Beacon reports Q3 2024 financials
Beacon has shared financial results for the third quarter ended September 30, 2024.
“Beacon’s third quarter results demonstrated the resilience of our business model and the team’s strong execution,” said Julian Francis, Beacon’s president & CEO. “We have, once again, shown that we can grow in any environment. The majority of our demand is underpinned by non-discretionary repair and reroofing, which remained solid in the third quarter. However, despite the overall level of activity lower than our expectation, disciplined margin management resulted in favorable price-cost across all lines of business. In addition, in September, we took action to lower operating expense by aligning our staffing with current market conditions. We expect these actions will result in annual savings of approximately $45 million. For the quarter, we delivered record net sales, solid net income, and the highest Adjusted EBITDA in our history."
Q3 2024 results
Beacon's net sales increased to $2.77 billion, 7.3 percent (5.6 percent on a per-day basis) growth compared to the prior year, and a company record for quarterly net sales. Additionally, acquired branches contributed approximately 5.6 percent to the increase in third quarter net sales.
Residential roofing product sales increased 2.3 percent (0.7 percent on a per-day basis), non-residential roofing product sales increased 9.4 percent (7.7 percent on a per-day basis), and complementary product sales increased 17.2 percent (15.4 percent on a per-day basis) compared to the prior year.
The increase in residential roofing product sales was primarily due to price execution. The increase in non-residential roofing product sales was primarily due to higher volumes driven by strong underlying market demand and solid market execution. The increase in complementary product sales was largely due to three waterproofing acquisitions totaling 20 branches since September 30, 2023. The three-month periods ended September 30, 2024 and 2023 had 64 and 63 business days, respectively.
Gross margin increased to 26.3%, from 26.0% in the prior year, as higher average selling prices for our products more than offset higher product costs and a higher non-residential product mix. The increases in operating expense and adjusted operating expense were attributable to acquired branches, as well as higher organic selling, general, and administrative (SG&A) expense. The increase in organic SG&A expense was primarily due to higher payroll and employee benefit costs and warehouse operating costs.
At the end of the third quarter, in response to market conditions, Beacon reduced headcount. The increase in payroll and employee benefit costs was due to a higher average number of employees in 2024 coupled with one-time severance payments and employee benefit costs for employees impacted by Beacon's operating cost reduction initiative. The increase in warehouse operating costs was primarily due to higher rent expense.
Net income (loss) was $145.3 million, compared to $161.3 million in the prior year. Adjusted EBITDA was $325.2 million, compared to $309.6 million in the prior year.
Read Beacon's full Q3 2024 release here, and read a transcript of the company's earnings call here.
