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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _________ to __________
Commission File Number 000-50924
BEACON ROOFING SUPPLY, INC.
(Exact name of registrant as specified in its charter)
BECN Logo JPG.jpg
Delaware36-4173371
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
505 Huntmar Park Drive, Suite 300, Herndon, VA 20170
(Address of principal executive offices) (Zip code)
(571) 323-3939
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par valueBECNNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filerEmerging growth company
Non-accelerated filerSmaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 24, 2024, 61,887,984 shares of common stock, par value $0.01 per share, of the registrant were outstanding.



BEACON ROOFING SUPPLY, INC.
FORM 10-Q
For the Quarter Ended September 30, 2024
TABLE OF CONTENTS
2


PART I. FINANCIAL INFORMATION (UNAUDITED)
Item 1. Condensed Consolidated Financial Statements
BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Balance Sheets
(Unaudited; in millions, except per share amounts)
September 30,December 31,September 30,
202420232023
Assets
Current assets:
Cash and cash equivalents$68.0 $84.0 $69.7 
Accounts receivable, less allowance of $18.5, $15.0, and $16.7 as of September 30, 2024, December 31, 2023, and September 30, 2023, respectively
1,596.7 1,140.2 1,415.7 
Inventories, net1,494.2 1,227.9 1,307.9 
Prepaid expenses and other current assets541.4 444.6 518.9 
Total current assets3,700.3 2,896.7 3,312.2 
Property and equipment, net497.3 436.4 396.3 
Goodwill2,087.9 1,952.6 1,933.6 
Intangibles, net504.3 403.5 410.5 
Operating lease right-of-use assets, net610.7 503.6 483.0 
Deferred income taxes, net
2.1 2.1 4.9 
Other assets, net16.9 12.8 12.5 
Total assets$7,419.5 $6,207.7 $6,553.0 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$1,202.7 $942.8 $1,179.9 
Accrued expenses588.3 498.6 601.3 
Current portion of operating lease liabilities98.4 89.7 99.2 
Current portion of finance lease liabilities33.3 26.2 21.9 
Current portion of long-term debt12.8 10.0 10.0 
Total current liabilities1,935.5 1,567.3 1,912.3 
Borrowings under revolving lines of credit, net437.9 80.0 218.3 
Long-term debt, net2,483.3 2,192.3 2,193.9 
Deferred income taxes, net
22.3 20.1 0.3 
Other long-term liabilities1.8 0.5 0.3 
Operating lease liabilities527.8 423.7 395.9 
Finance lease liabilities113.3 100.3 82.3 
Total liabilities5,521.9 4,384.2 4,803.3 
Commitments and contingencies (Note 13)
Convertible Preferred Stock (voting); $0.01 par value; aggregate liquidation preference $400.0; 0.0, 0.0 and 0.0 shares authorized, issued and outstanding as of September 30, 2024, December 31, 2023, and September 30, 2023, respectively (Note 5)
   
Stockholders' equity:
Common stock (voting); $0.01 par value; 100.0 shares authorized; 61.9, 63.3, and 63.2 shares issued and outstanding as of September 30, 2024, December 31, 2023, and September 30, 2023, respectively
0.6 0.6 0.6 
Undesignated preferred stock; 5.0 shares authorized, none issued or outstanding
   
Additional paid-in capital1,204.5 1,218.4 1,220.3 
Retained earnings715.9 618.8 534.7 
Accumulated other comprehensive income (loss)(23.4)(14.3)(5.9)
Total stockholders' equity1,897.6 1,823.5 1,749.7 
Total liabilities and stockholders' equity$7,419.5 $6,207.7 $6,553.0 
See accompanying Notes to Condensed Consolidated Financial Statements
3


BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Statements of Operations
(Unaudited; in millions, except per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net sales$2,772.6 $2,584.3 $7,359.6 $6,820.3 
Cost of products sold2,042.2 1,911.7 5,472.3 5,069.6 
Gross profit730.4 672.6 1,887.3 1,750.7 
Operating expense:
Selling, general and administrative430.2 374.3 1,230.2 1,071.3 
Depreciation28.8 23.1 80.8 65.6 
Amortization24.7 21.4 68.7 65.1 
Total operating expense483.7 418.8 1,379.7 1,202.0 
Income (loss) from operations246.7 253.8 507.6 548.7 
Interest expense, financing costs and other, net48.7 35.2 132.7 89.0 
Loss on debt extinguishment  2.4  
Income (loss) before provision for income taxes198.0 218.6 372.5 459.7 
Provision for (benefit from) income taxes52.7 57.3 94.4 119.8 
Net income (loss)$145.3 $161.3 $278.1 $339.9 
Reconciliation of net income (loss) to net income (loss) attributable to common stockholders:
Net income (loss)$145.3 $161.3 $278.1 $339.9 
Dividends on Preferred Stock (1.9) (13.9)
Undistributed income allocated to participating securities (7.6) (34.3)
Repurchase Premium (414.6) (414.6)
Net income (loss) attributable to common stockholders$145.3 $(262.8)$278.1 $(122.9)
Weighted-average common shares outstanding:
Basic62.0 63.2 62.8 63.7 
Diluted63.1 63.2 63.9 63.7 
Net income (loss) per common share:
Basic$2.34 $(4.16)$4.43 $(1.93)
Diluted$2.30 $(4.16)$4.35 $(1.93)



See accompanying Notes to Condensed Consolidated Financial Statements
4


BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited; in millions)
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Net income (loss)$145.3 $161.3 $278.1 $339.9 
Other comprehensive income (loss):
Foreign currency translation adjustment1.8 (2.5)(2.5)(0.2)
Unrealized gain (loss) due to change in fair value of derivative financial instruments, net of tax(9.8)3.5 (4.6)8.6 
Derivative financial instruments reclassified to earnings, net of tax(0.3)(0.8)(2.0)(1.8)
Total other comprehensive income (loss)(8.3)0.2 (9.1)6.6 
Comprehensive income (loss)$137.0 $161.5 $269.0 $346.5 
See accompanying Notes to Condensed Consolidated Financial Statements
5


BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Statements of Stockholders Equity
(Unaudited; in millions)
Common StockRetained
SharesAmount
APIC1
Earnings
AOCI2
Total
Three Months Ended September 30, 2024
Balance as of June 30, 202461.9 $0.6 $1,196.6 $571.5 $(15.1)$1,753.6 
Repurchase and retirement of common stock, net3
— — — (0.9)— (0.9)
Issuance of common stock, net of shares withheld for taxes0.0 0.0 0.3— — 0.3
Stock-based compensation— — 7.6— — 7.6
Other comprehensive income (loss)— — — — (8.3)(8.3)
Net income (loss)— — — 145.3— 145.3
Balance as of September 30, 202461.9$0.6 $1,204.5 $715.9 $(23.4)$1,897.6 
Three Months Ended September 30, 2023
Balance as of June 30, 202363.4 $0.6 $1,208.1 $820.1 $(6.1)$2,022.7 
Repurchase and retirement of common stock, net3
(0.4)(0.0)— (25.2)— (25.2)
Repurchase of Preferred Stock, net— — — (414.6)— (414.6)
Issuance of common stock, net of shares withheld for taxes0.2 0.0 0.0 — — 0.0 
Stock-based compensation— — 7.9 — — 7.9 
Other comprehensive income (loss)— — — — 0.2 0.2 
Proceeds from disgorgement of short-swing profits, net of tax— — 4.3 — — 4.3 
Net income (loss)— — — 161.3 — 161.3 
Dividends on Preferred Stock— — — (6.9)— (6.9)
Balance as of September 30, 202363.2$0.6 $1,220.3 $534.7 $(5.9)$1,749.7 
Nine Months Ended September 30, 2024
Balance as of December 31, 202363.3 $0.6 $1,218.4 $618.8 $(14.3)$1,823.5 
Repurchase and retirement of common stock, net3
(1.9)(0.0)— (181.0)— (181.0)
Equity forward contract3
— — (45.0)— — (45.0)
Issuance of common stock, net of shares withheld for taxes0.5 0.0 7.8 — — 7.8 
Stock-based compensation— — 23.3 — — 23.3 
Other comprehensive income (loss)— — — — (9.1)(9.1)
Net income (loss)— — — 278.1 — 278.1 
Balance as of September 30, 202461.9$0.6 $1,204.5 $715.9 $(23.4)$1,897.6 
Nine Months Ended September 30, 2023
Balance as of December 31, 202264.2 $0.6 $1,187.2 $728.8 $(12.5)$1,904.1 
Repurchase and retirement of common stock, net3
(1.5)(0.0)— (100.5)— (100.5)
Repurchase of Preferred Stock, net— — — (414.6)— (414.6)
Issuance of common stock, net of shares withheld for taxes0.5 0.0 6.6 — — 6.6 
Stock-based compensation— — 22.2 — — 22.2 
Other comprehensive income (loss)— — — — 6.6 6.6 
Proceeds from disgorgement of short-swing profits, net of tax— — 4.3 — — 4.3 
Net income (loss)— — — 339.9 — 339.9 
Dividends on Preferred Stock— — — (18.9)— (18.9)
Balance as of September 30, 202363.2$0.6 $1,220.3 $534.7 $(5.9)$1,749.7 
1.Additional Paid-in Capital (“APIC”).
2.Accumulated Other Comprehensive Income (Loss) (“AOCI”).
3.See Note 7 for additional information.
See accompanying Notes to Condensed Consolidated Financial Statements
6


BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited; in millions)
 Nine Months Ended September 30,
 20242023
Operating Activities
Net income (loss)$278.1 $339.9 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization149.5 130.7 
Stock-based compensation23.3 22.2 
Certain interest expense and other financing costs1.8 1.7 
Loss on debt extinguishment2.4  
Gain on sale of fixed assets and other(5.2)(13.7)
Deferred income taxes4.5 1.6 
Changes in operating assets and liabilities:
Accounts receivable(384.3)(394.4)
Inventories(200.1)37.7 
Prepaid expenses and other current assets(101.9)(89.4)
Accounts payable and accrued expenses288.3 491.2 
Other assets and liabilities3.2 (1.8)
Net cash provided by (used in) operating activities59.6 525.7 
Investing Activities
Capital expenditures(87.6)(85.5)
Acquisition of business, net(399.1)(73.7)
Proceeds from sale of assets5.6 15.3 
Purchases of investments(1.1)(1.0)
Net cash provided by (used in) investing activities(482.2)(144.9)
Financing Activities
Borrowings under revolving lines of credit2,330.8 1,720.0 
Payments under revolving lines of credit(1,974.3)(1,757.9)
Borrowings under term loan300.0  
Payments under term loan(9.6)(7.5)
Borrowings under senior notes 600.0 
Payment of debt issuance costs(0.2)(6.6)
Payments under equipment financing facilities and finance leases(21.7)(14.3)
Repurchase of convertible Preferred Stock (805.6)
Payment of fees for the repurchase of convertible Preferred Stock(0.1) 
Repurchase and retirement of common stock, net(180.0)(100.5)
Advance payment for equity forward contract(45.0) 
Proceeds from employee stock purchase plan8.3  
Payment of dividends on Preferred Stock (18.9)
Proceeds from disgorgement of short-swing profits1
 5.9 
Proceeds from issuance of common stock related to equity awards6.6 9.7 
Payment of taxes related to net share settlement of equity awards(7.1)(3.1)
Net cash provided by (used in) financing activities407.7 (378.8)
Effect of exchange rate changes on cash and cash equivalents(1.1) 
Net increase (decrease) in cash and cash equivalents(16.0)2.0 
Cash and cash equivalents, beginning of period84.0 67.7 
Cash and cash equivalents, end of period$68.0 $69.7 
Supplemental Cash Flow Information
Cash paid during the period for:
Interest$133.1 $73.1 
Income taxes, net of refunds
$62.5 $76.2 
1.During the nine months ended September 30, 2023, the Company received payments of $5.9 million from a shareholder related to short-swing trading profits disgorged pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The payments were recorded to additional paid-in capital on the condensed consolidated balance sheets.

See accompanying Notes to Condensed Consolidated Financial Statements
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BEACON ROOFING SUPPLY, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited; in millions, except per share amounts or otherwise indicated)
1. Company Overview
Beacon Roofing Supply, Inc. (“Beacon” or the “Company”) was incorporated in the state of Delaware on July 16, 1997 and is the largest publicly traded distributor of roofing materials and complementary building products, such as siding and waterproofing, in North America.
The Company operates its business primarily under the trade name “Beacon Building Products” and services customers in all 50 states throughout the U.S. and seven provinces in Canada. The Company’s material subsidiaries are Beacon Sales Acquisition, Inc. and Beacon Roofing Supply Canada Company.
2. Summary of Significant Accounting Policies
Basis of Presentation
The Company prepared the condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the requirements of the Securities and Exchange Commission (“SEC”). As permitted under those rules, certain footnotes or other financial information have been condensed or omitted. Certain prior period amounts have been reclassified to conform to current period presentation.
The balance sheet as of September 30, 2023 has been presented for a better understanding of the impact of seasonal fluctuations on the Company’s financial condition. The three-month periods ended September 30, 2024 and 2023 had 64 and 63 business days, respectively. The nine-month periods ended September 30, 2024 and 2023 had 192 and 191 business days, respectively.
In management’s opinion, the unaudited condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the twelve months ending December 31, 2024.
These unaudited condensed consolidated financial statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Recent Accounting Pronouncements — Not Yet Adopted
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This standard affects a wide variety of Topics in the Codification. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements and related disclosures.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting - Improving Reportable Segment Disclosures (Topic 280).” The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The standard requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The standard also requires all annual disclosures currently required by ASC Topic 280 to be included in interim periods. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a registrant's effective tax rate reconciliation as well as information on income taxes paid. This standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted and should be applied prospectively. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
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3. Acquisitions
The following table presents the Company’s acquisitions between January 1, 2023 and September 30, 2024. The Company acquired 100% of the equity or substantially all of the net assets in each case. The Company has not provided pro forma results of operations for any of the transactions below, as the transactions individually and in the aggregate for the respective year are not material to the Company. The results of operations for these transactions are included in the Company’s condensed consolidated statements of operations from the date of the acquisition (dollars in millions):
Date AcquiredCompany NameRegionBranches
Goodwill Recognized1
Intangible Assets Acquired1
September 10, 2024Chicago Metal Supply & Fabrication, Inc.Illinois1$5.0 $5.8 
August 1, 2024Passaic Metal and Building Supplies Co. and affiliatesNew Jersey and New York9$44.2 $44.0 
August 1, 2024SSR Roof Supply Ltd.Canada2$3.1 $11.3 
July 10, 2024Roofers Mart of Southern California, Inc.California1$0.6 $1.1 
July 1, 2024Integrity Metals, LLCFlorida2$5.5 $6.0 
July 1, 2024Extreme Metal Fabricators, LLCFlorida2$9.6 $15.2 
May 1, 2024Smalley & CompanyColorado, Arizona, California, Nevada, New Mexico, and Utah11$4.0 $25.8 
April 15, 2024General Roofing & Siding Supply Co. Nebraska, Iowa, and North Dakota5$3.6 $8.8 
February 12, 2024Metro Sealant & Waterproofing Supply, Inc.Virginia and Maryland4$22.4 $25.2 
February 1, 2024Roofers Supply of GreenvilleSouth Carolina and North Carolina3$35.1 $26.6 
November 1, 2023H&H Roofing Supply, LLCCalifornia1$1.1 $1.0 
October 2, 2023Garvin Construction ProductsMaryland, New York, Connecticut, New Jersey, and Massachusetts5$17.1 $10.1 
September 5, 2023S&H Building Material CorporationNew York1$5.3 $4.1 
August 1, 2023All American Vinyl Siding Supply, LLCMississippi1$0.7 $0.8 
July 11, 2023Crossroads Roofing Supply, Inc.Oklahoma5$5.8 $11.1 
June 12, 2023Silver State Building Materials, Inc.Nevada1$0.6 $0.9 
March 31, 2023Al's Roofing Supply, Inc.California4$3.7 $7.1 
March 31, 2023Prince Building Systems, LLCWisconsin1$0.3 $2.0 
January 4, 2023First Coastal Exteriors, LLCAlabama and Mississippi2$0.8 $1.9 
1.For Chicago Metal Supply & Fabrication, Inc., Passaic Metal and Building Supplies Co. and affiliates, SSR Roof Supply Ltd., Roofers Mart of Southern California, Inc., Integrity Metals, LLC, Extreme Metal Fabricators, LLC, Smalley & Company, General Roofing & Siding Supply Co., Metro Sealant & Waterproofing Supply, Inc., Roofers Supply of Greenville, H&H Roofing Supply, LLC, and Garvin Construction Products, the measurement period is still open and amounts are based on provisional estimates of the fair value of assets acquired and liabilities assumed as of September 30, 2024.
In each company’s respective twelve months prior to being acquired by Beacon, the companies listed above produced aggregate annual sales of approximately $736.9 million. The total transaction costs incurred by the Company for these acquisitions for the three and nine months ended September 30, 2024 were $3.9 million and $8.5 million, respectively. Of the $168.5 million of goodwill recognized for these acquisitions, $126.7 million is deductible for tax purposes.
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4. Net Sales
The following table presents the Company’s net sales by line of business and geography (in millions):
U.S.CanadaTotal
Three Months Ended September 30, 2024
Residential roofing products$1,378.2 $26.7 $1,404.9 
Non-residential roofing products681.8 57.2 739.0 
Complementary building products619.8 8.9 628.7 
Total net sales$2,679.8 $92.8 $2,772.6 
Three Months Ended September 30, 2023
Residential roofing products$1,350.1 $22.7 $1,372.8 
Non-residential roofing products610.6 64.6 675.2 
Complementary building products533.5 2.8 536.3 
Total net sales$2,494.2 $90.1 $2,584.3 
Nine Months Ended September 30, 2024
Residential roofing products$3,605.3 $55.9 $3,661.2 
Non-residential roofing products1,860.8 151.9 2,012.7 
Complementary building products1,670.0 15.7 1,685.7 
Total net sales$7,136.1 $223.5 $7,359.6 
Nine Months Ended September 30, 2023
Residential roofing products$3,470.8 $50.7 $3,521.5 
Non-residential roofing products1,652.7 143.5 1,796.2 
Complementary building products1,495.1 7.5 1,502.6 
Total net sales$6,618.6 $201.7 $6,820.3 
5. Net Income (Loss) Per Common Share
Basic net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock (as defined below) when outstanding during the period. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit (“RSU”) awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the fully diluted weighted-average number of common shares outstanding during the period.
In connection with the acquisition of Allied Building Products Corp. on January 2, 2018, the Company completed the sale of 400,000 shares of Series A Cumulative Convertible Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), with an aggregate liquidation preference of $400.0 million, at a purchase price of $1,000 per share, to CD&R Boulder Holdings, L.P. (“CD&R Holdings”).
On July 31, 2023 (the “Repurchase Date”), the Company repurchased (the “Repurchase”) all 400,000 issued and outstanding shares of the Preferred Stock held by CD&R Holdings (the shares of Preferred Stock held by CD&R Holdings, the “Shares”) pursuant to a letter agreement dated July 6, 2023 in cash for $805.4 million, including $0.9 million of accrued but unpaid dividends as of such date (the “Repurchase Price”). In connection with the Repurchase, CD&R Holdings agreed that for as long as Philip Knisely or Nathan Sleeper remained a member of the Company’s Board and for a period of six months thereafter, the customary voting, standstill, and transfer restrictions set forth in the original Investment Agreement with respect to the Preferred Stock will continue to apply to CD&R Holdings and its related fund in accordance with their terms. Following the closing of the Repurchase, Mr. Sleeper resigned from the Company’s Board and Mr. Knisely remained a member of the Company’s Board until his resignation on January 23, 2024.
The aggregate Repurchase Price and related transaction fees and expenses were financed by a combination of proceeds from the 2030 Senior Notes, which are further described in Note 11, as well as the 2026 ABL (as defined in Note 11), and cash on hand.
On and after the Repurchase Date, all dividends and distributions ceased to accrue on the Shares, the repurchased Shares are no longer deemed outstanding, and all rights of CD&R Holdings with respect to the repurchased Shares terminated.
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During the three and nine months ended September 30, 2023, the Company incurred costs directly attributable to the Repurchase of $9.3 million.
Before the Repurchase occurred, the Preferred Stock was convertible perpetual participating preferred stock of the Company, and conversion of the Preferred Stock into $0.01 par value shares of the Company’s common stock would have been at a conversion price of $41.26 per share (or 9,694,619 shares of common stock). The Preferred Stock accumulated dividends at a rate of 6.0% per annum (payable quarterly in cash or in-kind, subject to certain conditions). The Preferred Stock was not mandatorily redeemable; therefore, it was classified as mezzanine equity in the Company’s condensed consolidated balance sheets. Holders of Preferred Stock would have participated in dividends on an as-converted basis if declared on common shares. As a result, Preferred Stock was classified as a participating security and thereby required the allocation of income that would have otherwise been available to common stockholders when calculating net income (loss) per common share.
Prior to the Repurchase, CD&R Holdings typically reinvested cash proceeds received from the quarterly Preferred Stock dividend payments to purchase shares of the Company’s common stock on the open market, the most recent of which occurred in April 2023. In connection with the Repurchase, CD&R Holdings triggered the short-swing profit rule pursuant to Section 16(b) of the Exchange Act and disgorged $4.7 million in short-swing trading profits to the Company immediately following the Repurchase. Subsequent to the Repurchase, CD&R Holdings disgorged an additional $1.2 million of short-swing trading profits triggered by CD&R Holdings’ public offering to sell 5.0 million shares of the Company’s common stock. The $5.9 million of short-swing trading profits disgorged by CD&R pursuant to Section 16(b) of the Exchange Act during the three and nine months ended September 30, 2023 were recorded to additional paid-in capital on the condensed consolidated balance sheets.
The difference between the total consideration paid for the Repurchase, inclusive of direct costs, and the carrying value of the Preferred Stock, resulted in a $414.6 million Repurchase premium (the “Repurchase Premium”) which was recorded as a reduction to retained earnings within the condensed consolidated statement of stockholders’ equity. In calculating basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2023, the Repurchase Premium is included as a component of net income (loss) attributable to common stockholders.
For periods in which Preferred Stock is outstanding, diluted net income (loss) per common share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.
The following table presents the components and calculations of basic and diluted net income (loss) per common share (in millions, except per share amounts; certain amounts may not recalculate due to rounding):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Numerator:
Net income (loss)$145.3 $161.3 $278.1 $339.9 
Dividends on Preferred Stock (1.9) (13.9)
Undistributed income allocated to participating securities (7.6) (34.3)
Repurchase Premium (414.6) (414.6)
Net income (loss) attributable to common stockholders – Basic and Diluted$145.3 $(262.8)$278.1 $(122.9)
Denominator:
Weighted-average common shares outstanding – Basic62.0 63.2 62.8 63.7 
Effect of common share equivalents1.1  1.1  
Weighted-average common shares outstanding – Diluted63.1 63.2 63.9 63.7 
Net income (loss) per common share:
Basic$2.34 $(4.16)$4.43 $(1.93)
Diluted$2.30 $(4.16)$4.35 $(1.93)
The following table includes the number of shares that may be dilutive common shares in the future (except for the Preferred Stock, which was redeemed in July 2023 and therefore has no dilutive impact in the future as of September 30, 2023). These shares were not
11


included in the computation of diluted net income (loss) per common share because the effect was either anti-dilutive or the requisite performance conditions were not met (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Stock options0.1 0.7 0.1 0.3 
Restricted stock units0.0 1.1 0.0 0.4 
Preferred Stock 3.2  7.5 
Equity forward contract0.6  0.5  
Employee Stock Purchase Plan0.0  0.0  
6. Stock-based Compensation
On April 1, 2024, the Board of Directors of the Company (the “Board”) approved the Beacon Roofing Supply, Inc., 2024 Stock Plan (the “2024 Plan”), subject to stockholder approval, which was subsequently obtained on May 15, 2024 in conjunction with the 2024 Annual Meeting of Stockholders. Upon approval, the 2024 Stock Plan succeeded the Beacon Roofing Supply, Inc. Second Amended and Restated 2014 Stock Plan (the “Prior Plan”) and is the only plan of the Company pursuant to which stock-based awards are currently granted. The 2024 Plan provides for discretionary grants of stock options, stock awards, stock unit awards, and stock appreciation rights (“SARs”) for up to 6,200,000 shares of common stock to key employees and non-employee directors. Stock options and SARs granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by one share for every share subject to the stock option or SAR, and stock awards and stock unit awards granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by 2.25 shares for every one share delivered. If (i) there is a lapse, forfeiture, expiration, termination or cancellation of any award for any reason under the 2024 Plan, or under the Prior Plan after March 6, 2024, or (ii) shares subject to a stock award or a stock unit award under the 2024 Plan, or under the Prior Plan after March 6, 2024, are delivered or withheld as payment of any withholding taxes, then in each case such shares will again be available for issuance under the 2024 Plan, to be added back in the same multiple as described in the preceding sentence. Any shares delivered or withheld as payment for the exercise price of a stock option or of any withholding taxes with respect to such stock options or SARs will not be available for issuance pursuant to subsequent awards. As of September 30, 2024, there were 6,309,540 shares of common stock available for issuance pursuant to the 2024 Plan.
All unvested employee equity awards contain a “double trigger” change in control mechanism to the extent such employee equity award is continued or assumed after a change in control. If an award is not continued or assumed by a public company in an equitable manner, such award shall become vested immediately prior to a change in control (in the case of a restricted stock unit award with performance conditions at the then-calculable payout percentage for any completed annual performance periods and at 100% for any annual performance periods not yet calculable, and in the case of a restricted stock unit award with market conditions at 100% of the award then earned but not then vested). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award, unless there is a qualifying termination (without cause or for good reason) within one-year following the change in control, in which event the award shall immediately become vested (in the case of a restricted stock unit award with performance conditions at the then-calculable payout percentage for any completed annual performance periods and at 100% for any annual performance periods not yet calculable, and in the case of a restricted stock unit award with market conditions at 100% of the award then earned but not then vested).
Stock Options
Non-qualified stock options generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in three annual installments over the three-year period following the grant date.
The fair values of the options granted for the periods presented were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:
Nine Months Ended September 30,
20242023
Risk-free interest rate4.13 %4.26 %
Expected volatility48.05 %49.92 %
Expected life (in years)5.085.12
Dividend yield
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The following table summarizes all stock option activity for the nine months ended September 30, 2024 (in millions, except per share amounts and time periods):
Options OutstandingWeighted-Average Exercise PriceWeighted-Average Remaining Contractual Term (Years)
Aggregate Intrinsic Value1
Balance as of December 31, 2023
1.1$41.38 5.8$51.3 
Granted0.185.18 
Exercised(0.2)34.46 
Canceled/Forfeited(0.0)61.58 
Balance as of September 30, 2024
1.0$46.92 5.6$40.3 
Vested and expected to vest after September 30, 2024
1.0$46.54 5.6$40.2 
Exercisable as of September 30, 2024
0.8$39.30 4.8$37.1 
1.Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.
During the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to stock options of $0.9 million and $1.1 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to stock options of $2.9 million and $3.1 million, respectively. During the three months ended September 30, 2024 and 2023, the Company recognized a tax benefit related to stock-based compensation expense related to stock options of $0.2 million and $0.3 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company recognized a tax benefit related to stock-based compensation expense related to stock options of $2.1 million and $1.0 million, respectively.
As of September 30, 2024, there was $5.0 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.7 years. The following table summarizes additional information on stock options (in millions, except per share amounts):
Nine Months Ended September 30,
20242023
Weighted-average fair value per share of stock options granted
$40.34 $31.86 
Total grant date fair value of stock options vested$2.7 $1.9 
Total intrinsic value of stock options exercised$10.7 $7.6 
Restricted Stock Units
Time-based RSU awards granted to employees are subject to continued employment and generally vest on the third anniversary of the grant date. The Company also grants certain RSU awards to management that additionally may contain market or performance conditions. Market conditions are incorporated into the grant date fair value of the management awards with market conditions using a Monte Carlo valuation model. Compensation expense for management awards with market conditions is recognized over the service period and is not reversed if the market condition is not met. For awards with performance conditions, the actual number of awards that will vest can range from 0% to 200% of the original grant amount, depending upon actual Company performance below or above the established performance metric targets. At each reporting date, the Company estimates performance in relation to the defined targets when determining the projected number of management awards with performance conditions that are expected to vest and calculating the related stock-based compensation expense. Management awards with performance conditions are amortized over the service period if, and to the extent that, it is determined that achievement of the performance condition is probable. If awards with market, performance and/or service conditions are forfeited due to failure to achieve performance conditions or failure to satisfy service conditions, any previously recognized expense for such awards is reversed.
RSUs granted to non-employee directors are subject to continued service and vest on the first anniversary of the grant date (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the non-employee director’s service on the Board has terminated, and for non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director’s termination of service on the Board. Any non-employee directors who have Beacon equity holdings (defined as common stock and outstanding vested equity awards) with a total fair value that is greater than or equal to five times the annual Board cash retainer may elect to have any future RSU grants settle simultaneously with vesting.
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The following table summarizes all RSU activity for the nine months ended September 30, 2024 (in millions, except grant date fair value amounts):
RSUs OutstandingWeighted-Average Grant Date Fair Value
Balance as of December 31, 2023
1.2$53.14 
Granted0.4$85.71 
Released(0.3)$52.01 
Canceled/Forfeited(0.1)$60.28 
Balance as of September 30, 2024
1.2$62.70 
Vested and expected to vest after September 30, 2024
1.2$62.31 
During the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to RSUs of $6.0 million and $6.2 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to RSUs of $18.6 million and $18.5 million, respectively. During the three months ended September 30, 2024 the Company recognized a de minimis tax benefit related to stock-based compensation expense related to RSUs. During the three months ended September 30, 2023, the Company recognized a tax benefit related to stock-based compensation expense related to RSUs of $0.8 million. During the nine months ended September 30, 2024 and 2023, the Company recognized a tax benefit related to stock-based compensation expense related to RSUs of $2.7 million and $1.1 million, respectively.
As of September 30, 2024, there was $35.7 million of unrecognized compensation expense related to unvested RSUs (including unrecognized expense for RSUs with performance conditions at their estimated value as of September 30, 2024), which is expected to be recognized over a weighted-average period of 1.9 years.
The following table summarizes additional information regarding RSUs (in millions, except per share amounts):
Nine Months Ended September 30,
20242023
Weighted-average fair value per share of RSUs granted$85.71 $63.06 
Total grant date fair value of RSUs vested$13.6 $7.1 
Total intrinsic value of RSUs released$25.2 $11.8 
Employee Stock Purchase Plan
On March 20, 2023, the Board adopted the Company’s 2023 Employee Stock Purchase Plan (the “ESPP”), subject to stockholder approval, which was subsequently obtained on May 17, 2023 in conjunction with the 2023 Annual Meeting of Stockholders. The ESPP allows eligible employees to acquire shares of the Company’s common stock through payroll deductions over six-month offering periods. The purchase price per share is equal to 85% of the lesser of (1) the fair market value of a share of the Company’s common stock on the offering date, defined as the first trading day of the offering period, or (2) the fair market value of a share of the Company’s common stock on the purchase date, defined as the last trading day of the offering period; provided that the purchase price is not less than the $0.01 par value per share of the common stock. Participant purchases are limited to a maximum of $12,500 worth of stock per offering period (or $25,000 per calendar year). The Company is authorized to grant up to 1,000,000 shares of its common stock under the ESPP.
During the nine months ended September 30, 2024, employees purchased 115,281 shares at a weighted average per share price of $72.18. As of September 30, 2024, there were 884,719 shares of common stock available for issuance pursuant to the Company’s ESPP. During the three and nine months ended September 30, 2024, the Company recorded stock-based compensation expense related to the ESPP of $0.7 million and $1.8 million, respectively. During the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expense related to the ESPP of $0.6 million.
7. Share Repurchase Program
On February 24, 2022, the Company announced a new share repurchase program (the “Repurchase Program”), pursuant to which the Company may purchase up to $500.0 million of its common stock. On February 23, 2023, the Company announced that its Board authorized and approved an increase of the Repurchase Program by approximately $387.9 million, permitting future share repurchases of $500.0 million after considering actual share repurchases as of such re-authorization date.
Share repurchases under the Repurchase Program may be made from time to time through various means, including open market purchases (including block trades), privately negotiated transactions, accelerated share repurchase transactions (“ASR”) or through a
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series of forward purchase agreements, option contracts or similar agreements and contracts (including Rule 10b5-1 plans) adopted by the Company, in each case in accordance with the rules and regulations of the SEC, including, if applicable, Rule 10b-18 of the Exchange Act. The timing, volume, and nature of share repurchases pursuant to the Repurchase Program are at the discretion of management and may be suspended or discontinued at any time. Shares repurchased under the Repurchase Program are retired immediately and are included in the category of authorized but unissued shares. Direct and incremental costs associated with the Repurchase Program are deferred and included as a component of the purchase price. The excess of the purchase price over the par value of the common shares is reflected in retained earnings.
On May 9, 2024, the Company entered into a Supplemental Confirmation (together with the Company’s March 22, 2022 Variable Tenor ASR Master Agreement, the “May 2024 ASR Agreement”) with Citibank, N.A. (“Citi”) to repurchase $225.0 million (the “ASR Repurchase Price”) of its common stock. Under the terms of the May 2024 ASR Agreement, the Company paid the ASR Repurchase Price to Citi and received an initial share delivery of 1,927,608 shares of its common stock from Citi, representing 80% of the total expected share repurchases under the May 2024 ASR Agreement, based on the closing price of the Company’s common stock of $93.38 on May 9, 2024. The final number of shares to be repurchased pursuant to the May 2024 ASR Agreement will be determined upon settlement based on the daily volume-weighted average price of the Company’s common stock during the term of the May 2024 ASR Agreement, less a discount and subject to adjustments pursuant to the terms of the May 2024 ASR Agreement. At settlement, Citi will deliver additional shares of the Company’s common stock to the Company, or, under certain circumstances, the Company will deliver cash or shares of the Company’s common stock to Citi, with the method of settlement at the Company’s election. As of September 30, 2024, the remaining $45.0 million of the ASR Repurchase Price was evaluated as an unsettled equity forward contract indexed to the Company’s common stock and classified within stockholders’ equity as a reduction to additional paid in capital until the equity forward contract settles. The final settlement of the May 2024 ASR Agreement is expected to be completed in the fourth quarter of 2024.
The following table sets forth the Company’s share repurchases (in millions, except per share data):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Total number of shares repurchased
 0.3 1.9 1.5 
Amount repurchased1
$ $25.1 $180.0 $99.9 
Average price per share$ $83.89 $93.38 $67.90 
1.Amount repurchased for the nine months ended September 30, 2024 excludes the $45.0 million equity forward contract.
The Company did not make any share repurchases during the three months ended September 30, 2024. Share repurchases for the nine months ended September 30, 2024 were made pursuant to the May 2024 ASR Agreement. During the three and nine months ended September 30, 2024, the Company incurred costs directly attributable to the Repurchase Program of approximately $0.9 million and $1.0 million, respectively.
Share repurchases for the three and nine months ended September 30, 2023 were made on the open market through a Rule 10b5-1 repurchase plan. During the three and nine months ended September 30, 2023, the Company incurred costs directly attributable to the Repurchase Program of approximately $0.2 million and $0.8 million, respectively.
As of September 30, 2024, the Company had approximately $164.1 million available for repurchases remaining under the Repurchase Program.
8. Prepaid Expenses and Other Current Assets
The following table summarizes the significant components of prepaid expenses and other current assets (in millions):
September 30,December 31,September 30,
202420232023
Vendor rebates$441.3 $371.8 $407.2 
Other100.1 72.8 111.7 
Total prepaid expenses and other current assets$541.4 $444.6 $518.9 
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9. Goodwill and Intangible Assets
Goodwill
The following table sets forth the change in the carrying amount of goodwill during the nine months ended September 30, 2024 (in millions):
Balance as of December 31, 2023
$1,952.6 
Acquisitions135.9 
Translation and other adjustments(0.6)
Balance as of September 30, 2024
$2,087.9 
The changes in the carrying amount of goodwill for the nine months ended September 30, 2024 were driven primarily by the Company’s recent acquisitions. See Note 3 for additional information.
Intangible Assets
The amortizable intangible asset lives generally range from 1 to 20 years. The following table summarizes intangible assets by category (in millions, except time periods):
September 30,December 31,September 30,Weighted-Average Remaining
202420232023
Life1 (Years)
Amortizable intangible assets:
Customer relationships and other
$1,402.9 $1,238.9 $1,226.0 16.3
Trademarks4.5 5.6 4.5 0.1
Total amortizable intangible assets1,407.4 1,244.5 1,230.5 16.3
Accumulated amortization(918.4)(850.8)(829.8)
Total amortizable intangible assets, net489.0 393.7 400.7 
Indefinite-lived trademarks15.3 9.8 9.8 
Total intangibles, net$504.3 $403.5 $410.5 
1.As of September 30, 2024.
Amortization expense relating to the above-listed intangible assets for the three months ended September 30, 2024 and 2023 was $24.7 million and $21.4 million, respectively. Amortization expense relating to the above-listed intangible assets for the nine months ended September 30, 2024 and 2023 was $68.7 million and $65.1 million, respectively.
The following table summarizes the estimated future amortization expense for intangible assets (in millions):
Year Ending December 31,
 
2024 (October - December)$22.9 
202582.3 
202671.2 
202760.3 
202849.5 
Thereafter202.8 
Total future amortization expense$489.0 
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10. Accrued Expenses
The following table summarizes the significant components of accrued expenses (in millions):
September 30,December 31,September 30,
202420232023
Inventory$173.8 $140.5 $215.3 
Customer rebates112.3 124.9 98.2 
Payroll and employee benefit costs102.9 101.4 91.4 
Selling, general and administrative124.6 108.5 120.7 
Income taxes43.9 0.1 55.4 
Interest and other30.8 23.2 20.3 
Total accrued expenses$588.3 $498.6 $601.3 
11. Financing Arrangements
The following table summarizes all outstanding debt (presented net of unamortized debt issuance costs) and other financing arrangements (in millions):
September 30,December 31,September 30,
202420232023
Revolving Lines of Credit
2026 ABL:
2026 U.S. Revolver1
$426.8 $80.0 $218.3 
2026 Canada Revolver2
11.1   
Borrowings under revolving lines of credit, net$437.9 $80.0 $218.3 
Long-term Debt, net
Term Loan:
2028 Term Loan3
$1,256.7 $964.5 $966.4 
Current portion(12.8)(10.0)(10.0)
Long-term borrowings under term loan1,243.9 954.5 956.4 
Senior Notes:
2026 Senior Notes4
298.6 298.1 297.9 
2029 Senior Notes5
347.7 347.4 347.2 
2030 Senior Notes6
593.1 592.3 592.4 
Long-term borrowings under senior notes1,239.4 1,237.8 1,237.5 
Long-term debt, net$2,483.3 $2,192.3 $2,193.9 
1.Effective rate on borrowings of 6.25%, 6.68%, and 6.37% as of September 30, 2024, December 31, 2023, and September 30, 2023, respectively.
2.Effective rate on borrowings of 5.70% as of September 30, 2024.
3.Interest rate of 6.85%, 7.97%, and 7.68% as of September 30, 2024, December 31, 2023, and September 30, 2023, respectively.
4.Interest rate of 4.50% for all periods presented.
5.Interest rate of 4.125% for all periods presented.
6.Interest rate of 6.50% for all periods presented.
Debt Refinancing
In May 2021, the Company entered into various financing arrangements to refinance certain debt instruments to take advantage of lower market interest rates for the Company’s fixed rate indebtedness and to extend maturities (the “2021 Debt Refinancing”). The transactions included a new $350.0 million issuance of senior notes (the “2029 Senior Notes”). In addition, the Company entered into a second amended and restated credit agreement for its $1.30 billion asset-based revolving line of credit (the “2026 ABL”), and an amended and restated term loan credit agreement for a term loan of $1.00 billion (subsequently increased) (the “2028 Term Loan”), which together are defined as the “Senior Secured Credit Facilities.”
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On May 19, 2021, the Company used the net proceeds from the 2029 Senior Notes offering, together with cash on hand and borrowings under the Senior Secured Credit Facilities, to redeem all $1.30 billion aggregate principal amount outstanding of the Company’s 4.875% Senior Notes due 2025 at a redemption price of 102.438%, to refinance all outstanding borrowings under the Company’s previous term loan, and to pay all related accrued interest, fees and expenses.
On March 28, 2024, the Company entered into a financing arrangement to refinance the 2028 Term Loan resulting in an increase in the outstanding principal balance from $975.0 million to $1.275 billion. Refer to the discussion below for additional information regarding the refinancing.
2029 Senior Notes
On May 10, 2021, the Company and certain subsidiaries of the Company as guarantors completed a private offering of $350.0 million aggregate principal amount of 4.125% senior unsecured notes due 2029 at an issue price equal to par. The 2029 Senior Notes mature on May 15, 2029 and bear interest at a rate of 4.125% per annum, payable on May 15 and November 15 of each year, which commenced on November 15, 2021. The 2029 Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company’s active United States subsidiaries.
The 2029 Senior Notes and related subsidiary guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside of the United States pursuant to Regulation S under the Securities Act. The 2029 Senior Notes and related subsidiary guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.
The Company capitalized debt issuance costs of $4.0 million related to the 2029 Senior Notes, which are being amortized over the term of the financing arrangements.
As of September 30, 2024, the outstanding balance on the 2029 Senior Notes, net of $2.3 million of unamortized debt issuance costs, was $347.7 million.
2026 ABL
On May 19, 2021, the Company entered into a $1.30 billion senior secured asset-based revolving credit facility with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2026 ABL provides for revolving loan commitments in both the United States in an amount up to $1.25 billion (“2026 U.S. Revolver”) and Canada in an amount up to $50.0 million (“2026 Canada Revolver”) (as such amounts may be reallocated pursuant to the terms of the 2026 ABL). The 2026 ABL has a maturity date of May 19, 2026. The unused commitment fees on the 2026 ABL are 0.20% per annum.
The 2026 U.S. Revolver has various borrowing tranches with an interest rate based, at the Company’s option, on a base rate, plus an applicable margin, or a Term SOFR rate, plus an applicable margin. The applicable margin for borrowings under the 2026 U.S. Revolver is based on the Company’s quarterly average excess availability as determined by reference to a borrowing base and ranges from 0.25% to 0.75% per annum in the case of base rate borrowings and 1.25% to 1.75% per annum in the case of Term SOFR borrowings.
The 2026 Canada Revolver has various borrowing tranches with an interest rate based, at the Company’s option, on a base rate, plus an applicable margin, or an adjusted CORRA rate, plus an applicable margin. The applicable margin for borrowings under the 2026 Canada Revolver is based on the Company’s quarterly average excess availability as determined by reference to a borrowing base and ranges from 0.25% to 0.75% per annum in the case of base rate borrowings and 1.25% to 1.75% per annum in the case of CORRA borrowings.
The 2026 ABL contains a springing financial covenant that requires a minimum 1.00:1.00 Fixed Charge Coverage Ratio (consolidated EBITDA less capital expenditures to fixed charges, each as defined in the 2026 ABL credit agreement) as of the end of each fiscal quarter (in each case, calculated on a trailing four fiscal quarter basis). The covenant would become operative if the Company failed to maintain a specified minimum amount of availability to borrow under the 2026 ABL, which was not applicable to the Company as of September 30, 2024.
In addition, the Senior Secured Credit Facilities and the 2029 Senior Notes (as well as the 2030 Senior Notes and the 2026 Senior Notes, each as defined below) are subject to negative covenants that, among other things and subject to certain exceptions, limit the Company’s ability and the ability of its restricted subsidiaries to: (i) incur indebtedness (including guarantee obligations); (ii) incur liens; (iii) engage in mergers or other fundamental changes; (iv) dispose of certain property or assets; (v) make certain payments, dividends or other distributions; (vi) make certain acquisitions, investments, loans and advances; (vii) prepay certain indebtedness; (viii) change the nature of their business; (ix) engage in certain transactions with affiliates; (x) engage in sale-leaseback transactions; and (xi) enter into certain other restrictive agreements. The 2026 ABL is secured by a first priority lien over substantially all of the
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Company’s and each guarantor’s accounts and other receivables, chattel paper, deposit accounts (excluding any such account containing identifiable proceeds of Term Priority Collateral (as defined below)), inventory, and, to the extent related to the foregoing and other ABL Priority Collateral, general intangibles (excluding equity interests in any subsidiary of the Company and all intellectual property), instruments, investment property (but not equity interests in any subsidiary of the Company), commercial tort claims, letters of credit, supporting obligations and letter of credit rights, together with all books, records and documents related to, and all proceeds and products of, the foregoing, subject to certain customary exceptions (the “ABL Priority Collateral”), and a second priority lien over substantially all of the Company’s and each guarantor’s other assets, including all of the equity interests of any subsidiary held by the Company or any guarantor, subject to certain customary exceptions (the “Term Priority Collateral”). Beacon Sales Acquisition, Inc., a Delaware corporation and subsidiary of the Company, is a U.S. Borrower under the 2026 ABL and Beacon Roofing Supply Canada Company, an unlimited liability company organized under the laws of Nova Scotia and subsidiary of the Company, is a Canadian borrower under the 2026 ABL. The 2026 ABL is fully and unconditionally guaranteed, on a joint and several basis, by the Company’s active U.S. subsidiaries.
The Company capitalized debt issuance costs of $8.3 million related to the 2026 ABL, which are being amortized over the term of the financing arrangements.
As of September 30, 2024, the outstanding balance on the 2026 ABL, net of $2.7 million of unamortized debt issuance costs, was $437.9 million. The Company also had outstanding standby letters of credit related to the 2026 U.S. Revolver in the amount of $17.8 million as of September 30, 2024.
2028 Term Loan
On May 19, 2021, the Company entered into a $1.00 billion senior secured term loan B facility with Citi and a syndicate of other lenders. The 2028 Term Loan, prior to the most recent amendment, required quarterly principal payments in the amount of $2.5 million, with the remaining outstanding principal to be paid on its May 19, 2028 maturity date. The interest rate was based, at the Company’s option, on a base rate, plus an applicable margin, or a Term SOFR rate, plus an applicable margin. The applicable margin for the 2028 Term Loan ranged, depending on the Company’s consolidated total leverage ratio (consolidated total indebtedness to consolidated EBITDA, each as defined in the 2028 Term Loan credit agreement), from 1.25% to 1.50% per annum in the case of base rate borrowings and 2.25% to 2.50% per annum in the case of Term SOFR borrowings.
On March 28, 2024, the Company entered into Amendment No. 3 to the 2028 Term Loan (the “2028 Term Loan Amendment No. 3”) with Citi, as administrative agent and collateral agent, and the lenders party thereto. The 2028 Term Loan Amendment No. 3, among other things, (i) increases the aggregate outstanding amount of outstanding term loans to $1.275 billion, (ii) reduces the interest rate for base rate borrowings to a rate per annum equal to a base rate plus a margin equal to 2.00% (iii) reduces the interest rate to a rate per annum equal to Term SOFR with a 0.00% floor, plus a margin equal to 2.00%, and (iv) increases the required quarterly principal payments from $2.5 million to $3.2 million starting March 31, 2024 (the “2028 Term Loan Refinancing”). Except as amended by the 2028 Term Loan Amendment No. 3, the remaining terms of the 2028 Term Loan remain in full force and effect.
The Company evaluated the 2028 Term Loan Refinancing on a lender-by-lender basis to determine whether the transaction should be accounted for as either a debt extinguishment or debt modification. As a result, the Company recognized a loss on debt extinguishment of $2.4 million during the nine months ended September 30, 2024. In addition, unamortized historical debt issuance costs of $9.7 million and new debt issuance costs of $0.1 million related to the 2028 Term Loan continue to be amortized over the term of the financing arrangement.
The 2028 Term Loan is secured by a shared first-priority lien on the Term Priority Collateral and a shared second-priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The 2028 Term Loan is fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company’s active U.S. subsidiaries.
On March 16, 2023, the Company novated and amended its interest rate swap agreement related to the 2028 Term Loan. For additional information, see Note 17.
As of September 30, 2024, the outstanding balance on the 2028 Term Loan, net of $8.7 million of unamortized debt issuance costs, was $1.26 billion.
2030 Senior Notes
On July 31, 2023, the Company, and certain subsidiaries of the Company as guarantors, completed a private offering of $600.0 million aggregate principal amount of 6.50% Senior Secured Notes due 2030 (the “2030 Senior Notes”) at an issue price equal to par. The 2030 Senior Notes mature on August 1, 2030 and bear interest at a rate of 6.50% per annum, payable on February 1 and August 1 of each year, commencing on February 1, 2024. The 2030 Senior Notes and related subsidiary guarantees are secured by a shared first-priority lien on the Term Priority Collateral and a shared second-priority lien on the ABL Priority Collateral. Certain excluded assets
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will not be included in the Term Priority Collateral and the ABL Priority Collateral. The 2030 Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company’s active U.S. subsidiaries.
The 2030 Senior Notes and related subsidiary guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act, to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside of the United States pursuant to Regulation S under the Securities Act. The 2030 Senior Notes and related subsidiary guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.
On July 31, 2023 the Company used net proceeds from the offering, together with cash on hand and available borrowings under the 2026 ABL to complete the Repurchase of the Preferred Stock.
The Company capitalized debt issuance costs of $8.1 million related to the 2030 Senior Notes, which are being amortized over the term of the financing arrangement.
As of September 30, 2024, the outstanding balance on the 2030 Senior Notes, net of $6.9 million of unamortized debt issuance costs, was $593.1 million.
2026 Senior Notes
On October 9, 2019, the Company, and certain subsidiaries of the Company as guarantors, completed a private offering of $300.0 million aggregate principal amount of 4.50% Senior Secured Notes due 2026 (the “2026 Senior Notes”) at an issue price equal to par. The 2026 Senior Notes mature on November 15, 2026 and bear interest at a rate of 4.50% per annum, payable on May 15 and November 15 of each year, commencing on May 15, 2020. The 2026 Senior Notes and related subsidiary guarantees are secured by a shared first-priority lien on the Term Priority Collateral and a shared second-priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The 2026 Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company’s active U.S. subsidiaries.
The 2026 Senior Notes and related subsidiary guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act, to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside of the United States pursuant to Regulation S under the Securities Act. The 2026 Senior Notes and related subsidiary guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.
On October 28, 2019, the Company used the net proceeds from the offering, together with cash on hand and available borrowings under the Company’s previous asset-based revolving credit facility, to redeem all $300.0 million aggregate principal amount outstanding of the Company’s 6.375% Senior Notes due 2023.
The Company capitalized debt issuance costs of $4.7 million related to the 2026 Senior Notes, which are being amortized over the term of the financing arrangements.
As of September 30, 2024, the outstanding balance on the 2026 Senior Notes, net of $1.4 million of unamortized debt issuance costs, was $298.6 million.
12. Leases
The following table summarizes components of lease costs recognized in the condensed consolidated statements of operations (in millions):
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Operating lease costs$38.0 $31.1 $107.7 $91.7 
Finance lease costs:
Amortization of right-of-use assets8.6 5.6 24.3 15.4 
Interest on lease obligations2.2 1.4 6.3 3.8 
Variable lease costs4.0 3.2 11.3 9.1 
Total lease costs$52.8 $41.3 $149.6