The strength of the residential roofing market and complementary products growth help drive double-digit first quarter net sales growth for Beacon. Net sales for continuing operations during the first quarter of 2021, which also benefited from price increases, increased 11.4% on a year-over-year (YOY) basis to $1.6 billion, according to the company’s quarterly earnings report.
Residential roofing product sales increased 21.2% YOY and complementary products sales increased 8.8% while non-residential roofing product sales decreased 3.3% compared to the prior year period.
Additionally, Herndon, Va.-based Beacon said robust demand “combined with strong operational execution” drove YOY improvement in net income and adjusted EBITDA. Net income from continuing operations was $47.4 million, compared to a $24 million loss in the first quarter of the 2020 fiscal year. Improvements in first quarter results were driven by increased net sales, higher gross margins, and reduced operating expenses, according to Beacon. The distributor’s adjusted EBITDA from continuing operations in the quarter increased to $142.9 million from $76.9 million in the first quarter of 2020.
Beacon’s gross margin for continuing operations improved 140 basis points YOY to 25.4%, reflecting pricing execution and price-cost improvement. The distributor reported operating expenses and adjusted operating expenses both decreased compared to the first quarter of 2020, attributable to the positive impact of productivity initiatives and cost focus amid an increasing demand environment.
“First quarter results represent an impressive example of the underlying potential of our company,” Julian Francis, Beacon’s president and CEO, said in a prepared statement. “Leveraging a robust residential demand environment, we produced the strongest quarterly organic sales growth in nearly five years, and our focus on sales effectiveness, pricing execution, productivity initiatives, and expense management drove adjusted EBITDA margins to the highest Q1 levels in over a decade.”
When Beacon’s continuing operations were combined with discontinued operations, the distributor’s net loss widened to $220.5 million. The net loss was driven by a non-cash charge of $355 million related to the planned sale of the company’s interior products division to American Securities, first announced in December 2020.
“The transaction will strengthen our balance sheet, enhance financial flexibility, and sharpen our focus on the core exteriors business,” Francis said of the sale of the interior products division. “Driven by its high concentration of non-discretionary repair and remodel demand, exteriors offers a unique platform for us to build around in the future.”
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 second largest company on the 2020 ProSales 100 list.
