Beacon Roofing Supply(US:BECN)2024-10-31 20:04Financial Performance - Net sales for the three months ended September 30, 2024, were $2,772.6 million, an increase from $2,584.3 million in the same period of 2023, representing a growth of 7.3%[82]. - Gross profit for the three months ended September 30, 2024, was $730.4 million, compared to $672.6 million in 2023, reflecting a gross margin increase from 26.0% to 26.3%[82][83]. - Net income for the three months ended September 30, 2024, was $145.3 million, down from $161.3 million in the same period of 2023, resulting in a net income margin decrease from 6.3% to 5.2%[82][83]. - Total net sales for the nine months ended September 30, 2024, were $7.36 billion, up from $6.82 billion in 2023[97]. - Net income attributable to common stockholders was $278.1 million in 2024, compared to a net loss of $122.9 million in 2023, resulting in a basic net income per share of $4.43[111]. - Net income margin decreased to 3.8% in 2024 from 4.9% in 2023, reflecting changes in operating expenses and income[98]. Operating Expenses - Operating expenses increased to $483.7 million in Q3 2024 from $418.8 million in Q3 2023, with selling, general, and administrative expenses rising to 15.5% of net sales from 14.5%[82][83]. - SG&A expenses increased by 14.9% to $430.2 million in 2024, up from $374.3 million in 2023, primarily due to higher payroll and operating costs[88]. - SG&A expenses rose by 14.8% to $1.23 billion, with total SG&A as a percentage of net sales increasing to 16.7% from 15.7%[103]. Cash Flow and Financing Activities - Net cash provided by operating activities decreased to $59.6 million in 2024 from $525.7 million in 2023, a decline of $466.1 million primarily due to unfavorable changes in working capital[129]. - Net cash used in investing activities increased to $482.2 million in 2024 from $144.9 million in 2023, an increase of $337.3 million primarily due to increased acquisitions[130]. - Net cash provided by financing activities was $407.7 million in 2024, a significant increase of $786.5 million compared to net cash used of $378.8 million in 2023[131]. Share Repurchase and Stock Information - The company repurchased all 400,000 shares of Preferred Stock for $805.4 million, resulting in a repurchase premium of $414.6 million recorded as a reduction to retained earnings[78]. - The company announced a share repurchase program allowing for the purchase of up to $500.0 million of common stock, with an increase of approximately $387.9 million authorized in February 2023[134]. - Under the May 2024 ASR Agreement, the company repurchased $225.0 million of common stock, receiving an initial delivery of 1,927,608 shares[134]. - The average price per share repurchased in 2024 was $93.38, compared to $83.89 in 2023[135]. - As of September 30, 2024, approximately $164.1 million remained available for repurchases under the share repurchase program[136]. Growth and Expansion - The company opened 17 greenfield locations and acquired 40 branches during the nine months ended September 30, 2024, contributing $412.7 million and $594.9 million to net sales, respectively[77]. - Digital sales increased by 25.5% compared to the previous year, indicating strong growth in the company's digital commerce platform[77]. - The company’s Ambition 2025 framework aims to drive growth and improve operational performance, with a focus on enhancing customer service and expanding market presence[77]. - Organic net sales totaled $2.63 billion, reflecting a 1.7% increase year-over-year, driven by a 1-2% increase in weighted-average selling price[85]. - Organic net sales rose by 3.5% to $7.06 billion, driven by a 2-3% increase in estimated organic volume and a 1-2% increase in weighted-average selling price[100]. Tax and Interest Expenses - The effective tax rate for 2024 was 26.6%, slightly down from 27.0% in 2023, with an expected range of 26.0% to 27.0% for the year[94]. - Interest expense rose to $48.7 million in 2024, up from $35.2 million in 2023, attributed to higher average debt balances[93]. - Interest expense increased to $132.7 million in 2024, compared to $89.0 million in 2023, primarily due to higher average debt balances[107]. Adjusted Financial Metrics - Adjusted EBITDA for the three months ended September 30, 2024, was $325.2 million, compared to $309.6 million for the same period in 2023, indicating a growth of 5.3%[120]. - Adjusted Net Income for the three months ended September 30, 2024, was $176.9 million, slightly down from $180.0 million in the same period of 2023, representing a decrease of 0.6%[118]. - For the three months ended September 30, 2024, total adjusting items amounted to $42.3 million, compared to $25.1 million for the same period in 2023, reflecting a year-over-year increase of 68.5%[114]. - The company’s total adjusting items for the nine months ended September 30, 2024, were $99.3 million, compared to $76.4 million for the same period in 2023, reflecting a year-over-year increase of 30.0%[114]. Market and Seasonal Trends - The company noted that demand for exterior building materials is closely correlated to seasonal changes, with higher sales typically in the quarters ending June 30, September 30, and December 31[121].