Beacon Roofing Appoints New CFO

Beacon (NASDAQ: BECN) announced the appointment of Carmelo Carrubba, the current Vice President of Strategy and Transformation, as the interim Chief Financial Officer effective January 20, 2024. This follows the departure of the current Executive Vice President & Chief Financial Officer, Frank Lonegro, who is set to leave the company on February 1, 2024.

Julian Francis, Beacon's President and CEO, expressed his excitement about Carrubba's new role, stating, "I'm delighted that Carmelo has accepted this interim responsibility and look forward to working with him in this expanded role until a permanent CFO has been appointed."

The company also released its estimated preliminary results for the quarter and full year ended December 31, 2023. Beacon's net sales for the fourth quarter of 2023 are expected to be approximately $2.3 billion, with gross margins around 25.7%. Net income for the same period is estimated to range between $92 million and $96 million, with diluted net income per share expected to range between $1.42 to $1.48 per share. For the full year ended December 31, 2023, net sales are expected to be approximately $9.1 billion, with gross margins around 25.6%.

Francis expressed satisfaction with the company's performance, noting, "This performance demonstrates the team's continued high level of execution on ambition 2025 in a dynamic macroenvironment."

Looking ahead to 2024, Beacon expects to deliver low single-digit top-line growth, driven primarily by ambition 2025 initiatives, price carryover, and the benefit of two additional selling days. The company also anticipates relatively stable gross margins year over year and expects full-year 2024 adjusted EBITDA to grow by low single digits compared to its record performance in 2023.

Beacon plans to continue its execution of its ambition 2025 initiatives in 2024, including investments in tuck-in acquisitions and greenfields, enhancements to its sales organizations, expansion of its digital and private label offerings, growth in its national accounts business, initial deployment of the company's pricing model, and driving productivity through branch optimization efforts and bottom quintile branch improvements.

The company anticipates announcing final earnings results for the quarter and full year ended December 31, 2023, on or about February 27, 2024. The preliminary results and outlook are subject to the company's detailed quarter and year-end close procedures. The full 8-K submission can be accessed here.

2018 2019 2020 2021 2022 2023
Revenue (MM) $6,418 $5,996 $5,917 $6,642 $8,430 $8,790
Revenue Growth n/a -6.58% -1.32% 12.26% 26.92% 4.27%
Operating Margins 3% 2% 1% 7% 8% 8%
Net Margins 2% 0% -1% -1% 5% 5%
Net Income (MM) $99 -$11 -$81 -$46 $458 $413
Net Interest Expense (MM) $136 $154 $129 $98 $84 $114
Depreciation & Amort. (MM) $60 $60 $58 $59 $75 $85
Earnings Per Share $1.05 -$0.51 -$1.52 -$0.57 $5.55 -$1.07
EPS Growth n/a -148.57% -198.04% 62.5% 1073.68% -119.28%
Diluted Shares (MM) 68 69 70 72 68 63
Current Ratio 2.43 2.01 2.4 1.9 2.03 1.73

Beacon Roofing Supply has weak operating margins with a positive growth rate, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and irregular cash flows.

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