BECN - Earnings call transcript Q2 2024 | Beacon Roofing Supply, Inc.

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Operator

Good evening, ladies and gentlemen, and welcome to the Beacon Second Quarter 2024 Earnings Call. My name is Elliot, I'll be your coordinator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the call over to Mr. Binit Sanghvi, Vice President, Capital Markets and Treasurer. Please proceed, Mr. Sanghvi.

Binit Sanghvi

our evening, the as call. Financial time joined Julian Good you we Julian section today's with of Today, Elliot. and open After we that will Beacon's prepared posted by to the taking begin Officer; for slide will to questions. Francis, follow website. you, the deck Prith call everybody. Beacon's the always, and remarks Officer. And thank I'm Prith Thank Ghandhi, Executive Chief call Chief join will Investor for Relations our that,

please couple begin, we reference brief Before Slide X a of for reminders.

call performance. about the this company's future contain and objectives First, forward-looking will plans statements and

can forward-looking from XXXX those limited as statements similar a by result historical expect, may anticipate, forth statements relate estimate, not identified section facts meaning. set the not differ indicated and in such Factors do materially strictly or various words other but to, Actual factors, XX-K. as Risk Forward-looking of believe to those results of because including, such and be important they of current use words form the company's

on Second, set to of at August company of today's XXXX, in are The and the presentation these in presentation measures this the our And will available law, and by comparable non-GAAP is Both this the as these measures. update measures to appendix becn.com. obligation call. finally, and of press non-GAAP today, reconciliation or except statements. most certain website required the release revise forth accompanying and to undertakes are to references X, forward-looking information GAAP release press the the on no forward-looking the statements call contain based contained as call any this

opening remarks Julian. Now let's begin with from

Julian Francis

me everyone. execution our let Thanks, I'm another begin you of that underpinned outlook. that initiatives. quarter to of solid prior delivered our our assumptions growth But on review, I remind the pleased Binit. say before we afternoon, Good

and down be installation said declined there because the last roofing than first roofing, in but expected of year, improvement and year's market more the We would year-on-year reroofing. In the would offset would contraction substantially construction grow demand volumes we as residential our of the in activity the nonstorm-related residential commercial storm-related contract a new destocking. be half that in

slightly also this commercial construction. expect as average. better with repair reroofing performed storm part in shift and than a We we expected demand mix expected, and the product new rather demand market to in large, business. activity and our new with slightly would rare more anticipated worse, of than impact to That be commercial end By has XX-year we and line

And digits given single EBITDA sales which, although the to delivered in second contributions team higher quarter. year-over-year, prices Now the X. weather Against expectations that and average initial the on In we with slightly net drive our backdrop, record margins. nearly than combined our from created XXXX lower once Slide to for paths a were quarterly let's plan demonstrated sales. growth, up low and Ambition this has delivered we adjusted begin our selling acquisitions double-digit greenfields again, multiple quarter, X%

we from from a in came level increase. meet to XX price as Adjusted the additional approximately single year our our of expectations, head below last April at margin increased branches gross activity. Our our staffing to count lower-than-expected maintain quarter largely second XX.X% basis of anticipated points at the above but contribution OpEx higher to profits primarily and due related inventory

to and be locations impact also M&A impacted leverage. yet of recent fully greenfield operating negatively synergized, the Additionally,

offerings commercial meet regions. Entering serving the conditions contractors product and the solutions be commercial We announcements the offering and and to the in improving metal preparing pricing the Los roofing also Since and including history and Florida's and branches local capital customer fabricators delivering our service. model. roofs we private return business, while metal in staffing metals the we of in future, leading including continue reinvest to recent the our of levels demonstrates to coastal in today Angeles to operations our shareholders. use include focus maintaining end needs XX of have digital balance investing of year, inventory growing capacity proactive in Beacon's market Extreme and to quarter, M&A responding investments metro the while first We're roofing sheet high-caliber acquired for Southern Metal second California, our in residential adjusting to platform, by results will label integrity market half our a Extreme our our metals. the business. XX-year integrity extend has on Roofesmart conduct

Now please to turn X. Page

laid As deliver and to our know, achieving generate focus growth, returns. targets these margins, we great you to drive A to many of adjusted operate double-digit EBITDA is how customers organization build we shareholder central goals. our consistent relentless out superior above-market a on and

day to a customer and legacy ensure on are every working is deliver team Our great service. we our building experience of

our me starting you building we a are with an with update winning how initiatives, Let strategic provide on culture.

as to we the added today's recently employee employees health As program launched and face. upgraded new team program, assistance part to families members, on of recognize as health an has mental Wellness, emphasis our physical the challenge well their our commitment

social of our build our progress and the and of social our corporate environmental our transparency is One reported commitment by thing, and which emissions action proudly our issued environment. on annual we intensity XXXX. demonstrated right third efforts to this values years for the to goal We having responsibility May, better report, topics. towards applies to of our do core In X

to energy. and emissions fleet emissions sustainable greenhouse In reduce those a we operating renewable X more gas X by and Scope investing our our and in outlined addition, efforts

are on all Our the of report. go XXXX full website CSR our I reports and to encourage highlights stakeholders how we our our progressing to commitment. view

plans, our in greenfields customer targeted reach above including Expanding and growth Our continues is initiatives. a second lever major pillar investments acquisitions. market a driving through set to our margins be and growth in our enhancing of

continues new sales time reach us giving a the our branch, greenfield we new branches time our and and to to add reduced on proposition enhances Our team pipeline have XX customers. This takes to year-to-date. and overall earn value share. average it opportunity the our us we we opened locations execute of have distance Each resources market

We Metals May. have acquisitions now earlier. call Co XXXX, of ] branches of goal Greenville, siding beginning the discussed And acquisitions, purchase Smalley we general our recent since of we Integrity & and exceeding opened highlighted XX original Roofismat metals supply of new XXXX Extreme in and [ roofers of Ambition our the XX our on total. On

XX with track mentioning built have In Smalley announcing plan, West, than contractors of acquired are of total, XX the to its acquisition ahead XX of markets. Since million locations adding these value-added solutions is distribution the total, approximately new specialty performing companies branches. and spread throughout worth again Ambition national year and platform, it we in these the both providing a In expectations. have record of we leading revenue $XXX However, in base waterproofing $XXX restoration with that we capital towards have deployed more construction acquisitions million. XXXX our acquisitions, adding our

as generates sales quarter, sales were continues be XX% year-over-year. when a enhances for highest by quarterly and achieved highlight at grew XXX through capability larger margin roughly ever loyalty to clear to our basket nearly increases and customer XX%. approximately online the our digital Beacon, sizes advantage basis digital platform Our competitive channels. In second compared we customers residential a to Digital our we adoption offline sales points,

collaboration alliance an invest platform more imagery, just place supply and and enhanced to as with EagleView Beacon it choose commenced makes contractors last week accurately and strengthen analytics. their for efficiently allowing such, to provider them run This of to digital as aerial and their partner. orders, easier our continue to a leading We quickly businesses software

Our above-market Ambition been completing varieties techniques including To details, sessions launched Hundreds understanding focus attended we the new in a And the the on develop roof Through employees confident training hands-on achieve X systems. members certification. product solutions steps a of commercial e-learning talent. our advanced all of and to slope this leader. growth installation their low and Team past have improve knowledgeable program. become level and of more roofing sales to needs and and able loyalty, of the We initiatives will with that goal, wallet roofing interactions over in of positive team, XXXX create taking we and growth the must commercial we targets share. outlined support have market are XXX plan. increase higher year, better basics, the of customers our key best-in-class branch commercial resulting is contracted

discussed are quarters, as several through operational Now excellence capacity in continuous and have our and productivity enhancing we initiatives. improvement we

this dollars contributions process, have to class Our branch additional the process $X of focus year this has on and Through quintile bottom is generated and million already no EBITDA generated different. meaningful the we XXXX. from approximately

flow And bottom including placement able also from optimization systematic all efforts support achieve a approach branch we to Our yard branch from acquisition branches, Through these deployed to sales integrating all existing tools and efficiency, improvements. and are portfolio. capacity line synergies showing optimizing our [indiscernible] are acquired line top increasing performance are product and assets. for which results, productivity improves of increased picking storage

relative as the have our near report As pro the to pleased we continue time be recent have forma a are let's the term. how calls, shareholder on to yet I'm likely fourth, previous be But to that are review acquisitions transaction. that the of improve dilutive we mentioned our whole And in in value. synergized creating to at portfolio to the margins

announced of accelerated The and demonstrates million. during to delivering amount into entered in buyback the XXXX both Ambition in previously $XXX repurchase plan. confidence the shareholders additional to an value As commitment program our our quarter, the we share program

to we growth multiple margin truly can through have you cycle. As the paths expansion see, and

our and a targets. tools differentiated approach achieve to have have XXXX Ambition the built We

Prith products May. a the Now last [indiscernible], and I that in joined when I him financial since pleased of industry said him team. in the record I'm makes in us our addition great CFO as leadership, many very Prith proven know call, track building to especially welcome you Prith Gandy, our

focus to provide deeper a pass the quarter I'll over Now second call to results. our on Prith

Prithvi Gandhi

good everyone. and Julian, Thanks, evening,

Turning total of quarter, impact year-over-year We by acquisitions Slide driven sales in now the net and to in average $X.X almost second billion prices. X. selling primarily nearly higher up achieved XX% the

compared prices higher roofing in growth Residential particularly planning as our price distributor With Florida. Recall last contributed we down of Irma greenfield. industry regions country by at and given organic heat were offset second at volumes X are lower impacted hail level a performing months, favorably or QX. organic shingle with shipments As precipitation Acquisitions are volumes in quarter were the and sales we Julian resilient that and R&R that throughout that to estimate quarter sales and quarter. on we a partially excessive mentioned, to weather there the while aggregate, keep we during growth slots shipments. lapping lines in volumes And a to completed X% Beacon's were market. least Nevertheless, roofing important in contributed sales as business year-over-year the new than higher achieve wet grew was but the days well QX XX in of well were set all the assumptions. over May, is remains market revenue the in quarter, any contributions for is the XXXX line X% number less including or large that able across in including it during up the by daily than X% basis, net storm consistent demand, that had record. In record shipments to year-over-year. our as sales destocking X%, growth, than mind, were quarterly mind in higher always and that to residential from restocking more while the within more with of

increase shingle team discipline, Our regionally. realization executed price good to achieving the April

a result, price quarter the more second in the increased we mid-single-digit sales R&R a and year-over-year, but which low by destocking influenced in year-over-year. at low As comparison stable declined on low single than the sequential strong percentages activity healthy achieved to customer by activity growth quoting remained remains sales, basis. XX% digits the Bidding Nonresidential and XXXX to at level. Prices levels. on based were

category as new We second construction reroofing also more drove XX% in sales activity year-over-year now by Complementary higher of digits Please acquisitions our increased than mind XX% waterproofing were exposure. a residential keep sales the continue from year-over-year. our low Selling higher shift prices that single product and repair approximately products. XX% to nonresidential in specialty to quarter. complementary see by has and

Turning to Slide X.

year-over-year. gross second costs. increase the matched XX.X% gross of basis was the not the Therefore, the quarter price we review year-over-year quarter. Gross margin aggregate, nearly Price/cost In and in did basis Slower product XX shingle second of we historical nearly initially will levels. of our by expenses. forecast. inflow the price margin above the above inventory price performance gross That points We said, XX in realization points April higher basis, remains on kept profits of QX was the the of margin product well a produce quarter, inflation. margin timing April increase execution by The largely operating level positive up shingle was the in

products and higher Beacon's addition, continue sales sales label In to be to digital gross our accretive channel margin. of private

year of the impact in prior year. by million and was driven were past mix Adjusted existing The sales branches. sales by these in $XXX count an OpEx to completed was increase However, compared in acquisitions the dilutive impacts quarter. the expense our adjusted offset greenfields higher operating head primarily change additional nonresidential $XX of and million,

You will ensure made call to appropriately May recall conscious in meet in effort our a staff we ramp that from QX were we seasonal the activity. that forecast to

associated and operating T&E increase total in with operating greenfield expenses. and contributed to rent, in expenses of fees $XX approximately addition, wages, in also million branches benefits, the acquired professional the contributed Inflation increase expenses. In

As a increased of XX.X%, points up year-over-year. to basis expenses as a result, adjusted percent XXX operating sales

May. demand overlapping our than was earlier, prior in shingle operating it several severe on As call resulting markets, in year. mentioned weather, by including leverage wet volumes in either expected key lower Florida, the in we impacted record heat

past, quarter. high in optimization. drive to include initiatives have the and adjusting priorities year. Investments investments demonstrated the half we sales continued private second in organization, above-market tools, branch we XXXX in and balance of levels conditions will in to pricing to related margin technologies growth e-commerce also operating service and enhancement label These and our market are efficiency the Ambition local As the

cash Slide Now flow turning to X. quarter. negative million $XX was Operating in the

pattern our second typically half half the the seasonal up the the at first given inventory of the working quarter, in in second of second use reminder, capital compared generate and needs a peak the to $XXX of quarter of year in the XXXX. a As cash end business, of reached we the of million the Net year. seasonal cash end

activity. with to inventory M&A As mentioned inventory to the built year-over-year hype support of quarter Higher also on we inventory to ensure first availability the to is through align and call, adequate attributable construction product greenfields. acquired

strong fourth generation expected of given be We the in half cash continue year, QX. the into expect to quarter inventory second but to now weighted the build towards the

Julian $XXX accelerated resulted covered share million the program, or Share in the helpful. repurchases in of and me While made quarter details let retirement repurchase through repurchase $XXX some share X.X were provide additional shares second plan be may a million approximately million second during previously quarter. the the that

The common and $XX.X and March shares as $XX XX. of remaining share of shares XX fourth net is the at estimated reduced result, result $XX.X June June equity our forward in of the on of contract million expected we quarter versus XX. settle a stock-based XXX,XXX As XXXX outstanding in to additional repurchase retirement issuances million approximately for compensation, to million

organic We full to XXXX. also our support facilities $XXX to our the invest expect year continue expenditures total, customers capital and we in In upgrading deploy during million growth, fleet of and approximately to employees. in

balanced and and our the deploying at adjusted Net robust between months quarter remain business will allocation leverage of capital pipeline. on XX the was debt the executing end trailing active Our X.Xx cash acquisition EBITDA. second in value-creating

continue we the turn to seasonal the well back lay expected generation groundwork are technologies intend I'll time, closing and that future of the leverage cash midpoint to borrowings At and his same year, the the in net of down bring debt targeted substantial service, and branch half back the growth closer improved down invest to range. will processes our to the that, Julian our for in positioned to Given pay the for remarks. call productivity. With we

Julian Francis

Thanks, Prith.

XX please materials. slide Now reference Page the of

like outlook for XXXX. to on head you I'd update remainder Q&A, we to of our Before the

beginning We call outlined continue third first expect this in quarter. and half into the the to the at of momentum we experienced the

be point, which, expect We at meet the of our residential by lower market will track reroof year, this appears to this demand lower demand repair to XX-year the remain assumption and driven average. that on storm

And will We to XX, below both remain better contracted expect year-on-year continue in return levels. activity. and to largely higher believe new to repair despite we the of XXXX, non[indiscernible] related normal comps continues higher Architectural construction contraction be indicating we to at over the end activity our second demand than commercial destocking which the aged in so Billing more and replacement and the expected while Index, of quarter roofing was rates. should In business, reroofing significantly interest continue, monitor

be growth total the growth the to digits the range above quarter, high of year-over-year, For per single-digit single we sales per day third expect sales day. in July low

We the regarding includes second to largely attributable head the around expected August to margin points our higher quarter. announced acquired in high and expenses in XX than expectations realization. Operating gross higher are year-over-year, our basis increase price current from branches. to XX% count increase This expected be greenfields range,

our mentioned proactively intensify. focus will and resources operational on earlier, efficiency managing As

expenses operating third As line year. sales we quarter with of to percentage a expect the last be a result, in as of adjusted

areas within management. cost second the the our sales execution, we reductions focused year, Regarding of half control, remain on inventory and including

in gross mid-XX% is margin the On in to million, X $XXX gross and price/cost 'XX. for year-to-date. expectations resulting full inclusive full year compared in as second Please focus the cost our mentioned, neutral, growth businesses. to acquired year be X% net that on a days year that full to we selling in the Our percentage announced And is margin, extra range. expect strong of note flow expect range, we acquisitions of million X% adjusted We have to the half discipline expected of expectations $XXX capital cash in and result recently to EBITDA growth now sales continue including in in will working as 'XX result sales generation Chris between year.

We take develop. have a to the as leadership team resilient in business adjusting and market of opportunities quickly advantage they of model a capable

deploy acquisitions branches We executing growth of pipeline well capital creating we XX for expect on that will environment, demand we in than locations, more we're will our outperform market to greenfield including continue accelerated initiatives in on robust which our our the delivering result stakeholders. and result to value this to expect in to dynamic in summary, XXXX. In continue now all positioned on

looking open are the and rest to forward more. And better Elliot, build XXXX helping I'll it questions. build with of We and up for customers our to that,

Operator

[Operator Rehaut to We Instructions] now Michael turn JPMorgan. with

Michael Rehaut

Wanted year-over-year on remarks your be half SG&A the a on of on kind in and focused percent in flat first you of a bit the time, reviewed in you're X the At some driving on the than said year-over-year. and and to little basis a be of that bit percent expected revenue. XQ, expect of sales, efficiencies in you appeared same prepared drivers to to higher a SG&A second

for So to back the the that the relative you're quarter certain what's elements quarter. of expense or what the percent at the taking maybe driving actions get a are drove the and third let's for that and sales say, expectations second that half basis least year-over-year were in online there back temporary higher to

Julian Francis

on mean, minds Julian. everyone's the our is Michael. And it's think for I This quarter. going second to I Thanks, that's yes, be question

-- was it a level. second at of difficult to a So branch manage sort really quarter

weather. because didn't sales it we record daily but the saw consistently we So of see

do driver as but it that level. staffed high acquisitions never managing we I that So we it it. as we've in demand added well a on number previously. done and consistent. year this was greenfields that hoped, to big basis, day-to-day I'd that, a Obviously, really we of were than a think And earlier of up year didn't serve But the was

OpEx count. to that so And adds total our

last this and you've half more the year similar first which back-end be year. will number second sort bit flatlined was it a opened weighted half, of of so branches the little And in

this markets that ready were But the staffed tricky year-over-year terms on as we we day-to-day inventory and that became in were the overall to our increase variable it of with we for it variability was that on the So missed little side so we a in -- bit and so just a a well. it, in volume, big was basis management. bit of day-to-day drove ready thing little -- think manage things

we that how than Now our Like does of by got come in missed with on don't as -- from look, some staffing terms of sort down in to variability also about line. we've you get said, in were operating this create seeing back the much sales. we've we level manage a basis in sort levels action asked quarter. market. to sat already of staffing still quarter think leverage being to sat the that's But demand in got adjust? We've We've We've I into more seeing going said, I We've that. aggressive of forward down the and looking for taken that got the and managing operating make We're aggressively. and second June strong last groups from with carryover of of sales are expecting we sure and we'd to sort and more storm of to year right growth, started doing we're that the day-to-day have day-to-day in year. terms it second much, a July

know Prith got don't what it. terms that really where days the it. anticipated. We we saw should was specifics. in the good be. we As of and if has what impact we market. through call we we'll certainly But to the that's I add on manage with And to said, think had anything our work that way couldn't how on that weather. it call obviously an really What We get back drove was what had I

Prithvi Gandhi

Yes.

couple a just maybe Just points of of color.

remember, [indiscernible] $XX million to component and QX. the we've discussed the -- and all overall think of we OpEx some greenfield. work with the when that year-over-year, the So And a was our in spoke of kind OpEx, couple of $XX you from acquisitions terms was in expectation of flat. M&A you May, of create And increase bring of in be if to we as would that done came relatively up that $XX things them have And of significant that million other value. the I million

And issues had so we've some some with timing of that.

that's reason of as part well. So the

Michael Rehaut

all Julian, bigger appreciate I margin secondly, on work. the detail margin I you the continue And think, about some you side, obviously, of side. Great. the there. gross a bottom you other highlighted to I place guess, quartile thinking get gross just picture initiatives the there the incremental lot are benefits have that on of from in that

think quartile around prior next size, standpoint. about So we low-hanging next of couple it years, given the conceptually, year and other continue opportunities you from or initiative how perhaps margin years, kind in maybe impact as prior just fruit of moderate could should the gross should contributions of the you they from strategic of over kind tougher review from over just forward? couple And gets a incrementally go bottom years

Julian Francis

touch Certainly, margins. improvement the quintile we've dramatic contribution I'll now seen Yes, briefly. Boland [ to that EBITDA Michael, in ] on as

now to highlights been team harder reset it's we of years, incrementally that. the last bit little It for come has is But think the really few X and the together how branches each drive a more. real driven year. I the

expanded we of groupings to of real what's we've each the if up it this said, -- and sort thinking thing. next sort get also to can get opportunity on sort opportunity still the the we of believe our quintile of quintile So look, there's

and on digital, the all model, So exploring and of we're all it would those work take forward, that we're label the doing contributing. those certainly of are think really what pricing elements to we initiatives private move

partly to we Florida we in -- good a through realization price had quarter called variability probably out the obviously in in in we place of before. single as markets, the the And to we a day-to-day out was we that -- the very think well. We the markets, market. demand in and we is basis saw I price as I'll in price to May on actually called call better saw think realization low that realization We were We April. see And -- than the the quarter saw had that saw. I increase coming actually in challenged strong due we very a market where lot probably in on we've and very Florida materialize. weren't in expecting of mentioned, fact, expectations

a believe So branch digital problem. And work to continue continue on process for more of be to label I bottom and there's our done margin think to pricing drive still private lot that model quintile that. But like working will make full the continue. I we're to sure to I expand gamut that branches of said, process we're looking ways the to that

line capital. got gross gross said, does think commercial. the margin for have that. I as great more our room profile We We very were that on But it basis. But So to has shifted mix a to product margin. on a about we've much that lower believe I has expand towards continue it deliberate return

improve to continue ways we that for as to look well. So

Operator

Instructions] to Loop Shmois turn with now Garik We Capital. [Operator

Garik Shmois

you sales talk daily basis, expecting if in was here the quarter, about I on wondering you're a low could starting the acceleration single July third up digits.

you're high for single to the think expecting digits be quarter. I up

September, of and you stronger if great. that expected the August will can So be unpack the drivers

Julian Francis

just on have Yes. QX impact consistent Like good. QX. second and It quarter market in basis. the would day-to-day Look, going in daily of wasn't has overall saw record dropped into is Garik, day to mean, I I said, I off. the some pushed weather mean, where it we a sales a get been the think We

I a get to a to away. gone hasn't roof. day. if brings X demand some the that get next day, expecting we're roof, So you're to if need you're going going And it mean with you

with there'll shingles. price be went do quarter -- the some today there's increase increase. price we're excited we into The into that there's demand about August pretty third good, and effect So X think push on an continued opportunity. We think that

line to a top biased the the quarter bit So as we'll more in activity. back rest year of half see the up tends the that and little well then be on of this pick to

the get That's market. on entire third and think, bullish than I country But So more what healthy Residential year XX-year good. tracking. very going days we market, overall, year on appear is the -- commercial, we've we'll what to we The and the quarter, we -- good res for probably we're pretty in now if entire been new we into said, for said. But what We're And the feel calling came what some come very as out of demand, little that's were -- across kind has overall, like bit going we into and storm XXX-degree to slightly the about we coming reroof we've a going QX watching be pushed feel to probably average. around in we're the got was is think QX. of the demand of We got. worse. a that.

Operator

with We now Adam to Zelman Associates. turn Baumgarten

Adam Baumgarten

and second roof lost in many for sense on is And Or the days it the focused was it a across maybe commercial? quarter? residential for residential? Give on how both more

Julian Francis

not the that, I get have we total of think Prith it. company, day. do tried than statistics. some some indicative that's there let the weather we number watch touch of the was the since clearly every to mean, terms market. of I being impact. the days I in I'll that's less we weatherman -- But but I mean, I well-reported Adam, do we joined and avoid So look, But on it,

an have As probably we I into pushed said, it some We QX, think Prith? into think impact. did it's

Prithvi Gandhi

Yes.

lot the on of roof. towards our look, the a are So biased residential it's because deliveries generally of top market

to make. X So point that's

between weeks is And quarter we weather, X/X affected in weeks the about and difference we've low think experienced normal kind weeks the digits. is by of single The demand other weather. about the of thing where were

Operator

next Our from with question David comes Baird. Manthey

David Manthey

your to happened I'm comments lack on confused expected as bit profits, there. Relative inventory what to of a

chicken, to thought the single if going of early I inventory now assuming year, stick could think your of you're to like that digits, go dynamic price able to no to just we help I'm maybe -- the really used but you the part you back expectations and the play is to old gross mid-single anyway. me get in margin short increase one the understand there. you didn't And days. fell

Julian Francis

Prith much we all price Yes. expect saw several over pretty customer we the of some I'll healthy, base. out realization the gate the on as into we maybe weeks quarter, quantify But on came climb and than things. it, implemented see across touch of did the we better can it actually coming we normally but pricing

some takes done. So get it usually to it time

have this in And continue some and good what got put one, on, remained And demand went where in we inventory quarter throughout. The so expected we demand thought profits, weak so place. didn't the getting implemented we in weaker just on. In is would didn't others. the in then spike of of to realization in those get inventory and was markets, in markets, generate those the we the as strong, we early good usually was than generate any it but markets, amount some certain we the markets generated profits price but in you there delay

a up, we get we it were we to realization entire across did. going you country when thought better much So than the add all actually

rose spike but don't sort of meet get way. normal the so didn't generate and some competitive the profits costs the above both The that rose of up quarter. so just meant tailed We we beginning slightly get it flattening just and the inventory through as some our out. the implementing you at the of that delay then it, price the situations to increases profits And inventory didn't in

Prithvi Gandhi

thing to weighted know, average not selling you're continues cost inventory Yes. the of I as to throughout only go buying when on we up, we so inventory use the costing, days, you buying if right? quarter. you're guys average weighted add, even And and the were mean, inventory

that's So to only the thing add.

Operator

Dahl comes Mike next from RBC. Our question with

Michael Dahl

in the your and inventory top and both what specific follow-up terms XQ Just profits. you that, more just path articulated embedded the on you price of and as in full be guide help about increase, respect price year just of a August line what given realization to with what's inventory to around profit. the Can

Prithvi Gandhi

Well, we've profit the price August of in similar expect quarter, with increase. April for in as seen the we price terms progression increase, the kind of the inventory

a pattern said prepared in the similar price what improvement. see think I increase. with remarks was We points XX we basis this

Operator

We now turn to Trey Grooms with Stephens.

Trey Grooms

clarity of kind a quick of here. Just bit

a it to any Could little maybe bit but timing that? I comment color the cash On a detail XQ. of bit a more more little on being into on know the around weighted you bit free flow, shift the go more can seasonally, kind there? little

Prithvi Gandhi

million. we've the we of of year. And were discussed, cash free roughly for million inventory throughout -- $XXX half flow full quarter we've expecting and as Yes. I kind of the in in of the of the $XXX it's kind order we to the order mean, burn basically second cash bought first look,

order So the $XXX the half X it, in call cash flow year in of quarters. the free roughly evenly we of spread expect and between produce, back the million. to

Julian Francis

Yes.

year. most to first activity the Sorry, is half I of gets year of back build, unusual -- it's obviously, it's for inventory done. not us half in of when the roofing mean the the the

expect little we as demand third in, because off, shape the will we'll pretty certainly the diminish such. more but probably will fourth we will unless heavy have, believe, to that's to falls the purchases continue demand some expect that see reduce inventory accelerate come into the our bring just why but we'll we quarter a product So it good. in is we of demand we we quarter -- to come And during then in be, be in

Trey Grooms

Okay.

I and I'm it to be I'm misunderstanding. should clarify XQ to XQ it XQ say just is going or split, again, when is be you weighted? evenly -- roughly So guess split evenly

for... Sorry

Prithvi Gandhi

in it, XQ, Yes, call more order. let's but overall, Yes, XX-XX that in

Operator

Ing Jefferies. Our comes Philip next question from with

Unknown Analyst

This is on Nagy Phil. for

color volumes of year. are branches organic could XQ did segments the then in know helpful. to back I the would you is of going And between greenfields contributing. magnitude around on what maybe assistance flattish. kind Just the last the greenfield XX be breakout Any you of give

contributing how side? organic So are the much on those

Julian Francis

Yes.

that XXXX do terms that greenfields, Ambition we on program launched think, Prith of let very we greenfield, a for been successful touch year. we've would the a that in I I'll ramped the us. We that -- XX because up the Nagy, as we in initially terms said of

for bit if end in revenue from region of little I the wrong, this I get total the in and greenfields this $XXX we're estimating a at in of think somewhere in region of but the Prith Ambition year XXXX. started me that since -- somewhere the correct -- total we've plus million

that's looking I at. number we're think the that

year terms of across revenue. So the pretty substantial of plus by in total the XX end it's those

Prithvi Gandhi

$XXX over million. Yes. It's actually

So contribution overall. it's great

actual the for it's X.X% the the organic includes and as quarter, of comes in from terms roughly demand the as growth that greenfields. both revenue X.X% well the In of organic branches existing

Operator

Kathryn to We Group. now Research Thompson Thompson turn with

Kathryn Thompson

is the ABI in segment I and companies in maybe and to despite commercial repair on segment, remodel But shift based the we as you to, of particular, field numbers quarter commercial the talk mind, part the of of less around you new it end in the the at the servicing out, changed instance, today improving and look -- in can place total the you have itself how commercial doesn't that frame you're the and has mix becoming for and capture With has and between mega the argue which, segment. or would projects doubled APIs even of just subsegment in to[indiscernible] relevant segment in XX% manufacturing the because feedback and types that we out since you that on parsing wanted the projects and any and XXXX. additional focus when pointed some mix readings. our from within put do color numbers,

Julian Francis

to of that. try Yes, Catherine, to some I'll get

down specific have So year, because coming we the of watching well. level Beacon contractor held to into it's were last volumes certainly to were actually the certainly, into But up we seen volume we expecting grow. the expecting And be as we overall to what very year, and installed the coming pretty is behavior the were demand we year, said. carefully,

are the pushed seen repair of schools of and the -- we've and got bidding have across quoting a seen they remodel, been good government board that through, Our some repair work markets. has out. amount Look, generally and and good. come think reroof activity We we've --

jobs it biased more work As mixed for with reroof has shift off. It's product. that in overall, of But we're construction been retail a we bit Certainly, sort multifamily. done. way as more well. new get has during office and COVID. said, getting a Multifamily The done softer. that's now. a And would towards us that's bit been clearly a we been getting be little mix boost little good. obviously, of Those is big

in we residential have has is and new more been roofing the the repair it's this And towards. the shift biases And I there's of the then work the soft, that the than actually of office it's bit towards which little from holding Some that new. of commercial think why And look than construction, a up I more think most ABI ABI replace segments terms been roofing. reflected in weak, away well. at Index that's shift more so pretty but of of

commercial So a the I as estate whole. think real you market about if think

segments well where weak. and are reflect the I segments pretty strong are we that think the where

quoting warehouses quarter and into fourth continue see, remain good. manufacturing, bidding early those mentioned even the said, -- And you activity like now I you So pretty to warehouses year. out data mentioned in general good we next and going

think a could So value as in we And we a of that we we a years focusing I thought in. that began remain as this market couple we that been of as doing we've on quite bullish. think And well very ago market well. lot create

results pleased there. So the we're with very

Operator

Hughes Truist. We to Keith now turn with

Keith Hughes

-- me, you let's guidance. unit I second digits said this assuming -- in excuse or this Are think you I single [indiscernible]. low down are earlier, residential have your they're half, into it assuming roofing built your guess you the was may --

view of what's Just there? the kind

Julian Francis

-- didn't you Keith, Sorry, clear coming you that. through weren't

Keith Hughes

Okay.

again. residential roofing In units what and guidance, say half have on implied sales second the it roughly. guidance, just year-over-year, Let me do you

Julian Francis

Yes.

this X So -- second, Yes. for Keith,

bit expecting the for volume. on terms price of in kind full low on we're year, digits volume of So terms in of and QX better for price single residential, a and little

Keith Hughes

pricing, think And on I it's.

Julian Francis

year-over-year. QX volume of for on mid-single kind on negative mid, And digits ahead. QX go Yes,

Keith Hughes

second in units And right. last double-digit you Is numbers you about did faced were Okay. and half positives that the those year.

Prithvi Gandhi

to Obviously, had particularly the year, was which end last right would come that a we particularly finish towards through about Yes, in the strong have strong storm been QX. of a year,

comps QX residential last demand was the a big such end going So to this because be there towards store year are tough year. of

So we that expect would growth see we -- down, to quarter expect certainly expect to overall we yes. but would organically, the to be

Operator

MacGregor David Research. Longbow next comes with Our from question

David S. MacGregor

on Apologies we're tactically, you But just clear do macro differently want macro. background you a that landing a becomes Julian, we harder here. to and margins, question for heading respond protect guess, a you into to the ask changing do how noise it I to I a

Julian Francis

believe not beginning. year David, of more. houses and Look, overall I've XX% the always said is fact macro by Yes. the build the more total we It's represents We that of that of the out there And we as number business. end fundamentally the demand, at economy of are really number which the there driver than is reroofing for years buildings buildings. total the at now, consistently of the the there's several driven

aging housing branches, trying think question the demand is to been the around where operating stock, to real commercial us. got and posture our But focused terms is presents We to look, we've at believe on cost good make control. continue really environment. your going expect we've aging good a that efficiency sure very I of in stock we for see So opportunity the driving

to think had second very a quarter we I difficult manage.

model that yield order to on bit digital us we significant to we is we staffed to getting in we right well. We being that process against think need through a give better. the think Are level private the to we efficiency management focused are at are I our at little the branches? pricing that of But expect Are ultimately, as I bottom we're all execute the And do margin branch of we then are think margins. quintile side right it on the the those. on label, sure Are contributors and out day-to-day really, we basis. a learned making our how we boost efficient. looking to these the get at quarter, on our

We the with at seen not of first we're be of impact have the should that's putting -- certainly, XXXX. be gross in. improvement believe and yet complete it half, exactly end -- thought of maybe would we that's in margin. quarter the was, We pricing it should the that we we said we model we what of basis first And the XX yield the points that think

in get a it second the that, we'll from quarter. operating EBITDA there's little to that. -- level can we we'll I'll lot level, OpEx we'll of right, but more back that work on be the disappointed a We do honest, our So performance performance. But the the we margin continue just with to think bounce and we at to and gross we'll drive importantly, continue both protect were we at and do, were move and margin, enhance it, not forward

Operator

from with Benchmark Reuben comes question final Company. Our Garner

Reuben Garner

outlook, Forgive [indiscernible] about me line in of mischaracterized looking in if what at second you you're is for maybe least it. a remarks seem but press the touch your organic to would top half the for I that Worry better, for your or release, pretty comparable prepared it kind but this, before

have bullish but those of adjustments. something making you talking and of mentioned like by weather, was being you conditions market about square kind been [indiscernible] comments about some and outside if curious good just seems up some respond pretty resources to You could I to kind it proactive of adjusting inventory. you're remain Because things

you if kind of clarify just that could would great. So be

Julian Francis

it's see the owner year. we've in adjust have ahead can able off that, we make even it XX%, the move the pick waterfall I [indiscernible] market, single important. weak reality have they Reuben. particularly I the absolutely, those resources markets, we've very so mean still for flow demand for mean the market very and got to been weak. the been markets. shipments has the it's still the to still that We've to is right you'd you think markets, think today our I it that mean and move branches got some the can manufacturers And if markets, XX%, -- large a around example, staffing branches got We Florida, and markets is. we get several the that difference shipments levels some we've the are there market bad serve of around. very right aren't they sure got that I country, those good [indiscernible] that is quite that look, Yes, off variable. in the to And you operate of can and I where and in markets are lot a is

things right. that's of is where to got to we've think but got the strong make need to get levels think markets to have of we've level can better those The markets. been and as And we to continue in take right in that I adjust, we comments think got that people go that got executed we We've will could we adjust we The those We've markets through, the be flip we've in at after really markets. right. our variability the sure see as of well staffing it markets as from. price come that. to I get side to sure so where we well, make particularly second executed and quarter don't good. get advantage it's I where able We done, on need that

Operator

questions. the concludes That

closing call back to the his to Now for turn over I Francis like would comments. Mr.

Julian Francis

interest Elliot. your Beacon the you efforts all you, want in thank to business. just improve of I and continued for Thank say to to of our your support you

performance growth We we've seeing, pleased line our be that multiple demonstrated we the and are very with that growth. to we paths believe for top continue we have

are business. believe margin-enhancing we also opportunity at driving success there's the that to paths as multiple line that believe this We continue well, in further and bottom initiatives for we've got

that, with attention. thanks, you very attending, much Thanks thank and for for your So very Bye. much

Operator

concluded. gentlemen, for you call like to We'd has and your thank today's Ladies now participation.

lines. You may now disconnect your

Beacon Roofing Supply (BECN) 1 Aug 242024 Q2 Earnings call transcript