0 million, respectively, to the increase in SG&A expense. Organic SG&A expense increased $107.5 million primarily due to higher payroll and employee benefit costs, warehouse operating costs, and general and administrative expenses. The increase in payroll and employee benefit costs was due to higher average headcount during the year and, to a lesser extent, one-time severance payments and employee benefit costs for employees impacted by our operating cost reduction initiative executed at the end of the third quarter 2024. While our cost reduction initiative resulted in a one-time increase to SG&A expense in 2024, these actions are expected to yield annualized cost savings of $45 million, approximately $30 million of which will be realized in 2025. The increase in warehouse operating costs was primarily due to an increase in rent expense across our existing locations coupled with greenfields opened during the year, which contributed $10.2 million to the increase. The increase in general and administrative expenses was primarily due to an increase in acquisition-related costs of $5.1 million, costs attributable to greenfields of $2.7 million, and higher professional fees. Organic SG&A expense also includes an increase in one-time acquisition and restructuring costs of $19.2 million. Excluding the increase in one-time acquisition and restructuring costs, organic SG&A expense increased $88.3 million. Both operating expense as a percent of net sales and Adjusted Operating Expense as a percent of net sales were higher in 2024, primarily driven by the same factors.

Net income (loss) was $361.7 million, compared to $435.0 million in the prior year. Adjusted EBITDA was $930.2 million, compared to $929.6 million in the prior year. Diluted EPS was $5.68, compared to $(0.43) in the prior year. The negative diluted EPS in the prior year was attributable to the $414.6 million Repurchase Premium recognized in connection with the Preferred Stock repurchase, which is included as a component of net income (loss) attributable to common stockholders in calculating EPS. Full year results compared to the prior year were largely driven by higher operating expense, partially offset by higher net sales discussed above.

On May 9, 2024, the Company entered into an accelerated share repurchase (“ASR”) agreement to repurchase $225.0 million of its common stock. During the second quarter of 2024, the Company repurchased and retired 1,927,608 shares of its common stock representing 80% of the total expected share repurchases under the ASR. On December 27, 2024, the Company completed the ASR and received an additional 497,654 shares of its common stock. In total, 2,425,262 shares of the Company’s common stock were delivered under the ASR. As a result, shares of common stock outstanding decreased to 61.5 million as of December 31, 2024, from 63.3 million as of December 31, 2023.

To calculate approximate weighted average selling price and product cost changes, we review organic U.S. warehouse sales of the same items sold regionally period over period and normalize the data for non-representative outliers. To calculate estimated volumes, we subtract the change in weighted average selling price, as described above, from the total changes in sales, excluding acquisitions and dispositions. As a result, and especially in high inflationary periods, the weighted average selling price and estimated volume changes may not be directly comparable to changes reported in prior periods.

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.

For full results 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 530 branches throughout all 50 states in the U.S. and 6 provinces in Canada. Beacon serves an extensive base of nearly 100,000 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:

Jennifer Lewis – VP, Communications and Corporate Social Responsibility – jennifer.lewis@becn.com – (571) 752-1048

Source: Beacon Roofing Supply, Inc.