UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period Ended
OR
For the Transition Period from _________ to __________
Commission File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
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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.
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).
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:
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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 April 30, 2022,
1
BEACON ROOFING SUPPLY, INC.
FORM 10-Q
For the Quarter Ended March 31, 2022
TABLE OF CONTENTS
PART I. |
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Financial Information (unaudited) |
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Item 1. |
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Condensed Consolidated Financial Statements |
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3 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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32 |
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Item 4. |
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32 |
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PART II. |
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Other Information |
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Item 1. |
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33 |
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Item 2. |
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33 |
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Item 6. |
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34 |
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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)
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March 31, |
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December 31, |
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March 31, |
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2022 |
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2021 |
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2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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$ |
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Accounts receivable, less allowance of $ |
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Inventories, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Goodwill |
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Intangibles, net |
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Operating lease right-of-use assets, net |
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Deferred income taxes, net |
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Other assets, net |
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Total assets |
$ |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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$ |
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Accrued expenses |
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Current portion of operating lease liabilities |
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Current portion of finance lease liabilities |
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Current portion of long-term debt/obligations |
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Total current liabilities |
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Borrowings under revolving lines of credit, net |
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— |
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— |
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Long-term debt, net |
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Deferred income taxes, net |
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— |
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Operating lease liabilities |
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Finance lease liabilities |
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Total liabilities |
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Convertible Preferred Stock (voting); $ |
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Stockholders' equity: |
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Common stock (voting); $ |
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Undesignated preferred stock; |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive income (loss) |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
$ |
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$ |
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$ |
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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)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Net sales |
$ |
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$ |
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Cost of products sold |
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Gross profit |
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Operating expense: |
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Selling, general and administrative |
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Depreciation |
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Amortization |
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Total operating expense |
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Income (loss) from operations |
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Interest expense, financing costs, and other |
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Loss on debt extinguishment |
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Income (loss) from continuing operations before income taxes |
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Provision for (benefit from) income taxes |
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Net income (loss) from continuing operations |
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Net income (loss) from discontinued operations1 |
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— |
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Net income (loss) |
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Dividends on Preferred Stock |
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Net income (loss) attributable to common stockholders |
$ |
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$ |
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Weighted-average common stock outstanding2: |
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Basic |
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Diluted |
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Net income (loss) per share2: |
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Basic - Continuing operations |
$ |
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$ |
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Basic - Discontinued operations |
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Basic net income (loss) per share |
$ |
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$ |
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Diluted - Continuing operations |
$ |
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$ |
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Diluted - Discontinued operations |
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— |
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Diluted net income (loss) per share |
$ |
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$ |
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______________________________
1
2
See accompanying Notes to Condensed Consolidated Financial Statements
4
BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited; in millions)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Net income (loss) |
$ |
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$ |
( |
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Other comprehensive income (loss): |
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Foreign currency translation adjustment |
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Unrealized gain (loss) due to change in fair value of derivatives, net of tax |
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Total other comprehensive income (loss) |
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Comprehensive income (loss) |
$ |
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$ |
( |
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See accompanying Notes to Condensed Consolidated Financial Statements
5
BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited; in millions)
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Common Stock |
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Retained |
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Shares |
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Amount |
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APIC1 |
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Earnings |
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AOCI2 |
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Total |
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Three Months Ended March 31, 2022 |
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Balance as of December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Repurchase and retirement of common stock, net3 |
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— |
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Equity forward contract3 |
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Issuance of common stock, net of shares withheld for taxes |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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Other comprehensive income (loss) |
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— |
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— |
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— |
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— |
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Net income (loss) |
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— |
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— |
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— |
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— |
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Dividends on Preferred Stock |
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— |
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— |
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— |
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( |
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— |
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Balance as of March 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Three Months Ended March 31, 2021 |
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Balance as of December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock, net of shares withheld for taxes |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Other comprehensive income (loss) |
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— |
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— |
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— |
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— |
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Net income (loss) |
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— |
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— |
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— |
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( |
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— |
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( |
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Dividends on Preferred Stock |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance as of March 31, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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____________________________________
See accompanying Notes to Condensed Consolidated Financial Statements
6
BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Statements of Cash Flows1
(Unaudited; in millions)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Operating Activities |
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Net income (loss) |
$ |
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$ |
( |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Stock-based compensation |
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Certain interest expense and other financing costs |
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Loss on debt extinguishment |
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Gain on sale of fixed assets and other |
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Deferred income taxes |
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Loss on sale of business |
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— |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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Inventories |
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( |
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Prepaid expenses and other current assets |
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Accounts payable and accrued expenses |
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Other assets and liabilities |
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Net cash provided by (used in) operating activities |
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Investing Activities |
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Purchases of property and equipment |
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( |
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Acquisition of business, net |
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— |
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Proceeds from sale of business |
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— |
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Proceeds from the sale of assets |
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Net cash provided by (used in) investing activities |
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Financing Activities |
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Borrowings under revolving lines of credit |
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— |
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Payments under revolving lines of credit |
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( |
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( |
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Payments under term loan |
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( |
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( |
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Payments under equipment financing facilities and finance leases |
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( |
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( |
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Repurchase and retirement of common stock, net |
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( |
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Advance payment for equity forward contract |
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( |
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Payment of dividends on Preferred Stock |
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Proceeds from issuance of common stock related to equity awards |
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Payment of taxes related to net share settlement of equity awards |
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( |
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( |
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Net cash provided by (used in) financing activities |
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( |
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Effect of exchange rate changes on cash and cash equivalents |
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( |
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Net increase (decrease) in cash and cash equivalents |
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( |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
$ |
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$ |
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Supplemental Cash Flow Information |
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Operating cash flows provided by (used in) discontinued operations |
$ |
— |
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( |
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Cash paid during the period for: |
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Interest |
$ |
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$ |
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Income taxes, net of refunds2 |
$ |
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$ |
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______________________________
See accompanying Notes to Condensed Consolidated Financial Statements
7
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
On February 10, 2021, the Company completed the sale of its interior products and insulation businesses (“Interior Products”) to Foundation Building Materials Holding Company LLC (“FBM”), pursuant to that certain Equity Purchase Agreement, dated as of December 20, 2020 (the “Purchase Agreement”), by and between the Company and ASP Sailor Acquisition Corp. (“ASP”), for approximately $
The Company operates its business primarily under the trade name "Beacon Building Products" and services customers in all
2. Summary of Significant Accounting Policies
Basis of Presentation
The Company prepared the condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“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. Additionally, the Company has reflected Interior Products as discontinued operations for the three months ended March 31, 2021. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate to the Company's continuing operations. Certain prior period amounts have been reclassified to conform to current period presentation.
The balance sheet as of March 31, 2021 has been presented for a better understanding of the impact of seasonal fluctuations on the Company’s financial condition. The three-month periods ended March 31, 2022 and 2021 each had 63 business days.
On August 11, 2021, the Company’s Board of Directors approved a change in its fiscal year end from September 30 to December 31. The Company’s 2022 fiscal year began on January 1, 2022 and will end on December 31, 2022. This change better aligns the Company’s financial reporting calendar with many of its industry peers and provides internal benefits by shifting the timing of the budgeting, physical inventory, and performance review cycles away from the Company’s busiest time of year.