Market Overview

Beacon Roofing Supply Reports Fourth Quarter and Fiscal Year 2017 Results

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  • Record fourth quarter net sales of $1.3 billion (9.8% growth
    year-over-year)
  • Fourth quarter EPS of $0.73 ($0.93 Adjusted) vs. $0.78 ($0.88
    Adjusted) in the prior year
  • Record full fiscal year net sales of $4.4 billion (6.0% growth
    year-over-year)
  • Fiscal year EPS of $1.67 ($2.18 Adjusted) vs. $1.49 ($2.10
    Adjusted) in the prior year
  • Completed five acquisitions totaling 23 branches and opened 4
    greenfield locations in fiscal year 2017
  • On August 24, announced agreement to acquire 208 branch Allied
    Building Products for $2.6 billion with anticipated January 2, 2018
    closing

Beacon Roofing Supply, Inc. (NASDAQ:BECN) announced results today for
its fourth quarter and fiscal year ended September 30, 2017 ("2017" or
"Fiscal 2017").

Paul Isabella, the Company's President and Chief Executive Officer,
stated: "Fiscal 2017 produced a second consecutive year of record sales,
Adjusted EBITDA and Adjusted EPS. In addition, we saw robust operating
cash flow generation of approximately $315 million, which is almost a
threefold improvement over the prior year. We are pleased with our
fourth quarter performance, and even more excited about the future, as
monthly sales trends accelerated throughout the quarter and early 2018
visibility is supported by solid re-roofing trends and two meaningful
storm events. Our residential roofing product line posted its 14th
consecutive quarter of sales growth and remained our strongest
performing sector. Overall sales growth was very balanced among our
three categories as commercial roofing produced positive growth with a
mid-single digit increase. Our complementary product line also posted a
7.3% daily sales increase, the result of Beacon's targeted efforts and
solid underlying end market trends. Our 2017 gross margin percentage
finished above robust 2016 levels and represented our best annual
performance as a public company ever. Adding to our great financial
performance in 2017 was our August 24th announcement of the
Allied Building Products acquisition, which remains on track to close on
schedule on January 2nd. The addition of Allied will enable
Beacon to reach new heights in 2018, delivering new products and better
service to our customers, stronger results for our shareholders and
greater career opportunities for our employees. These are exciting times
at Beacon, as our industry outlook remains positive and Beacon's
position to achieve profitable growth is stronger than ever."

Fourth Quarter

Total sales increased 9.8% to a fourth quarter record of $1.29 billion
in 2017, from $1.17 billion in 2016. Residential roofing product sales
increased 9.3%, non-residential roofing product sales increased 5.3%,
and complementary product sales increased 20.7% over the prior year.
Existing markets same day sales, excluding acquisitions, increased 8.2%
for the quarter. The fourth quarter of fiscal years 2017 and 2016 had 63
and 64 business days, respectively.

Net income for the fourth quarter was $45.1 million, compared to $47.4
million in 2016. Fourth quarter EPS was $0.73, compared to $0.78 in
2016. Adjusted Net Income (Loss), after removing the impact of
non-recurring costs related to acquisitions and certain incremental
amortization of intangibles related to the RSG acquisition, was $57.8
million in the fourth quarter 2017, compared to $53.6 million in 2016.
Fourth quarter Adjusted EPS was $0.93, compared to $0.88 in 2016. (See
included financial tables for a reconciliation of "Adjusted" financial
measures to the most directly comparable GAAP financial measures).
Fourth quarter results were positively impacted by strong net sales
growth within each of our three product lines. Compared to the prior
year, fiscal year 2017 operating performance was negatively impacted by
lower gross margins and higher operating costs.

Fiscal Year

Total sales increased 6.0% to an annual record of $4.38 billion in 2017,
from $4.13 billion in 2016. Residential roofing product sales increased
8.7%, non-residential roofing product sales decreased 4.4%, and
complementary product sales increased 19.5% over the prior year.
Existing market same day sales, excluding acquisitions, increased 3.4%
year to date. Fiscal years 2017 and 2016 had 252 and 254 business days,
respectively.

Net income for the full-year was $100.9 million, compared to $89.9
million in 2016. 2017 EPS was $1.64, compared to $1.49 in 2016. Adjusted
Net Income (Loss), after removing the impact of non-recurring costs
related to acquisitions and certain incremental amortization of
intangibles related to the RSG acquisition, was $133.6 million year to
date, compared to $126.5 million in 2016. 2017 Adjusted EPS was $2.18,
compared to $2.10 in 2016. (See included financial tables for a
reconciliation of "Adjusted" financial measures to the most directly
comparable GAAP financial measures). Compared to the prior year, fiscal
year 2017 results were positively impacted by strong net sales growth
within our residential roofing and complementary product lines,
partially offset by a net sales decrease in our non-residential roofing
product line.

The Company will host a webcast and conference call today at 5:00 p.m.
ET to discuss these results. The webcast link and call-in details are as
follows:

         
What: Beacon Roofing Supply Fourth Quarter and Fiscal Year 2017 Earnings
Results Webcast and Conference Call
 
When Monday, November 20, 2017
 
Time: 5:00 p.m. ET
 
Webcast:

http://ir.beaconroofingsupply.com/events.cfm
(live and replay)

 
Live Call: 720-634-9063; Conf. ID #6068898
 

To assure timely access, conference call participants should dial in
prior to the 5:00 p.m. start time.

Forward-Looking Statements:

This release contains information about management's view of the
Company's future expectations, plans and prospects that constitute
forward-looking statements for purposes of the safe harbor provisions
under the Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those indicated by such
forward-looking statements as a result of various important factors,
including, but not limited to, those set forth in the "Risk Factors"
section of the Company's latest Form 10-K. In addition, the
forward-looking statements included in this press release represent the
Company's views as of the date of this press release and these views
could change. However, while the Company may elect to update these
forward-looking statements at some point, the Company specifically
disclaims any obligation to do so, other than as required by federal
securities laws. These forward-looking statements should not be relied
upon as representing the Company's views as of any date subsequent to
the date of this press release.

About Beacon Roofing Supply

Founded in 1928, Beacon Roofing Supply, Inc. is the largest publicly
traded distributor of residential and commercial roofing materials and
complementary building products, operating 382 branches throughout 48
states in the U.S. and 6 provinces in Canada. To learn more about Beacon
and its family of regional brands, please visit www.becn.com.

BECN-F

               

BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Operations

(In thousands, except share and per share amounts)

 
 
    Three Months Ended September 30,     Year Ended September 30,

20171

% of

Net Sales

   

20162

% of

Net Sales

20171

% of

Net Sales

   

20162

% of

Net Sales

Net sales $ 1,289,868 100.0 % $ 1,174,366 100.0 % $ 4,376,670 100.0 % $ 4,127,109 100.0 %
Cost of products sold   967,227 75.0 %   872,324 74.3 %   3,300,731 75.4 %   3,114,040 75.5
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