Business Wire | May 6, 2021 04:00PM EDT

Beacon Reports Second Quarter 2021 Results

May 06, 2021

HERNDON, Va.--(BUSINESS WIRE)--May 06, 2021--Beacon (Nasdaq: BECN) (the "Company") announced results today for its second quarter and six-month period ended March 31, 2021.

Second Quarter and Year-to-Date Financial Highlights

Q2 2021 Q2 2020 YTD 2021 YTD 2020

(Unaudited; $ inmillions, except per share amounts)

Net sales $ 1,318.0 $ 1,197.1 $ 2,894.5 $ 2,612.5

Gross profit $ 332.8 $ 270.4 $ 732.5 $ 610.6

Gross margin % 25.3 % 22.6 % 25.3 % 23.4 %



Operating expense $ 310.0 $ 446.0 $ 614.6 $ 767.1

% of net sales 23.5 % 37.3 % 21.2 % 29.4 %

Adjusted Operating $ 278.2 $ 274.0 $ 554.1 $ 559.2 Expense^1

% of net sales^1 21.1 % 22.9 % 19.1 % 21.4 %



Net income (loss) from $ (10.5 ) $ (121.3 ) $ 36.9 $ (145.3 )continuing operations

% of net sales (0.8 %) (10.1 %) 1.3 % (5.6 %)

Adjusted Net Income $ 22.1 $ (22.4 ) $ 93.1 $ (4.2 )(Loss)^1

% of net sales^1 1.7 % (1.9 %) 3.2 % (0.2 %)

Adjusted EBITDA^1 $ 74.4 $ 22.1 $ 217.2 $ 98.9

% of net sales^1 5.6 % 1.8 % 7.5 % 3.8 %



Net income (loss) fromcontinuing operations $ (0.24 ) $ (1.85 ) $ 0.35 $ (2.29 )per share - diluted("EPS")

___________________________

Please see the included financial tables for a reconciliation of "Adjusted"^ non-GAAP financial measures to the most directly comparable GAAP financial1 measure, as well as further detail on the components driving the net changes over the comparative periods.

"Continued execution by our team resulted in impressive second quarter performance," said Julian Francis, Beacon's President and Chief Executive Officer. "Strong residential demand and effective sales and pricing performance drove record second quarter net sales. I am particularly pleased with our gross margin performance, cost management and the operating leverage we generated on higher sales, the combination of which led to record second quarter Adjusted EBITDA. Our quarterly results, coupled with the successful divestiture of our Interior Products business, have allowed us to significantly reduce leverage, strengthen our balance sheet and sharpen our focus on the growth and profitability of our exteriors business. We are excited about our progress and look forward to a very successful 2021 as we continue to help our customers build more."

Second Quarter

Net sales increased 10.1% compared to the prior year, despite one fewer selling day. The second quarter sales increase reflects strong residential roofing and complementary products growth as well as the successful implementation of price increases, partially offset by softer demand for non-residential products. Residential roofing product sales increased 18.7%, complementary product sales increased 9.4%, and non-residential roofing product sales decreased 4.1% compared to the prior year. The second quarter of fiscal 2021 and 2020 had 63 and 64 business days, respectively.

Gross margin improved from 22.6% in the prior year to 25.3%, primarily reflecting pricing execution driving price-cost improvement. Operating expense decreased in the second quarter primarily due to the write-off of certain trade names in connection with the Company's rebranding efforts in the prior period. Adjusted Operating Expense was slightly higher due to increased incentive compensation and benefits cost, partially offset by lower travel and entertainment expense. Both operating expense and Adjusted Operating Expense decreased as a percent of sales, reflecting the positive impact of productivity initiatives and cost focus amid an increasing demand environment.

Net income (loss) from continuing operations was $(10.5) million, compared to $(121.3) million in 2020. Adjusted EBITDA was $74.4 million, compared to $22.1 million in 2020. EPS was $(0.24), compared to $(1.85) in 2020. Comparative improvements in second quarter results were driven by restructuring costs of rebranding in the prior year period as well as increased net sales, particularly within residential end markets, higher gross margins and operating leverage. These impacts were partially offset by sales declines within non-residential roofing.

Year-to-Date

Net sales increased 10.8% compared to the prior year, despite one fewer selling day. Residential roofing product sales increased 20.1%, complementary product sales increased 9.1%, and non-residential roofing product sales decreased 3.7% compared to the prior year. The first half of fiscal 2021 and 2020 had 125 and 126 business days, respectively.

Gross margin improved from 23.4% in the prior year to 25.3%. 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 effective cost control. Adjusted Operating Expense decreased compared to the first half of 2020, primarily as a result of effective cost management, partially offset by higher payroll and benefits. Both operating expense and Adjusted Operating Expense decreased as a percent of sales, reflecting the positive impact of productivity initiatives and cost focus amid an increasing demand environment.

Net income (loss) from continuing operations was $36.9 million, compared to $(145.3) million in 2020. Adjusted EBITDA was $217.2 million, compared to $98.9 million in 2020. EPS was $0.35, compared to $(2.29) in 2020.

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.

Earnings Call

The Company will host a conference call and webcast today at 5:00 p.m. ET to discuss these results. Details for the earnings release event are as follows:

What: Beacon Second Quarter 2021 Earnings Call

When: Thursday, May 6, 2021

Time: 5:00 p.m. ET

Access: Register for the conference call or webcast by visiting: Beacon Investor Relations - Events & Presentations

Upon registration, participants will receive an email containing event details and unique access codes. To ensure timely access, participants should register for the earnings call at least 10 minutes before the 5:00 p.m. ET start time. An archived copy of the webcast will be available on the Events & Presentations page shortly after the call.

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. 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 September 30, 2020. 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.

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 90,000 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

BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Operations

(Unaudited; in millions, except per share amounts)

Three Months Ended March 31, Six Months Ended March 31,

% of % of % of % of 2021 Net 2020 Net 2021 Net 2020 Net Sales Sales Sales Sales

Net sales $ 1,318.0 100.0 % $ 1,197.1 100.0 % $ 2,894.5 100.0 % $ 2,612.5 100.0 %

Cost of products sold 985.2 74.7 % 926.7 77.4 % 2,162.0 74.7 % 2,001.9 76.6 %

Gross profit 332.8 25.3 % 270.4 22.6 % 732.5 25.3 % 610.6 23.4 %

Operating expense:

Selling, general and 267.8 20.3 % 262.7 22.0 % 533.0 18.4 % 536.0 20.5 %administrative

Depreciation 14.6 1.1 % 14.5 1.2 % 28.5 1.0 % 30.3 1.2 %

Amortization 27.6 2.1 % 168.8 14.1 % 53.1 1.8 % 200.8 7.7 %

Total operating 310.0 23.5 % 446.0 37.3 % 614.6 21.2 % 767.1 29.4 %expense

Income (loss) from 22.8 1.8 % (175.6 ) (14.7 %) 117.9 4.1 % (156.5 ) (6.0 %)operations

Interest expense,financing costs, and 28.6 2.3 % 23.6 1.9 % 58.6 2.1 % 62.1 2.4 %other

Loss on debt 9.5 0.7 % - 0.0 % 9.5 0.3 % 14.7 0.6 %extinguishment

Income (loss) fromcontinuing operations (15.3 ) (1.2 %) (199.2 ) (16.6 %) 49.8 1.7 % (233.3 ) (9.0 %)before income taxes

Provision for(benefit from) income (4.8 ) (0.4 %) (77.9 ) (6.5 %) 12.9 0.4 % (88.0 ) (3.4 %)taxes

Net income (loss)from continuing (10.5 ) (0.8 %) (121.3 ) (10.1 %) 36.9 1.3 % (145.3 ) (5.6 %)operations

Net income (loss)from discontinued 4.2 0.3 % (1.3 ) (0.1 %) (263.7 ) (9.2 %) (0.7 ) 0.0 %operations

Net income (loss) (6.3 ) (0.5 %) (122.6 ) (10.2 %) (226.8 ) (7.9 %) (146.0 ) (5.6 %)

Dividends on 6.0 0.4 % 6.0 0.5 % 12.0 0.4 % 12.0 0.4 %Preferred Stock

Net income (loss)attributable to $ (12.3 ) (0.9 %) $ (128.6 ) (10.7 %) $ (238.8 ) (8.3 %) $ (158.0 ) (6.0 %)common shareholders



Weighted-averagecommon stock outstanding:

Basic 69.6 68.8 69.4 68.7

Diluted 69.6 68.8 70.3 68.7



Net income (loss) per share:

Basic - Continuing $ (0.24 ) $ (1.85 ) $ 0.36 $ (2.29 ) operations

Basic - Discontinued 0.06 (0.02 ) (3.80 ) (0.01 ) operations

Basic net income $ (0.18 ) $ (1.87 ) $ (3.44 ) $ (2.30 ) (loss) per share



Diluted - Continuing $ (0.24 ) $ (1.85 ) $ 0.35 $ (2.29 ) operations

Diluted -Discontinued 0.06 (0.02 ) (3.75 ) (0.01 ) operations

Diluted net income $ (0.18 ) $ (1.87 ) $ (3.40 ) $ (2.30 ) (loss) per share

BEACON ROOFING SUPPLY, INC.

Consolidated Balance Sheets

(Unaudited; in millions)

March 31,

September 30,

March 31,

2021

2020

2020

Assets

Current assets:

Cash and cash equivalents

$

619.3

$

624.6

$

781.2

Accounts receivable, net

759.5

885.2

753.2

Inventories, net

1,087.1

871.4

951.2

Prepaid expenses and other current assets

312.2

351.8

273.1

Current assets held for sale

-

243.8

273.3

Total current assets

2,778.1

2,976.8

3,032.0

Property and equipment, net

218.9

207.8

206.7

Goodwill

1,761.3

1,756.1

1,754.3

Intangibles, net

465.0

518.0

579.1

Operating lease assets

368.5

376.2

387.6

Deferred income taxes, net

90.2

-

-

Other assets, net

6.4

2.1

-

Non-current assets held for sale

-

1,120.5

1,150.3

Total assets

$

5,688.4

$

6,957.5

$

7,110.0

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

689.0

$

885.8

$

587.8

Accrued expenses

575.8

509.7

316.6

Current operating lease liabilities

85.2

84.0

82.6

Current portions of long-term debt/obligations

10.7

12.3

13.4

Current liabilities held for sale

-

139.4

117.4

Total current liabilities

1,360.7

1,631.2

1,117.8

Borrowings under revolving lines of credit, net

-

251.1

1,001.6

Long-term debt, net

2,079.3

2,494.2

2,494.8

Deferred income taxes, net

-

71.8

43.0

Non-current operating lease liabilities

283.0

290.5

301.9

Long-term obligations under equipment financing, net

-

-

1.0

Other long-term liabilities

12.9

5.2

0.3

Non-current liabilities held for sale

-

53.4

56.2

Total liabilities

3,735.9

4,797.4

5,016.6

Convertible Preferred Stock

399.2

399.2

399.2

Stockholders' equity:

Common stock

0.7

0.7

0.7

Undesignated preferred stock

-

-

-

Additional paid-in capital

1,126.2

1,100.6

1,091.4

Retained earnings

451.2

694.3

641.2

Accumulated other comprehensive income (loss)

(24.8

)

(34.7

)

(39.1

)

Total stockholders' equity

1,553.3

1,760.9

1,694.2

Total liabilities and stockholders' equity

$

5,688.4

$

6,957.5

$

7,110.0

BEACON ROOFING SUPPLY, INC.

Consolidated Balance Sheets

(Unaudited; in millions)

March 31, September March 31, 30,

2021 2020 2020

Assets

Current assets:

Cash and cash equivalents $ 619.3 $ 624.6 $ 781.2

Accounts receivable, net 759.5 885.2 753.2

Inventories, net 1,087.1 871.4 951.2

Prepaid expenses and other current assets 312.2 351.8 273.1

Current assets held for sale - 243.8 273.3

Total current assets 2,778.1 2,976.8 3,032.0

Property and equipment, net 218.9 207.8 206.7

Goodwill 1,761.3 1,756.1 1,754.3

Intangibles, net 465.0 518.0 579.1

Operating lease assets 368.5 376.2 387.6

Deferred income taxes, net 90.2 - -

Other assets, net 6.4 2.1 -

Non-current assets held for sale - 1,120.5 1,150.3

Total assets $ 5,688.4 $ 6,957.5 $ 7,110.0



Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 689.0 $ 885.8 $ 587.8

Accrued expenses 575.8 509.7 316.6

Current operating lease liabilities 85.2 84.0 82.6

Current portions of long-term debt/ 10.7 12.3 13.4 obligations

Current liabilities held for sale - 139.4 117.4

Total current liabilities 1,360.7 1,631.2 1,117.8

Borrowings under revolving lines of - 251.1 1,001.6 credit, net

Long-term debt, net 2,079.3 2,494.2 2,494.8

Deferred income taxes, net - 71.8 43.0

Non-current operating lease liabilities 283.0 290.5 301.9

Long-term obligations under equipment - - 1.0 financing, net

Other long-term liabilities 12.9 5.2 0.3

Non-current liabilities held for sale - 53.4 56.2

Total liabilities 3,735.9 4,797.4 5,016.6



Convertible Preferred Stock 399.2 399.2 399.2



Stockholders' equity:

Common stock 0.7 0.7 0.7

Undesignated preferred stock - - -

Additional paid-in capital 1,126.2 1,100.6 1,091.4

Retained earnings 451.2 694.3 641.2

Accumulated other comprehensive income (24.8 ) (34.7 ) (39.1 )(loss)

Total stockholders' equity 1,553.3 1,760.9 1,694.2

Total liabilities and stockholders' $ 5,688.4 $ 6,957.5 $ 7,110.0 equity

BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Cash Flows1

(Unaudited; in millions)

Six Months Ended March 31,

2021

2020

Operating Activities

Net income (loss)

$

(226.8

)

$

(146.0

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

94.7

268.7

Stock-based compensation

12.2

9.8

Certain interest expense and other financing costs

5.6

5.7

Loss on debt extinguishment

9.5

14.7

Gain on sale of fixed assets and other

(1.4

)

(0.9

)

Deferred income taxes

(164.6

)

(49.4

)

Loss on sale of Interior Products

357.8

-

338(h)(10) election refund

-

(5.3

)

Changes in operating assets and liabilities:

Accounts receivable

137.7

199.1

Inventories

(227.0

)

(21.8

)

Prepaid expenses and other current assets

45.4

6.5

Accounts payable and accrued expenses

(167.6

)

(434.9

)

Other assets and liabilities

1.4

3.0

Net cash provided by (used in) operating activities

(123.1

)

(150.8

)

Investing Activities

Purchases of property and equipment

(32.1

)

(25.0

)

Proceeds from sale of Interior Products

837.0

-

Proceeds from the sale of assets

1.5

1.1

Net cash provided by (used in) investing activities

806.4

(23.9

)

Financing Activities

Borrowings under revolving lines of credit

2.3

2,029.3

Payments under revolving lines of credit

(259.3

)

(1,109.9

)

Payments under term loan

(428.8

)

(4.9

)

Borrowings under senior notes

-

300.0

Payment under senior notes

-

(309.6

)

Payment of debt issuance costs

-

(3.7

)

Payments under equipment financing facilities and finance leases

(3.4

)

(4.4

)

Payment of dividends on Preferred Stock

(12.0

)

(12.0

)

Proceeds from issuance of common stock related to equity awards

17.7

1.4

Payment of taxes related to net share settlement of equity awards

(4.3

)

(2.8

)

Net cash provided by (used in) financing activities

(687.8

)

883.4

Effect of exchange rate changes on cash and cash equivalents

(0.8

)

0.2

Net increase (decrease) in cash and cash equivalents

(5.3

)

708.9

Cash and cash equivalents, beginning of period

624.6

72.3

Cash and cash equivalents, end of period

$

619.3

$

781.2

Supplemental Cash Flow Information

Operating cash flows provided by (used in) discontinued operations

$

(28.2

)

$

19.2

Investing cash flows provided by (used in) discontinued operations

$

(2.5

)

$

(6.7

)

Cash paid during the period for:

Interest

$

56.5

$

63.7

Income taxes paid (received), net of refunds

$

17.9

$

(0.4

)

Supplemental disclosure of non-cash investing and financing activities

Finance lease liabilities arising from obtaining right-of-use assets

$

14.9

$

-

____________________

BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Cash Flows^1

(Unaudited; in millions)

Six Months Ended March 31,

2021 2020

Operating Activities

Net income (loss) $ (226.8 ) $ (146.0 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 94.7 268.7

Stock-based compensation 12.2 9.8

Certain interest expense and other financing costs 5.6 5.7

Loss on debt extinguishment 9.5 14.7

Gain on sale of fixed assets and other (1.4 ) (0.9 )

Deferred income taxes (164.6 ) (49.4 )

Loss on sale of Interior Products 357.8 -

338(h)(10) election refund - (5.3 )

Changes in operating assets and liabilities:

Accounts receivable 137.7 199.1

Inventories (227.0 ) (21.8 )

Prepaid expenses and other current assets 45.4 6.5

Accounts payable and accrued expenses (167.6 ) (434.9 )

Other assets and liabilities 1.4 3.0

Net cash provided by (used in) operating activities (123.1 ) (150.8 )



Investing Activities

Purchases of property and equipment (32.1 ) (25.0 )

Proceeds from sale of Interior Products 837.0 -

Proceeds from the sale of assets 1.5 1.1

Net cash provided by (used in) investing activities 806.4 (23.9 )



Financing Activities

Borrowings under revolving lines of credit 2.3 2,029.3

Payments under revolving lines of credit (259.3 ) (1,109.9 )

Payments under term loan (428.8 ) (4.9 )

Borrowings under senior notes - 300.0

Payment under senior notes - (309.6 )

Payment of debt issuance costs - (3.7 )

Payments under equipment financing facilities and (3.4 ) (4.4 )finance leases

Payment of dividends on Preferred Stock (12.0 ) (12.0 )

Proceeds from issuance of common stock related to 17.7 1.4 equity awards

Payment of taxes related to net share settlement of (4.3 ) (2.8 )equity awards

Net cash provided by (used in) financing activities (687.8 ) 883.4



Effect of exchange rate changes on cash and cash (0.8 ) 0.2 equivalents



Net increase (decrease) in cash and cash equivalents (5.3 ) 708.9

Cash and cash equivalents, beginning of period 624.6 72.3

Cash and cash equivalents, end of period $ 619.3 $ 781.2



Supplemental Cash Flow Information

Operating cash flows provided by (used in) $ (28.2 ) $ 19.2 discontinued operations

Investing cash flows provided by (used in) $ (2.5 ) $ (6.7 )discontinued operations

Cash paid during the period for:

Interest $ 56.5 $ 63.7

Income taxes paid (received), net of refunds $ 17.9 $ (0.4 )

Supplemental disclosure of non-cash investing and financing activities

Finance lease liabilities arising from obtaining $ 14.9 $ - right-of-use assets

____________________

Unless otherwise noted, amounts include both continuing and discontinued^1 operations.

BEACON ROOFING SUPPLY, INC.

Consolidated Sales by Product Line

(Unaudited; in millions)

Sales by Product Line

Three Months Ended March 31,

2021

2020

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

695.0

52.7

%

$

585.4

48.9

%

$

109.6

18.7

%

Non-residential roofing products

329.7

25.0

%

343.7

28.7

%

(14.0

)

(4.1

%)

Complementary building products

293.3

22.3

%

268.0

22.4

%

25.3

9.4

%

$

1,318.0

100.0

%

$

1,197.1

100.0

%

$

120.9

10.1

%

Sales by Business Day1,2

Three Months Ended March 31,

2021

2020

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

11.0

52.7

%

$

9.1

48.9

%

$

1.9

20.6

%

Non-residential roofing products

5.2

25.0

%

5.4

28.7

%

(0.2

)

(2.6

%)

Complementary building products

4.7

22.3

%

4.2

22.4

%

0.5

11.2

%

$

20.9

100.0

%

$

18.7

100.0

%

$

2.2

11.8

%

__________________________________________________

BEACON ROOFING SUPPLY, INC.

Consolidated Sales by Product Line

(Unaudited; in millions)

Sales by Product Line

Three Months Ended March 31,

2021 2020 Change

Net Sales Mix % Net Sales Mix % $ %

Residential roofing $ 695.0 52.7 % $ 585.4 48.9 % $ 109.6 18.7 %products

Non-residential 329.7 25.0 % 343.7 28.7 % (14.0 ) (4.1 %)roofing products

Complementary 293.3 22.3 % 268.0 22.4 % 25.3 9.4 %building products

$ 1,318.0 100.0 % $ 1,197.1 100.0 % $ 120.9 10.1 %



Sales by Business Day^1,2

Three Months Ended March 31,

2021 2020 Change

Net Sales Mix % Net Sales Mix % $ %

Residential roofing $ 11.0 52.7 % $ 9.1 48.9 % $ 1.9 20.6 %products

Non-residential 5.2 25.0 % 5.4 28.7 % (0.2 ) (2.6 %)roofing products

Complementary 4.7 22.3 % 4.2 22.4 % 0.5 11.2 %building products

$ 20.9 100.0 % $ 18.7 100.0 % $ 2.2 11.8 %

__________________________________________________

The second quarter of fiscal years 2021 and 2020 had 63 and 64 business^1 days, respectively.

^2 Dollar and percentage changes may not recalculate due to rounding.

Sales by Product Line

Six Months Ended March 31,

2021

2020

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

1,539.9

53.2

%

$

1,282.3

49.1

%

$

257.6

20.1

%

Non-residential roofing products

727.9

25.1

%

755.7

28.9

%

(27.8

)

(3.7

%)

Complementary building products

626.7

21.7

%

574.5

22.0

%

52.2

9.1

%

$

2,894.5

100.0

%

$

2,612.5

100.0

%

$

282.0

10.8

%

Sales by Business Day1,2

Six Months Ended March 31,

2021

2020

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

12.4

53.2

%

$

10.2

49.1

%

$

2.2

21.1

%

Non-residential roofing products

5.8

25.1

%

6.0

28.9

%

(0.2

)

(2.9

%)

Complementary building products

5.0

21.7

%

4.5

22.0

%

0.5

10.0

%

$

23.2

100.0

%

$

20.7

100.0

%

$

2.5

11.7

%

__________________________________________________

Sales by Product Line

Six Months Ended March 31,

2021 2020 Change

Net Sales Mix % Net Sales Mix % $ %

Residential roofing $ 1,539.9 53.2 % $ 1,282.3 49.1 % $ 257.6 20.1 %products

Non-residential 727.9 25.1 % 755.7 28.9 % (27.8 ) (3.7 %)roofing products

Complementary 626.7 21.7 % 574.5 22.0 % 52.2 9.1 %building products

$ 2,894.5 100.0 % $ 2,612.5 100.0 % $ 282.0 10.8 %



Sales by Business Day^1,2

Six Months Ended March 31,

2021 2020 Change

Net Sales Mix % Net Sales Mix % $ %

Residential roofing $ 12.4 53.2 % $ 10.2 49.1 % $ 2.2 21.1 %products

Non-residential 5.8 25.1 % 6.0 28.9 % (0.2 ) (2.9 %)roofing products

Complementary 5.0 21.7 % 4.5 22.0 % 0.5 10.0 %building products

$ 23.2 100.0 % $ 20.7 100.0 % $ 2.5 11.7 %

__________________________________________________

^1 Fiscal years 2021 and 2020 had 125 and 126 business days, respectively.

^2 Dollar and percentage changes may not recalculate due to rounding.

BEACON ROOFING SUPPLY, INC. Non-GAAP Financial Measures(Unaudited; in millions)

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, we prepare certain financial measures that are not calculated in accordance with GAAP, specifically:

* Adjusted Operating Expense. We define Adjusted Operating Expense as operating expense, excluding the impact of the adjusting items (as described below). * Adjusted Net Income (Loss). We define Adjusted Net Income (Loss) as net income (loss) from continuing operations, excluding the impact of the adjusting items (as described below). * Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) from continuing operations, excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, and the adjusting items (as described below).

We use these supplemental non-GAAP measures 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 our non-GAAP financial measures consistently using the same methods each period.

We believe these non-GAAP measures are useful measures because they permit 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 that these non-GAAP measures are useful to investors when evaluating our business, they are not prepared and presented in accordance with GAAP, and therefore should be considered supplemental in nature. These non-GAAP measures should not be considered in isolation or as a substitute for other financial performance measures presented in accordance with GAAP. These non-GAAP financial measures 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, these non-GAAP financial measures may differ from similarly titled measures presented by other companies.

BEACON ROOFING SUPPLY, INC. Non-GAAP Financial Measures (continued)(Unaudited; in millions)

Adjusting Items to Non-GAAP Financial Measures

The impact of the following expense (income) items is excluded from each of our non-GAAP measures (the "adjusting items"):

* Acquisition costs. Represent certain costs related to historical acquisitions, including: amortization of intangible assets; professional fees, branch integration expenses, travel expenses, employee severance and retention costs, and other personnel expenses classified as selling, general and administrative; and amortization of debt issuance costs. * Restructuring costs. Represent costs stemming from headcount rationalization efforts and certain rebranding costs; impact of the Interior Products divestiture; accrued estimated costs related to employee benefit plan withdrawals; and amortization of debt issuance costs and loss on debt extinguishment. * COVID-19 impacts. Represent costs directly related to the COVID-19 pandemic; and income tax provision (benefit) stemming from the revaluation of deferred tax assets and liabilities made in conjunction with our application of the CARES Act.

The following table presents the impact and respective location of the adjusting items on our consolidated statements of operations for each of the periods indicated:

Operating Expense Non-Operating Expense

Interest Other Income SG&A^1 Amortization Expense (Income) Taxes^2 Total Expense

Three MonthsEnded March 31, 2021

Acquisition $ 0.7 $ 25.3 $ 1.8 $ - $ - $ 27.8 costs

Restructuring 3.0 2.3 0.8 9.5 - 15.6 costs^3

COVID-19 0.5 - - - - 0.5 impacts

Totaladjusting $ 4.2 $ 27.6 $ 2.6 $ 9.5 $ - $ 43.9 items



Three MonthsEnded March 31, 2020

Acquisition $ 2.4 $ 26.1 $ 2.0 $ (5.3 ) $ - $ 25.2 costs^4

Restructuring 0.9 142.6 0.9 0.1 - 144.5 costs^5

COVID-19 - - - - (33.3 ) (33.3 )impacts^6

Totaladjusting $ 3.3 $ 168.7 $ 2.9 $ (5.2 ) $ (33.3 ) $ 136.4 items





Six MonthsEnded March 31, 2021

Acquisition $ 1.7 $ 50.8 $ 3.9 $ - $ - $ 56.4 costs

Restructuring 4.9 2.3 1.7 9.5 - 18.4 costs^3

COVID-19 0.8 - - - - 0.8 impacts

Totaladjusting $ 7.4 $ 53.1 $ 5.6 $ 9.5 $ - $ 75.6 items



Six MonthsEnded March 31, 2020

Acquisition $ 6.3 $ 58.1 $ 4.0 $ (5.3 ) $ - $ 63.1 costs^4

Restructuring 0.9 142.6 1.7 19.8 - 165.0 costs^5

COVID-19 - - - - (33.3 ) (33.3 )impacts^6

Totaladjusting $ 7.2 $ 200.7 $ 5.7 $ 14.5 $ (33.3 ) $ 194.8 items

______________________________

^ Selling, general and administrative expense ("SG&A").1^ For tax impact of adjusting items, see Adjusted Net Income (Loss) table2 below.

Other (income) expense for the three and six months ended March 31, 2021^ consists of a loss on debt extinguishment of $9.5 million in connection with3 the write-off of debt issuance costs stemming from the additional $423.9 million principal payment on the 2025 Term Loan.

Other (income) expense for the three and six months ended March 31, 2020 includes a net $5.3 million refund received as the final true-up of the^ $164.0 million payment resulting from the 338(h)(10) election made in4 connection with the acquisition of Allied Building Products Corp. on January 2, 2018.

Amortization for the three and six months ended March 31, 2020 includes the impact of non-cash accelerated intangible asset amortization of $142.6^ million related to the write-off of certain trade names in connection with5 the Company's rebranding. Other (income) expense for the six months ended March 31, 2020 includes a loss on debt extinguishment of $14.7 million in connection with the October 2019 debt refinancing.

Income taxes for the three and six months ended March 31, 2020 includes a^ $33.3 million income tax benefit resulting from our application of the CARES6 Act (which was substantially reversed in the third quarter of fiscal 2020).

BEACON ROOFING SUPPLY, INC. Non-GAAP Financial Measures (continued)(Unaudited; in millions)

Adjusted Operating Expense

The following table presents a reconciliation of operating expense, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Operating Expense for each of the periods indicated:

Three Months Ended Six Months Ended March 31, March 31,

2021 2020 2021 2020

Operating expense $ 310.0 $ 446.0 $ 614.6 $ 767.1

Acquisition costs (26.0 ) (28.5 ) (52.5 ) (64.4 )

Restructuring costs (5.3 ) (143.5 ) (7.2 ) (143.5 )

COVID-19 impacts (0.5 ) - (0.8 ) -

Adjusted Operating Expense $ 278.2 $ 274.0 $ 554.1 $ 559.2



Net sales $ 1,318.0 $ 1,197.1 $ 2,894.5 $ 2,612.5

Operating expense as % of 23.5 % 37.3 % 21.2 % 29.4 %sales

Adjusted Operating Expense as 21.1 % 22.9 % 19.1 % 21.4 %% of sales

Adjusted Net Income (Loss)

The following table presents a reconciliation of net income (loss) from continuing operations, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Net Income (Loss) for each of the periods indicated:

Three Months Ended Six Months Ended March 31, March 31,

2021 2020 2021 2020

Net income (loss) from $ (10.5 ) $ (121.3 ) $ 36.9 $ (145.3 )continuing operations

Adjusting items:

Acquisition costs 27.8 25.2 56.4 63.1

Restructuring costs 15.6 144.5 18.4 165.0

COVID-19 impacts 0.5 (33.3 ) 0.8 (33.3 )

Total adjusting items 43.9 136.4 75.6 194.8

Less: tax impact of (11.3 ) (37.5 ) (19.4 ) (53.7 )adjusting items^1

Total adjustments, net 32.6 98.9 56.2 141.1 of tax

Adjusted Net Income $ 22.1 $ (22.4 ) $ 93.1 $ (4.2 )(Loss)



Net sales $ 1,318.0 $ 1,197.1 $ 2,894.5 $ 2,612.5

Net income (loss) as % (0.8 %) (10.1 %) 1.3 % (5.6 %)of sales

Adjusted Net Income 1.7 % (1.9 %) 3.2 % (0.2 %)(Loss) as % of sales

______________________________

Amounts represent tax impact on adjusting items that are not included in our income tax provision (benefit) for the periods presented. The effective tax rate applied to these adjusting items is calculated by using forecasted adjusted pre-tax income while factoring in estimated discrete tax^ adjustments for the fiscal year. The tax impact of adjusting items for the1 three months ended March 31, 2021 and 2020 were calculated using a blended effective tax rate of 25.7% and 27.5%, respectively. The tax impact of adjusting items for the six months ended March 31, 2021 and 2020 were calculated using an effective tax rate of 25.7% and 27.6%, respectively.

BEACON ROOFING SUPPLY, INC. Non-GAAP Financial Measures (continued)(Unaudited; in millions)

Adjusted EBITDA

The following table presents a reconciliation of net income (loss) from continuing operations, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated:

Three Months Ended March Six Months Ended March 31, 31,

2021 2020 2021 2020

Net income (loss) from $ (10.5 ) $ (121.3 ) $ 36.9 $ (145.3 )continuing operations

Interest expense, net 29.6 35.6 60.9 70.3

Income taxes (4.8 ) (77.9 ) 12.9 (88.0 )

Depreciation and 42.2 183.3 81.6 231.1 amortization

Stock-based 4.2 4.3 8.0 9.1 compensation

Acquisition costs^1 0.7 (2.9 ) 1.7 1.0

Restructuring costs^1 12.5 1.0 14.4 20.7

COVID-19 impacts^1 0.5 - 0.8 -

Adjusted EBITDA $ 74.4 $ 22.1 $ 217.2 $ 98.9



Net sales $ 1,318.0 $ 1,197.1 $ 2,894.5 $ 2,612.5

Net income (loss) as % (0.8 %) (10.1 %) 1.3 % (5.6 %)of sales

Adjusted EBITDA as % 5.6 % 1.8 % 7.5 % 3.8 %of sales

______________________________

Amounts represent adjusting items included in SG&A and other income^ (expense); remaining adjusting item balances are embedded within the other1 line item balances reported in the table.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210506006177/en/

CONTACT: INVESTOR CONTACT Binit Sanghvi Head of Investor Relations Binit.Sanghvi@becn.com 972-369-8005

CONTACT: MEDIA CONTACT Jennifer Lewis VP, Communications and Corporate Social Responsibility Jennifer.Lewis@becn.com 571-752-1048