Announces Preliminary Above Expectations
Results for Fourth Quarter and Full Year 2023
Exceeded Ambition 2025 Revenue and Shareholder
Return Targets in 2023
Announces Preliminary 2024 Outlook
HERNDON,
Va., Jan. 10, 2024 /PRNewswire/ --
Beacon (Nasdaq: BECN) (the "Company", "we," "us" or "our") is
announcing the appointment of Carmelo
Carrubba, Beacon's current Vice President of Strategy and
Transformation, as Interim Chief Financial Officer, effective
January 20, 2024. Beacon is also
announcing its estimated preliminary results for the quarter and
full year ended December 31, 2023 and
its preliminary 2024 outlook.
Appointment of Carmelo
Carrubba as Interim Chief Financial Officer
Beacon today announced the appointment of Carmelo Carrubba, Beacon's current Vice
President of Strategy and Transformation, as Interim Chief
Financial Officer, effective January 20,
2024, while the Company conducts an external search for its
next Chief Financial Officer. "I'm delighted that Carmelo has
accepted this interim responsibility and look forward to working
with him in this expanded role until a permanent CFO has been
appointed," said Julian Francis,
Beacon's President and CEO. The Company previously announced that
Executive Vice President & Chief Financial Officer Frank Lonegro will be leaving the Company
effective February 1, 2024 to become
the chief executive officer of a publicly traded company outside of
the building products industry.
Mr. Carrubba joined Beacon in April
2022 as Vice President of Strategy and Transformation and as
a member of Beacon's Executive Committee. In these key leadership
positions, Mr. Carrubba shares responsibility for creating and
supporting the value creation framework to drive the successful
execution of Beacon's Ambition 2025. Mr. Carrubba has extensive
executive, functional and operational experience, having joined
Beacon from Glatfelter, a US publicly-traded leading manufacturer
of engineered materials, where he served as Vice President of
Strategy and Sustainability, after serving in a similar role at
Jacob Holm, a privately-held engineered material manufacturer,
where he served as Corporate Vice President of Strategy and
Sustainability. Prior to Jacob Holm, Mr. Carrubba spent 14 years
within the exteriors industry at publicly traded Owens Corning,
serving in various roles of increasing responsibility including
strategic planning, general management with full P&L
responsibilities, global commercial excellence director and Vice
President of Strategic Marketing. While at Owens Corning, he also
oversaw the deployment and execution of several major capital
investments ranging in size from $10
million to $150 million. Mr.
Carrubba also worked as a Manager for Bain & Company. He holds
a B.A. in Economics and Business Administration from the
University of Catania in Catania, Italy and an M.B.A. from INSEAD, Singapore and Fontainebleau, France.
Preliminary Results for Fourth Quarter and Full Year
2023
Beacon's net sales for the quarter ended December 31, 2023 are expected to be
approximately $2.3 billion. Gross
margins for the quarter ended December 31,
2023 are expected to be approximately 25.7%. Net income for
the quarter ended December 31, 2023
is estimated to range between $92
million and $96 million.
Diluted net income per share is expected to range between
$1.42 to $1.48 per share. Adjusted EBITDA for the quarter
ended December 31, 2023 is estimated
to range between $212 million and
$217 million. Reconciliations of the
Adjusted EBITDA ranges in this release to the most directly
comparable GAAP financial measures are attached to this press
release.
Net sales for the full year ended December 31, 2023 are expected to be
approximately $9.1 billion. Gross
margins for the full year ended December 31,
2023 are expected to be approximately 25.6%. Net income for
the full year ended December 31, 2023
is estimated to range between $432
million and $436 million.
Diluted net income per share is expected to range between
$(0.48) to $(0.42) per share. Adjusted EBITDA for the full
year ended December 31, 2023 is
estimated to range between $925
million and $930 million.
These quarter and full year results are at the high end of the
Company's previously issued guidance primarily due to higher
revenue. "This performance demonstrates the team's continued high
level of execution on Ambition 2025 in a dynamic macroenvironment,"
said Julian Francis, Beacon's
President and CEO.
The Company anticipates announcing final earnings results for
the quarter and full year ended December 31,
2023 on or about February 27,
2024.
The above fourth quarter and full year results are still
preliminary and subject to the Company's detailed quarter and
year-end close procedures. The Company's consolidated financial
statements as of, and for the three and twelve months ended
December 31, 2023 are not yet
available. Accordingly, the information presented above reflects
the Company's preliminary estimates subject to the completion of
the Company's financial closing procedures and any adjustments that
may result from the completion of the quarterly and annual review
of the Company's consolidated financial statements. As a result,
these preliminary estimates may differ from the actual results that
will be reflected in the Company's consolidated financial
statements for the fourth quarter and full year when they are
completed and publicly disclosed. These preliminary estimates may
change, and those changes may be material. The Company's
expectations with respect to its unaudited results for the periods
discussed above are based on management estimates. The Company's
independent registered public accounting firm has not audited,
reviewed or performed any procedures with respect to these
preliminary estimates and, accordingly, does not express an opinion
or any other form of assurance about them.
Preliminary 2024 Outlook
While Beacon expects a mixed market environment, it currently
expects to deliver low single-digit top line growth in 2024,
exclusive of new acquisitions in 2024. Beacon expects that sales
growth in 2024 will be driven primarily by our Ambition 2025
initiatives, including greenfields and previously announced
acquisitions, price carryover, and the benefit of two additional
selling days in 2024, partially offset by expectations of
weather-related demand resetting to the 10-year average and a
slowdown in new multi-family and non-residential starts.
With relatively stable gross margins year over year, the Company
currently expects full year 2024 Adjusted EBITDA to grow by low
single digits versus the Company's record performance in 2023. The
Company expects to further refine this guidance in connection with
its fourth quarter earnings release, reflecting, among other
things, the completion of quarter-end close procedures, the
Company's performance in January and February 2024, any acquisitions completed in the
first quarter, and the Company's continuing assessment of
macroeconomic conditions.
The Company expects to continue its execution of its Ambition
2025 initiatives in 2024, including investments in tuck-in
acquisitions and greenfields, enhancements to its sales
organizations, expansion of its digital and private label
offerings, growth in its national accounts business, initial
deployment of the Company's pricing model, and driving productivity
through branch optimization efforts and Bottom Quintile Branch
improvements. Capital expenditure levels are expected to remain
generally in line with 2023.
The preliminary full year 2024 financial outlook estimates
described above are based on information available to management as
of the date hereof, and as a result, these expectations could
change.
Forward-Looking Statements
This release contains information about management's view of the
Company's future expectations, plans and prospects that constitute
forward-looking statements for purposes of the safe harbor
provisions under the Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by the fact that
they do not relate strictly to historic or current facts and often
use words such as "anticipate," "estimate," "expect," "believe,"
"will," "outlook," "project" and other words and expressions of
similar meaning. Examples of forward-looking statements include
statements about the Company's preliminary estimates for its fourth
quarter and full year 2023 financial results, and 2024 financial
outlook and prospects. Investors are cautioned not to place undue
reliance on forward-looking statements. Actual results may differ
materially from those indicated by such forward-looking statements
as a result of various important factors, including, but not
limited to, those set forth in the "Risk Factors" section of the
Company's Form 10-K for the fiscal year ended December 31, 2022 and subsequent filings with the
U.S. Securities and Exchange Commission. The Company may not
succeed in addressing these and other risks. Consequently, all
forward-looking statements in this release are qualified by the
factors, risks and uncertainties contained therein. In addition,
the forward-looking statements included in this press release
represent the Company's views as of the date of this press release
and these views could change. However, while the Company may elect
to update these forward-looking statements at some point, the
Company specifically disclaims any obligation to do so, other than
as required by federal securities laws. These forward-looking
statements should not be relied upon as representing the Company's
views as of any date subsequent to the date of this press
release.
Non-GAAP Financial Measures
This press release contains Company estimates of and outlook for
Adjusted EBITDA, a financial measure that is not presented in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"). For definitions of these terms, an explanation
of why we use the measure Adjusted EBITDA, the material limitations
of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net
income, the most directly comparable GAAP financial measure, please
see the Appendix to this press release.
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 500 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.
INVESTOR CONTACT
Binit Sanghvi
VP, Capital Markets and Treasurer
Binit.Sanghvi@becn.com
972-369-8005
MEDIA CONTACT
Jennifer Lewis
VP, Communications and Corporate Social Responsibility
Jennifer.Lewis@becn.com
571-752-1048
BEACON ROOFING SUPPLY, INC.
We define Adjusted EBITDA as net income (loss), the most
directly comparable financial measure as measured in accordance
with GAAP, less the impact of interest expense (net of interest
income), income taxes, depreciation and amortization, stock-based
compensation, and other adjusting items. The following table
presents a reconciliation of net income (loss) to Adjusted EBITDA
for each of the periods indicated, including the estimated expected
range for the quarter ended December 31,
2023:
|
Three Months
Ended
|
|
3/31/2023
|
|
6/30/2023
|
|
9/30/2023
|
|
12/31/2023
|
(Unaudited; in
millions)
|
|
|
|
|
|
|
Low
|
|
High
|
Net income
(loss)
|
$
24.8
|
|
$
153.8
|
|
$
161.3
|
|
$
92
|
|
$
96
|
Income
taxes
|
8.0
|
|
54.5
|
|
57.3
|
|
30
|
|
31
|
Interest expense,
net
|
29.0
|
|
27.6
|
|
36.4
|
|
39
|
Depreciation and
amortization
|
43.0
|
|
43.2
|
|
44.5
|
|
45
|
Stock-based
compensation
|
6.0
|
|
8.3
|
|
7.9
|
|
6
|
Adjusting
items1
|
2.2
|
|
2.9
|
|
2.2
|
|
—
|
Adjusted
EBITDA
|
$
113.0
|
|
$
290.3
|
|
$
309.6
|
|
$
212
|
|
$
217
|
|
|
|
|
|
|
|
|
|
1.
|
Composed of acquisition
and restructuring costs.
|
The following table presents the estimated expected range of
Adjusted EBITDA for the year ending December
31, 2023:
|
Year
Ending
December 31,
2023
|
(Unaudited; in
millions)
|
Low
|
|
High
|
Net income
(loss)
|
$
432
|
|
$
436
|
Income taxes
|
150
|
|
151
|
Interest expense,
net
|
132
|
Depreciation and
amortization
|
176
|
Stock-based
compensation
|
28
|
Adjusting
Items1
|
7
|
Adjusted
EBITDA
|
$
925
|
|
$
930
|
|
|
|
|
|
|
|
|
|
1.
|
Composed of acquisition
and restructuring costs.
|
We use Adjusted EBITDA to evaluate financial performance,
analyze the underlying trends in our business and establish
operational goals and forecasts that are used when allocating
resources. We expect to compute Adjusted EBITDA consistently using
the same methods each period.
We believe that Adjusted EBITDA is a useful measure because
it permits investors to better understand changes over comparative
periods by providing financial results that are unaffected by
certain items that are not indicative of ongoing operating
performance.
While we believe Adjusted EBITDA is useful to investors when
evaluating our business, it is not prepared and presented in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"), and therefore should be considered
supplemental in nature. Adjusted EBITDA should not be considered in
isolation or as a substitute for other financial performance
measures presented in accordance with GAAP. Adjusted EBITDA may
have material limitations including, but not limited to, the
exclusion of certain costs without a corresponding reduction of net
income for the income generated by the assets to which the excluded
costs relate. In addition, Adjusted EBITDA may differ from
similarly titled measures presented by other companies.
SOURCE Beacon Roofing Supply, Inc.