Acquisition and Financial Impact - QXO completed the acquisition of Beacon Roofing Supply, valuing the transaction at $10.6 billion, with a purchase price of $124.35 per share[153]. - Net sales for the three months ended September 30, 2025, reached $2.73 billion, a significant increase from $13.1 million in the same period of 2024, primarily due to the Beacon Acquisition[157]. - For the nine months ended September 30, 2025, net sales totaled $4.65 billion, up from $42.1 million in the prior year, driven by the inclusion of Beacon's sales[158]. - Cost of products sold for the three months ended September 30, 2025, increased to $2.09 billion from $7.6 million in 2024, reflecting higher sales and inventory fair value adjustments[159]. - SG&A expenses for the three months ended September 30, 2025, rose to $452.5 million, up from $39.0 million in 2024, largely due to costs associated with the Beacon Acquisition[161]. - The company reported a net loss of $139.4 million for the three months ended September 30, 2025, compared to a net income of $17.2 million in the same period of 2024[156]. - Interest expense for the three months ended September 30, 2025, was $(37.7) million, compared to $57.0 million in 2024, primarily due to additional debt from the Beacon Acquisition[167]. Profitability and Adjusted Metrics - Adjusted Gross Profit for Q3 2025 was $687.2 million, up from $5.5 million in Q3 2024, with an Adjusted Gross Margin of 25.2% compared to 42.0% in Q3 2024[178]. - Adjusted Net Income for the nine months ended September 30, 2025, was $310.6 million, with Adjusted Diluted EPS of $0.32, compared to a net loss of $189.2 million for the same period[179]. - Adjusted EBITDA for Q3 2025 was $301.9 million, with an Adjusted EBITDA Margin of 11.1%, while the net loss for the same quarter was $139.4 million[181]. Cash Flow and Liquidity - The company's cash balance as of September 30, 2025, was $2.31 billion, primarily consisting of cash deposits and money market fund investments[183]. - The company paid $22.5 million in dividends to holders of Convertible Preferred Stock during Q3 2025, totaling $67.5 million for the nine months ended September 30, 2025[185]. - The company continually evaluates its liquidity requirements in light of operating needs, growth initiatives, and capital resources following the Beacon Acquisition[183]. - The Company paid $6.9 million in dividends to holders of Mandatory Convertible Preferred Stock during the three and nine months ended September 30, 2025[190]. - Net cash provided by operating activities increased to $74.8 million for the nine months ended September 30, 2025, up from $30.9 million in the same period of 2024, reflecting a $43.9 million increase[218]. - Net cash used in investing activities surged to $10.6 billion for the nine months ended September 30, 2025, compared to $0.1 million in 2024, primarily due to the Beacon Acquisition and increased capital expenditures[219]. - Net cash provided by financing activities rose to $7.77 billion for the nine months ended September 30, 2025, compared to $5.0 billion in 2024, driven by the issuance of Notes and net borrowings under the Term Loan and ABL Facilities[220]. Debt and Financing Activities - The Company raised $823.8 million in net proceeds from a private placement of common stock to partially fund the Beacon Acquisition, completed on April 29, 2025[188]. - The Company raised $487.9 million in net proceeds from a public offering of 37.7 million shares at $13.25 per share in April 2025[197]. - In May 2025, the Company raised $892.5 million in net proceeds from a public offering of 48.5 million shares at $16.50 per share[198]. - The Company raised $1.96 billion in net proceeds from a public offering of 89.9 million shares at $22.25 per share in June 2025[199]. - The Company issued $2.25 billion in aggregate principal amount of 6.75% Senior Secured Notes due 2032 on April 29, 2025[200]. - The outstanding balance on the Notes as of September 30, 2025, was $2.23 billion, net of $21.1 million of unamortized debt issuance costs[203]. - The Company made a voluntary principal prepayment of $1.40 billion under the Term Loan Facility on May 29, 2025, resulting in a loss on debt extinguishment of $45.7 million[209]. - The outstanding balance on the Term Loan Facility as of September 30, 2025, was $824.0 million, net of $8.0 million of unamortized OID and $18.0 million of unamortized debt issuance costs[210]. - The ABL Facility has a borrowing capacity of $1.93 billion based on the borrowing base as of September 30, 2025[211]. - As of September 30, 2025, the outstanding balance on the ABL Facility was $43.0 million, with standby letters of credit amounting to $21.2 million[217]. - The Company capitalized debt issuance costs of $18.8 million related to the ABL Facility, with $17.2 million remaining unamortized as of September 30, 2025[216]. - The weighted-average effective interest rate on debt instruments with variable rates was 7.09% as of September 30, 2025, with a potential 10% change in interest rates having no material effect on interest income or expense[222]. - The ABL Facility requires maintaining a minimum fixed charge coverage ratio of 1.0 to 1.0 when availability is below $120 million or 10% of the borrowing base[215]. - The Company is in compliance with all covenants of the ABL Credit Agreement as of September 30, 2025[214]. - The ABL Facility is secured by a second-priority lien on equity interests and guaranteed by each subsidiary guarantor[213]. - The Company incurred a commitment fee of 0.20% per annum on unutilized commitments under the ABL Facility[216]. Future Outlook and Strategy - The company aims to achieve $50 billion in annual revenues within the next decade through organic growth and strategic acquisitions in the $800 billion building products distribution industry[154]. - The company plans to leverage technology to become a leader in the building products distribution sector following the transition from a technology solutions provider[154]. - The demand for exterior building materials is expected to peak in the quarters ending June 30, September 30, and December 31, with lower sales anticipated in the March quarter due to seasonal weather impacts[182]. - The company has a quarterly dividend policy for its Convertible Preferred Stock, which is considered in evaluating overall liquidity needs[185]. - The company expects inventory fair value adjustments to be fully recognized during the year ended December 31, 2025, impacting both gross profit and net income[178].
SilverSun Technologies(SSNT) - 2025 Q3 - Quarterly Report