Beacon announced its preliminary financial results for the second quarter of its fiscal year, including projected net sales of $1.46 billion. Net sales are projected to grow 2% year-over-year (YOY) and represent a daily sales increase of 0.5% YOY.
For the three month period ending March 31, 2020, Beacon projects a net loss between $120 and $130 million. The net less projection includes the impact of non-cash accelerated intangible asset amortization of $143 million, stemming from the distributor’s rebranding. The company projects adjusted EBITDA in the second quarter to range between $30 and $40 million.
“We are pleased with preliminary second quarter sales that broadly met our internal expectations and continue the momentum from Q1, even as COVID-19 began to impact our daily sales in March,” CEO and president Julian Francis said in a news release. “We made progress against each of our strategic priorities: seeing positive organic growth; improving our operating efficiency; increasing use of our digital solution; and extending our branch On Time & Complete network by opening a custom-built location in the important Denver market.”
Francis said the company has experienced more significant YOY headwinds in a select number of states, including California, New York, New Jersey, and Pennsylvania, that have strong restrictions in place. As a result, overall April daily sales are down approximately 20% YOY, according to Francis.
In addition to announcing preliminary financial results for the fiscal quarter, Herndon, Va.-based Beacon also provided several coronavirus (COVID-19) updates. Francis said nearly all of the company’s approximately 500 branches remain open and have been designated essential businesses.
“We continue to deliver products to all areas of the construction market, both residential and commercial,” Francis said. “Repair and replacement of damaged or aging roofs represents more than 80% of total roofing demand and clearly contributes to the health and well-being of the community, particularly those hit by damaging storms these past few weeks. While we continue to serve customers in every way possible, our online platform has stood out as an increasingly valuable tool in this operating environment.”
Beacon has responded to changes in localized demand through cost-cutting actions, including reducing seasonal and temporary hiring, cuts in overtime hours, and reducing hourly schedules. The company has also implemented furloughs in operating and non-operating functions, reduced salaries, and restricted capital expenditures, Francis said. Additionally, Beacon recently elected to draw down approximately $725 million from its revolving credit facility in response to uncertainty caused by the coronavirus pandemic.
“We have taken meaningful action to improve our cost structure and are prepared to take additional steps to appropriately manage the business through this uncertain period,” Francis said. “We are also monitoring input costs to ensure we are well-positioned to take advantage of any opportunities that present themselves over the next several quarters. We are confident these actions will make Beacon a stronger company, with many of these benefits extending beyond the COVID-19 disruption.”
Beacon distributes roofing materials and complementary building products. The company operates over 500 branches throughout all 50 states in the United States and six Canadian provinces. The distributor was the third largest company on the 2019 ProSales 100 list.
