Acquisition and Growth - QXO completed the acquisition of Beacon Roofing Supply, valuing the transaction at $10.6 billion, with a purchase price of $124.35 per share[151]. - Net sales for the three months ended June 30, 2025, reached $1.91 billion, a significant increase from $14.5 million in the same period of 2024, primarily driven by the Beacon Acquisition[155]. - Cost of products sold for the three months ended June 30, 2025, increased to $1.50 billion, up from $8.7 million in the prior year, reflecting higher sales due to the acquisition[157]. - SG&A expenses for the three months ended June 30, 2025, rose to $456.8 million, compared to $9.8 million in the same period of 2024, driven by acquisition-related costs[159]. - QXO aims to achieve $50 billion in annual revenues within the next decade through a combination of acquisitions and organic growth in the building products distribution industry[152]. Financial Performance - The net loss for the three months ended June 30, 2025, was $58.5 million, compared to a loss of $0.6 million in the same period of 2024[154]. - Adjusted Gross Profit for the three months ended June 30, 2025, was $482.0 million, with an Adjusted Gross Margin of 25.3%[175]. - Adjusted Net Income attributable to common stockholders for the six months ended June 30, 2025, was $96.3 million, with an Adjusted Diluted EPS of $0.17[176]. - Adjusted EBITDA for the three months ended June 30, 2025, was $204.6 million, resulting in an Adjusted EBITDA Margin of 10.7%[177]. Tax and Expenses - The effective tax rate for the three months ended June 30, 2025, was 72.7%, significantly higher than 28.9% in the same period of 2024, due to lower pre-tax income and non-deductible transaction costs[168]. - Amortization expense for the three months ended June 30, 2025, was $79.8 million, compared to $0.2 million in the same period of 2024, primarily due to new intangible assets from the acquisition[163]. - Interest expense for the three months ended June 30, 2025, was $(30.2) million, compared to $3.5 million in the same period of 2024, largely due to additional debt from the acquisition[165]. - Loss on debt extinguishment was $45.7 million for the three and six months ended June 30, 2025, related to the prepayment of $1.40 billion under the Term Loan Facility[167]. Cash Flow and Financing - The Company had a cash balance of $2.28 billion as of June 30, 2025, primarily from cash deposits and money market investments[179]. - During the three months ended June 30, 2025, the Company paid $22.5 million in dividends to holders of Convertible Preferred Stock[181]. - The Company raised $823.8 million in net proceeds from a private placement of common stock to partially fund the Beacon Acquisition[184]. - The company raised $487.9 million in net proceeds from the sale of 37.7 million shares of common stock at $13.25 per share in April 2025[193]. - In May 2025, the company raised $892.5 million in net proceeds from the sale of 48.5 million shares of common stock at $16.50 per share[194]. - The company raised $1.96 billion in net proceeds from the sale of 89.9 million shares of common stock at $22.25 per share in June 2025[195]. - The company issued $2.25 billion in aggregate principal amount of 6.75% Senior Secured Notes due 2032, with interest paid semi-annually starting October 30, 2025[196]. - The company entered into a Term Loan Facility of $2.25 billion, maturing on April 30, 2032, to partially fund the Beacon Acquisition[200]. - As of June 30, 2025, the outstanding balance on the Term Loan Facility was $823.2 million, net of unamortized costs[206]. - The ABL Facility provides for an aggregate borrowing availability of $2.0 billion, with a borrowing capacity of $1.78 billion as of June 30, 2025[207]. - The company made a voluntary principal prepayment of $1.40 billion under the Term Loan Facility, resulting in a loss on debt extinguishment of $45.7 million[205]. - The company capitalized debt issuance costs of $22.2 million related to the Senior Secured Notes, amortized over the term of the financing arrangement[199]. - The ABL Credit Agreement requires maintaining a minimum fixed charge coverage ratio of 1.0 to 1.0 when availability is less than $120 million[211]. - As of June 30, 2025, the outstanding balance on the ABL Facility was $199.9 million, with standby letters of credit amounting to $17.5 million[213]. - Net cash used in operating activities increased to $137.7 million for the six months ended June 30, 2025, compared to $0.7 million for the same period in 2024[214]. - Net cash used in investing activities surged to $10.58 billion for the six months ended June 30, 2025, primarily due to the Beacon Acquisition and increased capital expenditures[215]. - Net cash provided by financing activities rose to $7.92 billion for the six months ended June 30, 2025, compared to $965.9 million for the same period in 2024[216]. - As of June 30, 2025, the company had outstanding borrowings of $199.9 million under the ABL Facility and $2.23 billion under its Notes[218]. - The weighted-average effective interest rate on debt instruments with variable rates was 6.94% as of June 30, 2025[218]. - The company capitalized debt issuance costs of $18.8 million related to the ABL Facility, with $18.2 million unamortized as of June 30, 2025[212]. - Cash used in operations increased by $137.0 million during the six months ended June 30, 2025, primarily due to seasonal timing of net working capital requirements[214]. - The effect of exchange rate changes on cash, cash equivalents, and restricted cash was a decrease of $0.3 million for the six months ended June 30, 2025[213]. - A 10% increase or decrease in interest rates would not have a material effect on the company's interest income or expense[218]. Market Outlook - The demand for exterior building materials is expected to peak in the quarters ending June 30, September 30, and December 31, correlating with construction cycles[178]. - The effective tax rate for calculating Adjusted Net Income for the three and six months ended June 30, 2025, was 25.84%[176]. - The Company expects inventory fair value adjustments to be fully recognized during the year ended December 31, 2025[175].
SilverSun Technologies(SSNT) - 2025 Q2 - Quarterly Report