Beacon reported a net loss of $122.6 million during the distributor’s fiscal second quarter, a significant drop from the loss of $68.1 million recorded in the same period a year ago. The company said second quarter results were negatively affected by the write-off of certain trade names in connection with Beacon’s rebranding in January 2020.
While the distributor’s net loss widened, Beacon reported net sales in the fiscal second quarter increased 2.1% year over year (YOY) to $1.46 billion. According to Beacon’s quarterly earnings report, sales were positively influenced by its sales initiatives around contractor conversations, national account sales, and the continued positive impact of Beacon’s digital platform. Sales were partially offset by decreased hurricane-related demand compared to the second quarter of 2019.
Residential roofing product sales at Beacon decreased 1.3% YOY in the second quarter and complementary product sales decreased 0.4% YOY while nonresidential roofing product sales increased 12.6% YOY. The second quarter of the 2020 fiscal year had one more business day than the same period in 2019.
Beacon reported an adjusted EBITDA of $38.9 million in the fiscal second quarter, an increase of over $10 million from the second quarter of 2019.
“Consistent with our prerelease, we produced record second quarter net sales and adjusted EBITDA,” Beacon CEO and president Julian Francis said in a news release. “Q2 again demonstrates significant positive progress towards our goals, highlighted by nearly 5% sales growth in the first 2.5 months, year-to-year gross margin stabilization, and positive adjusted operating leverage.”
Francis said the coronavirus (COVID-19) pandemic forced the distributor to quickly adapt to a changing environment in mid-March. The company has taken several cost-cutting actions, including reducing inventory and capital expenditures and mitigating long-term liquidity risks by strengthening its cash position.
“April sales declined with considerable divergence in state-by-state performance, as certain states have been significantly impacted by state and local government restrictions,” Francis said. “With that said, we are well prepared for a range of demand scenarios through a strong operating model, financial flexibility, and appropriate cost actions. Amid this period of uncertainty, we are finding opportunities to improve productivity and seeing our industry-leading digital platform and enhanced levels of customer service increasingly become differentiators for customers.”
Herndon, Va.-based Beacon distributes roofing materials and complementary building products. The company operates over 500 branches throughout all 50 U.S. states and six Canadian provinces. The distributor was the third largest company on the 2019 ProSales 100 list.
