Beacon Roofing Supply, Inc. 8-K Apr. 19, 2021 7:56 AM

Point 2.02

Earnings and financial position

In connection with the proposed refinancing transactions, the Company is providing the information contained in Item 2.02 of this Form 8-K to disclose certain preliminary estimated unaudited operating results for the fiscal quarter ended March 31, 2021 that will be made available to prospective lenders and investors in connection with the proposed refinancing transactions. The information in item 2.02 of this Form 8-K is provided and is not deemed to be “filed” within the meaning of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the obligations of this section and may not may not be incorporated by reference in any filing under the Securities Act or the Exchange Act unless expressly stated by a specific reference in that filing.

Preliminary estimated results for the fiscal quarter ended March 31, 2021

Although our consolidated financial statements as of and for the three months ended March 31, 2021 are not yet complete or available as of the date of this Form 8-K, we are presenting certain preliminary estimated financial information as of the date and for the fiscal year three months ended March 31, 2021. Beginning with the Company’s condensed consolidated financial statements for the three months ended December 31, 2020, the Company has reflected its interior products and insulation business (“Interior Products”), which was sold to Foundation Building Materials Holding Company LLC on February 10, 2021 as a discontinued operation Activities for all periods shown. Accordingly, preliminary estimated results for the fiscal quarter ended March 31, 2021 reflect the company’s interior decoration products business as discontinued operations and, for comparison purposes, reflect net sales, income from continuing operations, and Adjusted EBITDA for the fiscal quarter ended March 31, 2020 reclassified to match the current period representation.

We estimate our net sales for the fiscal quarter ended March 31, 2021 will be between approximately $ 1.31 billion and $ 1.32 billion, up approximately 10% from net sales of $ 1.197 billion for the am Fiscal quarter ending March 31, 2020 is adjusted to reflect our interior decoration business as a discontinued operation). The expected increase in sales compared to the same period of the previous year is primarily due to the strong end-market demand for roof products and the low prices.

Additionally, we estimate that our net income (loss) from continuing operations and Adjusted EBITDA for the quarter ended March 31, 2021 compared to our net income (loss) from continuing operations and Adjusted EBITDA of ($ 121.3) will improve significantly. $ Million, or $ 22.1 million for the quarter ended March 31, 2020 (adjusted to reflect our interior decoration products business as a discontinued operation). The above improvements are primarily due to increased net sales, gross margin expansion and operational leverage, as well as last year’s non-cash amortization expense on intangible assets resulting from our previously disclosed renaming efforts.

Adjusted EBITDA is a non-GAAP measure that is defined as income from continuing operations excluding the effects of interest expense (less interest income), income taxes, depreciation and amortization, the effects of share-based payments, cost and restructuring costs, which are income taxes related to the Revaluation of deferred tax assets and liabilities related to the Company’s application of the CARES Act and costs directly related to the Company’s response to the COVID-19 pandemic. We use Adjusted EBITDA to assess financial performance, analyze underlying trends in our business, and set operational goals

Forecasts used when allocating resources. We believe Adjusted EBITDA is a useful metric as it allows investors to better understand changes in underlying operating performance over the comparative period by providing investors with financial results that are different from certain items that are not current Indicate operational performance, not be influenced. The above measure may differ from similarly titled information from other companies. Accordingly, you should not place undue reliance on such preliminary estimated financial information.

The following table is a reconciliation of our net income from continuing operations to Adjusted EBITDA for the fiscal quarter ended March 31, 2020 (adjusted to reflect our interior products business as discontinued operations):

Three months to March 31

2020

(unchecked in millions)

Result from continuing operations

$

(121.3

)

Net interest expense

35.6

Income tax

(77.9

)

Depreciation

183.3

Share-based payment

4.3

Acquisition costs (1)

(2.9

)

Company restructuring costs (2)

1.0

Adjusted EBITDA

$

22.1

(1)

Acquisition cost represents certain items included in selling, general, and administrative expenses related to acquisitions, including: fees, store integration costs, travel expenses, employee severance and retention costs, and other staff costs.

(2)

Business restructuring costs represent certain items that are included in selling, general and administrative expenses resulting from efforts to streamline workforce and the cost of rebranding.

Our financial close procedures for the fiscal quarter ended March 31, 2021 are still ongoing. The preliminary estimated financial information listed above does not constitute a comprehensive representation of our results of operations or financial position as of or for the quarter ended March 31, 2021 and is based solely on information available to us as of the date of this Form 8 THOUSAND. Our actual earnings and financial position as of and for the fiscal quarter ending March 31, 2021 may deviate from our current expectations and from the information described above, as additional material developments and adjustments may occur between now and the time of the financial statements and other information for this period has been completed, including all information required by generally accepted US accounting principles (“GAAP”). In addition, these preliminary estimates are not necessarily indicative of results for the remainder of fiscal 2021 or any future period. There can be no assurance that these estimates will materialize, and estimates are subject to risks and uncertainties, many of which are beyond our control. The foregoing information is not intended to be used as a substitute for full GAAP financial statements or as a measure of performance. Our preliminary estimated financial information is a forward-looking statement.

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