Skip to main content

Beacon Reports Second Quarter 2020 Results

Beacon (Nasdaq: BECN) (the “Company”) announced results today for its second quarter and six-month period ended March 31, 2020 (“2020”).

“Consistent with our pre-release, we produced record second quarter net sales and adjusted EBITDA,” said Julian Francis, Beacon’s President and Chief Executive Officer. “Q2 again demonstrates significant positive progress toward our goals, highlighted by nearly 5% sales growth the first 2 ½ months, year-to-year gross margin stabilization and positive adjusted operating leverage. Despite being declared an essential business in all markets in which we operate, in mid-March the COVID-19 pandemic forced us to quickly adapt to a changing environment. In response, we have taken swift and meaningful actions to reduce costs. We have also taken proactive measures to reduce inventory and capital expenditures, and we have mitigated any long-term liquidity risks by strengthening our 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. 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 becoming differentiators for customers. We expect these items to drive sustainable benefits when the COVID-19 headwinds have passed.”

Second Quarter

Net sales increased 2.1% to $1.46 billion, from $1.43 billion in 2019. The sales increase was influenced by our sales initiatives around contractor conversions, national account sales, and the continued positive impact of our industry-leading digital platform, partially offset by decreased hurricane-related demand compared to the prior year. Residential roofing product sales decreased 1.3%, non-residential roofing product sales increased 12.6%, and complementary product sales decreased 0.4% compared to the prior year. The second quarter of fiscal years 2020 and 2019 had 64 and 63 business days, respectively.

Net income (loss) was $(122.6) million, compared to $(68.1) million in 2019. Net income (loss) attributable to common shareholders was $(128.6) million, compared to $(74.1) million in 2019. EPS was $(1.87), compared to $(1.08) in 2019. Second quarter results were negatively impacted by the write-off of certain trade names in connection with the Company’s rebranding efforts that were announced in January 2020 (the “Rebranding”). This impact was partially offset by higher sales and gross margins, and lower interest expense, finance, and other.

Adjusted Net Income (Loss) was $(12.5) million, compared to $(24.9) million in 2019. Adjusted EBITDA was $38.9 million, compared to $27.4 million in 2019.

Please see the included financial tables for a reconciliation of “Adjusted” non-GAAP financial measures to the most directly comparable GAAP financial measure, as well as further detail on the components driving the net changes over the comparative periods.

Year-to-Date

Net sales decreased 0.5% to $3.13 billion, from $3.15 billion in 2019. The sales decline was mainly influenced by decreased hurricane-related demand compared to the prior year, partially offset by the continued positive impact of our industry-leading digital platform. Residential roofing product sales decreased 2.3%, non-residential roofing product sales increased 6.0%, and complementary product sales decreased 2.8% compared to the prior year. The first six months of fiscal years 2020 and 2019 had 126 and 125 business days, respectively.

Net income (loss) was $(146.1) million, compared to $(69.0) million in 2019. Net income (loss) attributable to common shareholders was $(158.1) million, compared to $(81.0) million in 2019. EPS was $(2.30), compared to $(1.18) in 2019. Six-month results were negatively impacted by the second quarter write-off of certain trade names in connection with the Rebranding.

Adjusted Net Income (Loss) was $15.8 million, compared to $21.6 million in 2019. Adjusted EBITDA was $133.1 million, compared to $149.1 million in 2019.

Please see the included financial tables for a reconciliation of “Adjusted” non-GAAP financial measures to the most directly comparable GAAP financial measure, as well as further detail on the components driving the net changes over the comparative periods.

The Company will host a webcast and conference call today at 5:00 p.m. ET to discuss these results. The webcast link and call-in details are as follows:

What:

Beacon Second Quarter 2020 Earnings Call

When:

Thursday, May 7, 2020

Time:

5:00 p.m. ET

Webcast:

Beacon Investor Relations – Events & Presentations (live and replay)

Live Call:

(833) 513-0543; Conference ID #4742125

To assure timely access, conference call participants should dial in prior to the 5:00 p.m. ET start time.

Forward-Looking Statements

This release contains information about management's view of the Company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but not limited to, the impact of the COVID‑19 pandemic on the construction sector, in general, and the financial position and operating results of our Company, in particular, which cannot be predicted and could change rapidly, and those set forth in the "Risk Factors" section of the Company's latest Form 10-K. In addition, the forward-looking statements included in this press release represent the Company's views as of the date of this press release and these views could change. However, while the Company may elect to update these forward-looking statements at some point, the Company specifically disclaims any obligation to do so, other than as required by federal securities laws. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release.

About Beacon

Founded in 1928, Beacon is a Fortune 500, publicly-traded distributor of residential and commercial building products in North America, operating over 500 branches throughout all 50 states in the U.S. and 6 provinces in Canada. Beacon serves an extensive base of over 110,000 customers, utilizing its vast branch network and diverse service offerings to provide high-quality products and support throughout the entire business lifecycle. Beacon offers its own private label brand, TRI BUILT, and has a proprietary digital account management suite, Beacon Pro+, which allows customers to manage their businesses online. Beacon’s stock is traded on the Nasdaq Global Select Market under the ticker symbol BECN. To learn more about Beacon, please visit www.becn.com

BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Operations

(In thousands, except share and per share amounts)

 

Three Months Ended March 31,

Six Months Ended March 31,

2020

% of
Net
Sales

2019

% of
Net
Sales

2020

% of
Net
Sales

2019

% of
Net
Sales

Net sales

$

1,458,486

100.0

%

$

1,429,037

100.0

%

$

3,133,598

100.0

%

$

3,150,713

100.0

%

Cost of products sold

1,116,086

76.5

%

1,094,049

76.6

%

2,380,500

76.0

%

2,380,156

75.5

%

Gross profit

342,400

23.5

%

334,988

23.4

%

753,098

24.0

%

770,557

24.5

%

Operating expense:

Selling, general and administrative

318,510

21.9

%

320,408

22.4

%

645,429

20.6

%

648,101

20.6

%

Depreciation

17,495

1.2

%

17,447

1.2

%

36,567

1.2

%

35,048

1.1

%

Amortization1

187,356

12.8

%

51,763

3.6

%

232,134

7.4

%

103,784

3.3

%

Total operating expense

523,361

35.9

%

389,618

27.2

%

914,130

29.2

%

786,933

25.0

%

Income (loss) from operations

(180,961

)

(12.4

%)

(54,630

)

(3.8

%)

(161,032

)

(5.1

%)

(16,376

)

(0.5

%)

Interest expense, financing costs, and other2

23,454

1.6

%

40,452

2.8

%

61,747

2.0

%

78,813

2.5

%

Loss on debt extinguishment

-

0.0

%

-

0.0

%

14,678

0.5

%

-

0.0

%

Income (loss) before provision for income taxes

(204,415

)

(14.0

%)

(95,082

)

(6.6

%)

(237,457

)

(7.6

%)

(95,189

)

(3.0

%)

Provision for (benefit from) income taxes

(81,775

)

(5.6

%)

(26,996

)

(1.8

%)

(91,407

)

(2.9

%)

(26,210

)

(0.8

%)

Net income (loss)

(122,640

)

(8.4

%)

(68,086

)

(4.8

%)

(146,050

)

(4.7

%)

(68,979

)

(2.2

%)

Dividends on Preferred Stock3

6,000

0.4

%

6,000

0.4

%

12,000

0.3

%

12,000

0.4

%

Net income (loss) attributable to common shareholders

$

(128,640

)

(8.8

%)

$

(74,086

)

(5.2

%)

$

(158,050

)

(5.0

%)

$

(80,979

)

(2.6

%)

Weighted-average common stock outstanding:

Basic

68,820,155

68,451,920

68,743,633

68,348,850

Diluted4

68,820,155

68,451,920

68,743,633

68,348,850

Net income (loss) per share5:

Basic

$

(1.87

)

$

(1.08

)

$

(2.30

)

$

(1.18

)

Diluted

$

(1.87

)

$

(1.08

)

$

(2.30

)

$

(1.18

)

____________________________________

1

Three and six months ended March 31, 2020 and 2019 amounts include non-cash accelerated intangible asset amortization of $142.6 million in connection with the Rebranding.

2

Three and six months ended March 31, 2020 amounts include a $5.6 million settlement received in connection with a class action lawsuit and a $5.3 million refund to be received as the final true-up of the $164.0 million payment resulting from the 338(h)(10) election made in connection with the acquisition of Allied Building Products Corp. on January 2, 2018 (the “Allied Acquisition”).

3

Three months ended March 31, 2020 and 2019 amounts are composed of $5.0 million in undeclared cumulative Preferred Stock dividends, as well as an additional $1.0 million of Preferred Stock dividends that had been declared and paid as of period end. Six months ended March 31, 2020 and 2019 amounts are composed of $5.0 million in undeclared cumulative Preferred Stock dividends, as well as an additional $7.0 million of Preferred Stock dividends that had been declared and paid as of period end..

4

Amounts do not include 9,694,619 shares issuable upon conversion of the Company’s participating Preferred Stock because such conversion would be anti-dilutive.

5

Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common shareholders by the fully diluted weighted-average number of common shares outstanding during the period. The following table presents the components and calculations of basic and diluted net income (loss) per share for each period presented (in thousands, except share and per share amounts):

Three Months Ended
March 31,

Six Months Ended
March 31,

2020

2019

2020

2019

Net income (loss)

$

(122,640

)

$

(68,086

)

$

(146,050

)

$

(68,979

)

Dividends on Preferred Stock

6,000

6,000

12,000

12,000

Net income (loss) attributable to common shareholders

$

(128,640

)

$

(74,086

)

$

(158,050

)

$

(80,979

)

Undistributed income allocated to participating securities

-

-

-

-

Net income (loss) attributable to common shareholders - basic and diluted

$

(128,640

)

$

(74,086

)

$

(158,050

)

$

(80,979

)

Weighted-average common shares outstanding - basic

68,820,155

68,451,920

68,743,633

68,348,850

Effect of common share equivalents

-

-

-

-

Weighted-average common shares outstanding - diluted

68,820,155

68,451,920

68,743,633

68,348,850

Net income (loss) per share - basic

$

(1.87

)

$

(1.08

)

$

(2.30

)

$

(1.18

)

Net income (loss) per share - diluted

$

(1.87

)

$

(1.08

)

$

(2.30

)

$

(1.18

)

BEACON ROOFING SUPPLY, INC.

Consolidated Balance Sheets

(In thousands)

 

March 31,

September 30,

March 31,

2020

2019

2019

Assets

Current assets:

Cash and cash equivalents

$

781,172

$

72,287

$

645

Accounts receivable, net

907,539

1,108,134

869,760

Inventories, net

1,037,905

1,018,183

1,031,183

Prepaid expenses and other current assets

305,367

315,643

332,100

Total current assets

3,031,983

2,514,247

2,233,688

Property and equipment, net

247,372

260,376

271,022

Goodwill

2,488,635

2,490,590

2,490,326

Intangibles, net

889,983

1,125,540

1,229,949

Operating lease assets

452,006

-

-

Other assets, net

10

2,059

1,243

Total assets

$

7,109,989

$

6,392,812

$

6,226,228

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

643,086

$

822,931

$

510,434

Accrued expenses

362,817

599,155

453,889

Current operating lease liabilities

98,477

-

-

Current portions of long-term debt/obligations

13,412

18,689

19,988

Total current liabilities

1,117,792

1,440,775

984,311

Borrowings under revolving lines of credit, net

1,001,609

80,961

416,614

Long-term debt, net

2,494,821

2,494,623

2,494,673

Deferred income taxes, net

50,365

103,913

110,064

Non-current operating lease liabilities

349,365

-

-

Long-term obligations under equipment financing, net

963

4,609

8,527

Other long-term liabilities

1,671

6,383

5,702

Total liabilities

5,016,586

4,131,264

4,019,891

Convertible Preferred Stock1

399,195

399,195

399,195

Stockholders' equity:

Common stock

688

685

684

Undesignated preferred stock

-

-

-

Additional paid-in capital

1,091,469

1,083,042

1,073,243

Retained earnings

641,172

799,222

752,855

Accumulated other comprehensive income (loss)

(39,121

)

(20,596

)

(19,640

)

Total stockholders' equity

1,694,208

1,862,353

1,807,142

Total liabilities and stockholders' equity

$

7,109,989

$

6,392,812

$

6,226,228

____________________________________

1

In connection with the Allied Acquisition, 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. The Preferred Stock is 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 will be at a conversion price of $41.26 per share (or 9,694,619 shares of common stock). The Preferred Stock accumulates dividends at a rate of 6.0% per annum (payable in cash or in-kind, subject to certain conditions). The Preferred Stock is not mandatorily redeemable; therefore, it is classified as mezzanine equity on the Company’s consolidated balance sheets.

BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Cash Flows

(In thousands)

 

Six Months Ended March 31,

2020

2019

Operating Activities

Net income (loss)

$

(146,050

)

$

(68,979

)

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

268,701

138,832

Stock-based compensation

9,817

8,264

Certain interest expense and other financing costs

5,721

6,051

Beneficial lease amortization

-

1,145

Loss on debt extinguishment

14,678

-

Gain on sale of fixed assets

(884

)

(1,172

)

Deferred income taxes

(49,320

)

3,086

338(h)(10) election refund1

(5,282

)

-

Changes in operating assets and liabilities:

Accounts receivable

199,063

219,740

Inventories

(21,819

)

(96,052

)

Prepaid expenses and other current assets

6,527

(85,320

)

Accounts payable and accrued expenses

(434,926

)

(368,154

)

Other assets and liabilities

2,950

415

Net cash provided by (used in) operating activities

(150,824

)

(242,144

)

Investing Activities

Purchases of property and equipment

(25,064

)

(26,320

)

Acquisition of businesses, net

-

(163,973

)

Proceeds from the sale of assets

1,122

1,428

Net cash provided by (used in) investing activities

(23,942

)

(188,865

)

Financing Activities

Borrowings under revolving lines of credit

2,029,316

1,880,684

Payments under revolving lines of credit

(1,109,903

)

(1,557,615

)

Payments under term loan

(4,850

)

(4,850

)

Borrowings under senior notes

300,000

-

Payment under senior notes

(309,564

)

-

Payment of debt issuance costs

(3,718

)

-

Payments under equipment financing facilities and finance leases

(4,427

)

(2,642

)

Payment of dividends on Preferred Stock

(12,000

)

(12,000

)

Proceeds from issuance of common stock related to equity awards

1,447

1,559

Payment of taxes related to net share settlement of equity awards

(2,834

)

(3,617

)

Net cash provided by (used in) financing activities

883,467

301,519

Effect of exchange rate changes on cash and cash equivalents

184

208

Net increase (decrease) in cash and cash equivalents

708,885

(129,282

)

Cash and cash equivalents, beginning of period

72,287

129,927

Cash and cash equivalents, end of period

$

781,172

$

645

__________________________________________________

1

Related to a gain recognized for a partial refund of the $164.0 million payment made in connection with the Allied Acquisition; payment was received subsequent to March 31, 2020.

BEACON ROOFING SUPPLY, INC.

Consolidated Sales by Product Line

(In thousands)

 

Sales by Product Line

Three Months Ended March 31,

2020

2019

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

591,213

40.5

%

$

598,917

42.0

%

$

(7,704

)

(1.3

%)

Non-residential roofing products

353,001

24.2

%

313,626

21.9

%

39,375

12.6

%

Complementary building products

514,272

35.3

%

516,494

36.1

%

(2,222

)

(0.4

%)

$

1,458,486

100.0

%

$

1,429,037

100.0

%

$

29,449

2.1

%

Sales by Business Day1

Three Months Ended March 31,

2020

2019

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

9,238

40.5

%

$

9,507

42.0

%

$

(269

)

(2.8

%)

Non-residential roofing products

5,516

24.2

%

4,978

21.9

%

538

10.8

%

Complementary building products

8,036

35.3

%

8,198

36.1

%

(162

)

(2.0

%)

$

22,790

100.0

%

$

22,683

100.0

%

$

107

0.5

%

__________________________________________________

1

The second quarter of fiscal years 2020 and 2019 had 64 and 63 business days, respectively.

BEACON ROOFING SUPPLY, INC.

Consolidated Sales by Product Line

(In thousands)

 

Sales by Product Line

Six Months Ended March 31,

2020

2019

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

1,293,473

41.3

%

$

1,323,780

42.0

%

$

(30,307

)

(2.3

%)

Non-residential roofing products

773,896

24.7

%

729,939

23.2

%

43,957

6.0

%

Complementary building products

1,066,229

34.0

%

1,096,994

34.8

%

(30,765

)

(2.8

%)

$

3,133,598

100.0

%

$

3,150,713

100.0

%

$

(17,115

)

(0.5

%)

Sales by Business Day1

Six Months Ended March 31,

2020

2019

Change

Net Sales

Mix %

Net Sales

Mix %

$

%

Residential roofing products

$

10,266

41.3

%

$

10,590

42.0

%

$

(324

)

(3.1

%)

Non-residential roofing products

6,142

24.7

%

5,840

23.2

%

302

5.2

%

Complementary building products

8,462

34.0

%

8,776

34.8

%

(314

)

(3.6

%)

$

24,870

100.0

%

$

25,206

100.0

%

$

(336

)

(1.3

%)

__________________________________________________

1

The first six months of fiscal years 2020 and 2019 had 126 and 125 business days, respectively.

BEACON ROOFING SUPPLY, INC.

Adjusted Net Income (Loss)1

(In thousands)

 

Three Months Ended March 31,

Six Months Ended March 31,

2020

2019

2020

2019

Net income (loss)

$

(122,640

)

$

(68,086

)

$

(146,050

)

$

(68,979

)

Adjustments:

Acquisition costs2

43,875

61,479

94,509

125,440

Business restructuring costs3

144,461

-

164,991

-

COVID-19 impact4

(33,322

)

-

(33,322

)

-

Effects of tax reform

-

(462

)

-

(462

)

Total adjustments

155,014

61,017

226,178

124,978

Tax impact of total adjustments5

(44,854

)

(17,815

)

(64,282

)

(34,383

)

Total adjustments, net of tax

110,160

43,202

161,896

90,595

Adjusted Net Income (Loss)

$

(12,480

)

$

(24,884

)

$

15,846

$

21,616

_________________________

1

Adjusted Net Income (Loss) is defined as net income excluding the impact of acquisition costs, business restructuring costs, the effects of tax reform, and the direct financial impact of the COVID-19 pandemic.

2

The following table presents a breakout of the components of acquisition costs for each of the periods indicated:

Three Months Ended March 31,

Six Months Ended March 31,

2020

2019

2020

2019

Amortization of intangible assets

$

44,707

$

51,764

$

89,485

$

103,784

Costs classified as selling, general, and administrativea

2,447

6,687

6,299

15,605

Non-operating (income) expensesb

(3,279

)

3,028

(1,275

)

6,051

Total acquisition costs

43,875

61,479

94,509

125,440

___________________________

a.

Adjusted Net Income (Loss) is defined as net income excluding the impact of acquisition costs, business restructuring costs, the effects of tax reform, and the direct financial impact of the COVID-19 pandemic.

b.

The following table presents a breakout of the components of acquisition costs for each of the periods indicated:

3

The following table presents a breakout of the components of business restructuring costs for each of the periods indicated:

Three Months Ended March 31,

Six Months Ended March 31,

2020

2019

2020

2019

Amortization in connection with the Rebranding

$

142,649

$

-

$

142,649

$

-

Costs classified as selling, general, and administrativea

816

-

821

-

Non-operating (income) expensesb

996

-

21,521

-

Total business restructuring costs

144,461

-

164,991

-

___________________________

a.

Mainly composed of costs stemming from headcount rationalization efforts and certain Rebranding costs.

b.

Amounts include accrued estimated costs related to employee benefit plan withdrawals and amortization of debt issuance costs. For the six months ended March 31, 2020, amount also includes a loss on debt extinguishment of $14.7 million in connection with the October 2019 debt refinancing.

4

Mainly composed of a $33.3 million income tax benefit resulting from our application of the CARES Act (see Note 14 in the Notes to Condensed Consolidated Financial Statements), partially offset by severance and other costs directly related to the Company’s response to the COVID-19 pandemic.

5

The effective tax rate applied to these adjustments is calculated by using forecasted adjusted pre-tax income while factoring in estimated discrete tax adjustments for the fiscal year. The tax impact of adjustments for the three months ended March 31, 2020 and 2019 were calculated using a blended effective tax rate of 28.9% and 29.2%, respectively. The tax impact of adjustments for the six months ended March 31, 2020 and 2019 were calculated using an effective tax rate of 28.4% and 27.5%, respectively.

We use Adjusted Net Income (Loss) to evaluate financial performance, analyze the underlying trends in our business and establish operational goals and forecasts that are used when allocating resources. We expect to compute Adjusted Net Income (Loss) consistently using the same method each period.

We believe that Adjusted Net Income (Loss) is a useful measure because it permits investors to better understand changes over comparative periods by providing financial results that are unaffected by certain items that are not indicative of ongoing operating performance.

While we believe Adjusted Net Income (Loss) is useful to investors when evaluating our business, it is not prepared and presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), and therefore should be considered supplemental in nature. You should not consider Adjusted Net Income (Loss) in isolation or as a substitute for net income calculated in accordance with GAAP. Adjusted Net Income (Loss) may have material limitations including, but not limited to, the exclusion of certain costs without a corresponding reduction of net income for the income generated by the assets to which the excluded costs are related. In addition, Adjusted Net Income (Loss) may differ from similarly titled measures presented by other companies.

BEACON ROOFING SUPPLY, INC.

Adjusted EBITDA1

(In thousands)

 

Three Months Ended March 31,

Six Months Ended March 31,

2020

2019

2020

2019

Net income (loss)

$

(122,640

)

$

(68,086

)

$

(146,050

)

$

(68,979

)

Interest expense, net

35,625

41,815

70,421

81,631

Income taxes2

(81,775

)

(26,996

)

(91,407

)

(26,210

)

Depreciation and amortization3

204,851

69,210

268,701

138,832

Stock-based compensation

4,661

4,807

9,817

8,264

Acquisition costs4

(2,835

)

6,687

1,017

15,605

Business restructuring costs5

943

-

20,627

-

COVID-19 impact6

23

-

23

-

Adjusted EBITDA

$

38,853

$

27,437

$

133,149

$

149,143

Adjusted EBITDA as a % of net sales

2.7

%

1.9

%

4.2

%

4.7

%

_________________________________

1

Adjusted EBITDA is defined as net income excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, acquisition costs, business restructuring costs, and the direct financial impact of the COVID-19 pandemic. EBITDA is a measure commonly used in the distribution industry, and we present Adjusted EBITDA to enhance your understanding of our operating performance.

2

Three and six months ended March 31, 2020 amounts include tax benefits from deferred tax adjustments of $36.5 million related to the Rebranding and $33.3 million related to the impact of the recently announced CARES Act related to the COVID-19 pandemic that allows the Company to carry back net operating losses for five years and tax effects current year net losses at a 35% rate.

3

Three and six months ended March 31, 2020 amounts include the impact of non-cash accelerated intangible asset amortization of $142.6 million related to the write-off of certain trade names in connection with the Rebranding.

4

Includes selling, general, and administrative costs related to acquisitions (excluding the impact of tax). For the three and six months ended March 31, 2020, amounts are offset by a $5.3 million refund to be received as the final true-up of the $164.0 million payment resulting from the 338(h)(10) election made in connection with the Allied Acquisition. The other items the Company classifies as acquisition costs are embedded within the other balances reported in the table.

5

Six months ended March 31, 2020 amount is mainly composed of a loss on debt extinguishment of $14.7 million in connection with debt refinancing, as well as accrued estimated costs related to employee benefit plan withdrawals, costs stemming from headcount rationalization efforts, and certain Rebranding costs.

6

Mainly composed of severance and other costs directly related to the Company’s response to the COVID-19 pandemic.

We use Adjusted EBITDA to evaluate financial performance, analyze the underlying trends in our business and establish operational goals and forecasts that are used when allocating resources. We expect to compute Adjusted EBITDA consistently using the same methods each period.

We believe that Adjusted EBITDA is a useful measure because it permits investors to better understand changes over comparative periods by providing financial results that are unaffected by certain items that are not indicative of ongoing operating performance.

While we believe Adjusted EBITDA is useful to investors when evaluating our business, it is not prepared and presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), and therefore should be considered supplemental in nature. Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows from operations, or any other items calculated in accordance with GAAP. Adjusted EBITDA may have material limitations including, but not limited to, the exclusion of certain costs without a corresponding reduction of net income for the income generated by the assets to which the excluded costs are related. In addition, Adjusted EBITDA may differ from similarly titled measures presented by other companies.

Contacts:

Joseph Nowicki, Executive VP & CFO
Joseph.Nowicki@becn.com
571-323-3939

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.