Beacon reported record calendar year performance in net sales, net income, and adjusted EBITDA for the year ended December 31, 2021, according to the company’s quarterly earnings report. The report was the first since Beacon announced it was moving the end of its fiscal year from September 30 to December 31. In addition to the calendar year results, Beacon also reported financial results for its transition period (October 1, 2021 to December 31, 2021) and recast certain unaudited historical financial information to allow for comparability of future financial data to historical financial data.
“2021 was nothing short of transformational. I’m extremely proud of the Beacon team’s ability to successfully execute in a supply-challenged environment to finish the year in record fashion,” Julian Francis, Beacon’s president and CEO, said in a prepared statement. “We eclipsed a meaningful profitability threshold, delivering double-digit adjusted EBITDA margin for the first time in our history.”
For the transition period of October 1, 2021 to December 31, 2021, Beacon reported net sales increased 11.3% year-over-year (YOY) to $1.75 billion, a record for net sales in the calendar fourth quarter, according to the company. Transition period net sales increased across Beacon’s three lines of business, driven by a weighted-average selling price increase of approximately 15-16%. Residential roofing product sales increased 8.9% YOY in the transition period, complementary product sales increased 15.7% YOY, and non-residential roofing product sales increased 12.8% compared to the prior year.
For the full 2021 calendar year, net sales increased 12.2% to a record level of annual net sales. Residential roofing sales increased 11.3% in 2021 compared to 2020, complementary product sales increased 19.4%, and non-residential roofing product sales increased 8.5% YOY.
Gross margin in the transition period improved to 26.3% from 25.4% in the prior year, reflecting pricing execution that drove price-cost improvement, according to the distributor. Operating expense increased, primarily due to the $22.3 million loss on Beacon’s sale of its solar product business. Operating expense in the period was also higher due to higher payroll and benefits expense, higher general and administrative expenses, and higher selling costs. Operating expense as a percent of sales increased, though, reflecting the loss on sale of solar products.
For the full 2021 calendar year, gross margin improved 230 basis points to 26.7%, reflecting pricing execution and price-cost improvement. Operating expense decreased in 2021 compared to the prior year, due to the write-off of certain trade names in connection with Beacon’s rebranding efforts in 2020.
Net income in the transition period was $68.1 million, compared to $47.4 million in the prior year. Adjusted EBITDA was $174.1 million in the period, compared to $142.9 million in the year earlier period.
For the full calendar year, net income from continuing operations was $241.9 million, compared to a loss of $9.9 million in 2020. Adjusted EBITDA was $685.9 million, compared to $464.6 million 2020.
“Our calendar fourth quarter results are a demonstration of our positive momentum entering 2022, as we again generated record top-line and bottom-line results. Our renewed financial flexibility provided us the capacity to reinvest in the growth of our business,” Francis said. “We successfully closed on two acquisitions in recent months, expanding our presence in key markets. In addition, we divested our solar products business, further focusing our team on delivering high-caliber service to our core exterior customer.”