Beacon Roofing Supply(BECN)2025-02-27 21:05Financial Performance - Net sales for 2024 reached $9,763.2 million, an increase of 7.1% from $9,119.8 million in 2023[157] - Gross profit for 2024 was $2,504.8 million, compared to $2,342.7 million in 2023, reflecting a gross profit margin of 25.7% for both years[157] - Net income for 2024 was $361.7 million, down from $435.0 million in 2023, resulting in a net income margin of 3.7%[157] - Net sales increased by 7.1% to $9.76 billion in 2024, up from $9.12 billion in 2023[158] - Organic net sales rose by 2.5% to $9.35 billion, driven by a 1-2% increase in weighted-average selling price and estimated organic volume[158] - Total gross profit increased by 6.9% to $2.50 billion in 2024, compared to $2.34 billion in 2023[160] - Adjusted Net Income for 2024 was $456.1 million, down from $507.9 million in 2023, indicating a decrease of 10.2%[180] - Adjusted EBITDA for 2024 was $930.2 million, slightly up from $929.6 million in 2023, showing a marginal increase of 0.1%[181] Operating Expenses - Operating expenses increased to $1,839.4 million in 2024 from $1,630.5 million in 2023, with selling, general and administrative expenses rising to 16.8% of net sales[157] - SG&A expenses rose by 12.6% to $1.64 billion in 2024, primarily due to acquisitions and increased one-time costs[164] - Adjusted Operating Expense for 2024 was $1,720.9 million, up from $1,538.1 million in 2023, representing an increase of 11.8%[179] Share Repurchase and Capital Management - The company repurchased all 400,000 shares of preferred stock for $805.4 million, including accrued dividends, on July 31, 2023[145] - The share repurchase program was increased by approximately $387.9 million, allowing for future repurchases of up to $500.0 million[200] - The company repurchased a total of 2.4 million shares in 2024, compared to 1.6 million shares in 2023[203] - The total amount repurchased in 2024 was $225.0 million, significantly higher than the $110.9 million in 2023[203] - The average price per share for repurchases in 2024 was $92.77, up from $68.82 in 2023[203] - As of December 31, 2024, the company had approximately $164.1 million remaining for repurchases under the Repurchase Program[204] - The company incurred costs of $1.8 million directly attributable to the Repurchase Program in 2024, compared to approximately $0.6 million in 2023[204] Debt and Interest Expenses - Interest expense increased to $177.3 million in 2024 from $126.1 million in 2023, impacting overall profitability[157] - Interest expense rose to $177.3 million in 2024, up from $126.1 million in 2023, due to higher average debt balances[168] - The company had outstanding borrowings of $1.25 billion under its term loan and $1.24 billion under senior notes as of December 31, 2024[212] - The weighted-average effective interest rate on variable-rate debt instruments was 6.34% as of December 31, 2024[212] Cash Flow and Investments - Net cash provided by operating activities decreased to $419.4 million in 2024 from $787.8 million in 2023, a decline of 46.2%[191] - Net cash used in investing activities increased significantly to $540.5 million in 2024, compared to $225.6 million in 2023, an increase of 139.5%[192] - As of December 31, 2024, the company had cash and cash equivalents of $74.3 million and available borrowings of approximately $1.13 billion[187] Strategic Initiatives - The Ambition 2025 Value Creation Framework aims to enhance customer service and expand market presence, with a focus on operational efficiency[140] - The company plans to explore additional acquisition opportunities as part of its Ambition 2025 initiative, indicating a focus on market expansion[189] Market Exposure and Risks - Approximately 3.0% of net sales in 2024 were derived from customers in Canada, exposing the company to foreign currency exchange rate risks[213] - The company does not currently enter into financial instruments to manage minimal foreign currency exchange risks, as a 10% fluctuation would not have a material impact[213] - The company is exposed to commodity price risks, particularly related to energy and raw materials, but had no derivative financial instruments in place as of December 31, 2024[214] Taxation - The effective tax rate was 25.5% in 2024, a slight decrease from 25.8% in 2023, primarily due to lower pre-tax income[170]