Beacon Roofing Supply(BECN) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter net sales reached $2.40 billion, representing a 4.5% increase compared to the prior year, marking a company record for fourth quarter net sales [8]. - Full year net sales increased to $9.76 billion, a 7.1% growth compared to the previous year, also a company record [12]. - Adjusted EBITDA for the fourth quarter was $222.5 million, slightly up from $216.7 million in the prior year [11]. - Net income for the fourth quarter was $83.6 million, down from $95.1 million in the prior year, with diluted EPS at $1.32 compared to $1.47 [11]. - Net income for the year ended December 31, 2024, was $361.7 million, a decrease of 16.9% from $435.0 million in 2023 [30]. - Total net cash provided by operating activities decreased to $419.4 million in 2024 from $787.8 million in 2023, reflecting a decline of 46.8% [30]. - Adjusted Net Income for the year ended December 31, 2024, was $456.1 million, down from $507.9 million in 2023, indicating a decrease of 10.1% [49]. - Adjusted EBITDA for the year ended December 31, 2024, was $930.2 million, slightly up from $929.6 million in 2023, showing a marginal increase of 0.1% [51]. Sales Growth - The Ambition 2025 plan has led to year-over-year net sales growth for the last 16 quarters, demonstrating the resilience of the business model [3]. - Residential roofing product sales increased by 3.9% for the full year, while non-residential roofing product sales rose by 11.6% [13]. - Net sales for the year ended December 31, 2024, reached $9,763.2 million, an increase of 7.1% compared to $9,119.8 million in 2023 [37]. - Residential roofing products sales increased by 3.9% to $4,833.5 million in 2024 from $4,652.0 million in 2023 [37]. - Non-residential roofing products sales grew by 11.6% to $2,674.1 million in 2024, up from $2,395.7 million in 2023 [37]. - Complementary building products sales rose by 8.9% to $2,255.6 million in 2024, compared to $2,072.1 million in 2023 [37]. Capital Management - The company returned $225 million in capital to shareholders through common share repurchases during 2024 [4]. - Capital expenditures for 2024 were $126.6 million, slightly higher than $122.9 million in 2023 [30]. - The company reported a net cash used in investing activities of $540.5 million in 2024, compared to $225.6 million in 2023 [30]. - Borrowings under revolving lines of credit increased to $2,881.7 million in 2024 from $2,374.2 million in 2023 [30]. - The company’s cash and cash equivalents at the end of the period decreased to $74.3 million in 2024 from $84.0 million in 2023 [30]. Operational Metrics - The gross margin remained stable at 25.7% for both the fourth quarter and the full year, despite higher product costs [10]. - Gross profit margin remained stable at 25.7%, with gross profit of $617.5 million in Q4 2024 compared to $592.0 million in Q4 2023 [26]. - Operating expenses increased to $459.7 million in Q4 2024, up from $428.5 million in Q4 2023, with a slight increase in the operating expense ratio to 19.1% [26]. - Adjusted Operating Expense for the three months ended December 31, 2024, was $433.6 million, compared to $408.5 million in 2023, reflecting an increase of 6.1% [48]. - Operating expense as a percentage of net sales for the three months ended December 31, 2024, was 19.1%, compared to 18.6% in the same period of 2023 [48]. Strategic Initiatives - The company opened 19 greenfield locations and acquired 42 branches, enhancing customer reach and service capabilities [3]. - The company plans to provide a strategic review and financial targets at the upcoming Investor Day on March 13, 2025 [7]. - The company is focused on expanding its market presence and enhancing product offerings through strategic initiatives and potential acquisitions [24]. - The company has a proprietary digital account management suite, Beacon PRO+, enhancing customer business management capabilities [24]. - Beacon operates over 580 branches across all 50 states in the U.S. and seven provinces in Canada, serving approximately 110,000 customers [24]. Cost Management - Interest expense for the year ended December 31, 2024, was $182.7 million, compared to $131.9 million in 2023, indicating an increase of 38.4% [51]. - Acquisition costs for the year ended December 31, 2024, totaled $107.8 million, an increase from $96.0 million in 2023, reflecting an increase of 12.5% [49]. - Restructuring costs for the year ended December 31, 2024, were $19.2 million, significantly higher than $2.0 million in 2023, representing a substantial increase of 860% [49]. - Total adjusting items for the year ended December 31, 2024, amounted to $127.0 million, compared to $98.0 million in 2023, representing a significant increase of 29.6% [49].