Beacon Roofing Supply, Inc. 8-K Apr. 19, 2021 7:56 AM

Item 2.02

Operating results and financial condition

In connection with the proposed refinancing transactions, the Company is providing the information included in Section 2.02 of this Form 8-K to disclose certain preliminary estimated unaudited operating results for the fiscal quarter ended March 31, 2021, which will be provided to potential lenders and be aware of investors in connection with the proposed refinancing transactions. The information in Item 2.02 of this Form 8-K is provided and will not be considered “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

Preliminary estimated results for the fiscal quarter ended March 31, 2021

While our consolidated financial statements as of and for the three months ended March 31, 2021 are not yet complete or available as of the date of this Form 8-K, we are presenting certain preliminary estimated financial information as of and for the three months ended March 31, 2021. Beginning with the company’s condensed consolidated financial statements for the three months ended December 31, 2020, the company reflected its interior products and insulation (“interior products”) business, which was sold to Foundation Building Materials Holding Company LLC on February 10, 2021, as discontinued operations for all periods presented. Accordingly, preliminary estimated results for the fiscal quarter ended March 31, 2021 reflect the company’s Interior Products business as discontinued operations and, for comparison purposes, net sales, net result (loss) from continuing operations and adjusted EBITDA for the fiscal quarter ended in March. 31, 2020 have been reclassified to conform to the current period presentation.

We estimate that our net sales for the fiscal quarter ended March 31, 2021 will be between approximately $ 1.31 billion and $ 1.32 billion, a growth of approximately 10% compared to net sales of $ 1.197 billion for the fiscal quarter ended March 31, 2020 (as adjusted to reflect our Interior Products business as discontinued operations). The expected increase in net sales compared to the same period last year is mainly due to strong end-market demand for residential roofing products and favorable pricing.

In addition, we estimate that our net result (loss) from continuing operations and Adjusted EBITDA for the fiscal quarter ended March 31, 2021 will improve significantly compared to our net result (loss) from continuing operations and Adjusted EBITDA of $ (121.3) million and $ 22.1 million for the fiscal quarter ended March 31, 2020 (as adjusted to reflect our Interior Products business as discontinued operations). The foregoing improvements are mainly attributable to higher net sales, gross margin expansion and operating leverage, and with respect to the net result (loss) from continuing operations only, a prior year non-cash amortization of intangible assets as as a result of our previously announced rebranding. efforts.

Adjusted EBITDA is a non-GAAP measure defined as net profit (loss) from continuing operations excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, the impact of stock-based compensation, acquisition costs, restructuring costs, income taxes related to the remeasurement of deferred tax assets and liabilities in connection with the Company’s application of the CARES Act and costs directly related to the Company’s response to the COVID-19 pandemic. We use Adjusted EBITDA to evaluate financial performance, analyze underlying trends in our business and determine operational goals and


forecasts used in resource allocation. We believe that Adjusted EBITDA is a useful measure as it allows investors to better understand changes in underlying business performance over comparative periods by providing investors with financial results unaffected by certain items that are not indicative of ongoing operating performance . The foregoing measure may differ from information of the same title presented by other companies. Accordingly, you should not place undue reliance on such preliminary estimated financial information.

The following table is a reconciliation of our net result (loss) from continuing operations and adjusted EBITDA for the fiscal quarter ended March 31, 2020 (as adjusted to reflect our Interior Products business as discontinued operations):

Three months ended March 31

2020

(not checked, in millions)

Net result (loss) from continuing operations

(121.3

Interest charges, net

35.6

Income taxes

(77.9

Depreciation and amortization

183.3

Stock-based compensation

4.3

Acquisition costs1)

(2.9

Company restructuring costs2)

1.0

Adjusted EBITDA

22.1

(1)

Acquisition costs represent certain items included in the selling, general and administrative costs related to acquisitions, including: professional fees, branch integration costs, travel expenses, dismissal and retention costs, and other personnel costs.

(2)

The cost of corporate restructuring represents certain items included in the selling, general and administrative expenses resulting from workforce rationalization efforts and rebranding costs.

Our financial close procedures for the fiscal quarter ended March 31, 2021 have not yet been completed. The preliminary estimated financial information set forth above does not constitute a comprehensive overview of our results of operations or financial condition as of or for the fiscal quarter ended March 31, 2021 and is based solely on information available to us at the date of this form. 8-K. Our actual results of operations and financial condition as of and for the fiscal quarter ended March 31, 2021 may differ from our current expectations and may differ from the information described above, as additional material developments and adjustments may occur between now and the time of the financial statements. is published. and other disclosures for this period have been completed, including all disclosures required by generally accepted accounting principles in the United States (“GAAP”). In addition, these preliminary estimates are not necessarily indicative of the results that will be achieved for the remainder of the 2021 fiscal year or in any future period. There can be no assurance that these estimates will be realized, and estimates are subject to risks and uncertainties, many of which are not within our control. The foregoing information should not be viewed as a substitute for full financial statements prepared in accordance with GAAP or as a measure of performance. Our preliminary estimated financial information constitutes forward-looking statements.

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