Beacon Roofing Supply(BECN) - 2024 Q2 - Quarterly Results

Financial Performance - Record quarterly net sales reached $2.67 billion, a 6.8% increase compared to the prior year, driven by price execution and contributions from acquired and newly opened branches[5] - Net income for the second quarter was $127.2 million, down from $153.8 million in the prior year, with diluted EPS at $1.99 compared to $1.97[5] - Adjusted EBITDA for the second quarter was $279.4 million, compared to $290.3 million in the prior year, reflecting a decrease in margin[5] - Year-to-date net sales increased to $4.59 billion, an 8.3% growth compared to the prior year, marking a record for the first half of the year[6] - Net income for the six months ended June 30, 2024, was $132.8 million, a decrease of 25.7% from $178.6 million in the same period of 2023[19] - Total net sales for the six months ended June 30, 2024, reached $4,587.0 million, reflecting an increase of 8.3% compared to $4,236.0 million in the prior year[23] Gross Margin and Operating Expenses - Gross margin improved to 25.6%, up from 25.4% in the prior year, as higher average selling prices offset increased product costs[5] - Operating expenses increased to $467.9 million, representing 17.5% of net sales, up from 16.1% in the prior year[5] - Operating expenses increased to $467.9 million, representing 17.5% of net sales, up from 16.1% in Q2 2023[15] - Adjusted Operating Expense for the three months ended June 30, 2024, was $440.9 million, up from $377.6 million in the same period of 2023, representing a 16.7% increase[33] - Adjusted Operating Expense as a percentage of net sales for the six months ended June 30, 2024, was 18.4%, compared to 17.3% in the same period of 2023[33] Sales Performance - Residential roofing product sales increased by 5.0%, while non-residential roofing product sales rose by 13.6% compared to the prior year[6] - Net sales for Q2 2024 reached $2,674.6 million, a 10.4% increase from $2,426.0 million in Q2 2023[15] - Gross profit margin improved to 25.6% in Q2 2024 compared to 25.4% in Q2 2023, with gross profit of $683.7 million[15] - Residential roofing products accounted for 49.2% of total net sales in the six months ended June 30, 2024, generating $2,256.3 million, up 5.0% from $2,148.1 million in 2023[23] - Non-residential roofing products saw a significant increase of 13.6%, with sales of $1,273.7 million compared to $1,120.8 million in the previous year[23] Assets and Liabilities - Total assets as of June 30, 2024, were $7,336.9 million, an increase from $6,500.3 million as of June 30, 2023[17] - Accounts receivable increased to $1,570.8 million from $1,361.7 million year-over-year[17] - Long-term debt rose to $2,485.4 million, up from $1,603.2 million in the previous year[17] - Total liabilities increased to $5,583.3 million compared to $4,078.4 million a year ago[17] Cash Flow and Capital Expenditures - Cash provided by operating activities was negative at $(189.2) million for the six months ended June 30, 2024, compared to $358.7 million in the same period of 2023[19] - The company reported capital expenditures of $(61.5) million for the six months ended June 30, 2024, slightly higher than $(60.3) million in the prior year[19] - Borrowings under revolving lines of credit increased significantly to $1,715.2 million in the six months ended June 30, 2024, compared to $840.7 million in the same period of 2023[19] - The company’s cash and cash equivalents at the end of the period were $76.6 million, up from $65.8 million at the end of June 30, 2023[19] Acquisitions and Strategic Plans - The company acquired Smalley & Co., a leading waterproofing distributor, expanding its footprint in key markets[1] - The company plans to adjust inventory and resources proactively in response to local market conditions while maintaining high customer service standards[3] - The company plans to continue using non-GAAP measures to provide investors with a clearer view of its financial performance and operational goals[27] Adjusted Financial Metrics - Adjusted Net Income for the three months ended June 30, 2024, was $148.4 million, compared to $172.9 million in the same period of 2023, indicating a decrease of 14.2%[34] - Adjusted EBITDA is defined as net income (loss) excluding interest expense, income taxes, depreciation and amortization, stock-based compensation, and other adjusting items[26] - For the three months ended June 30, 2024, total adjusting items amounted to $28.5 million, compared to $25.6 million for the same period in 2023, reflecting an increase of 11.3%[31] - Adjusted EBITDA for the three months ended June 30, 2024, was $279.4 million, down from $290.3 million in the same period of 2023, a decline of 3.1%[36]