Growth at roofing and building products distributor Beacon was driven predominantly by acquired and newly-opened branches, according to its Aug. 1 2Q24 financial report.

The Herndon, VA-based company posted 2Q net sales of $2.67 billion, a 6.8% increase year-over-year driven by price execution and contributions of acquired and newly-opened branches. Contributors to the increase in 2Q net sales were organic volumes (including greenfield locations) which increased approximately 2-3% and 0-1%, respectively and acquired branches, up more than 4%.

Beacon said that since the end of the first quarter, it acquired 21 branches and opened 10 greenfields.

By Product Segment in 2Q

• Residential roofing products sales increased by 2.4%. The increase in residential roofing products was primarily due to price execution.
• Non-residential roofing product sales increased by 11.1%. The increase was primarily due to higher volumes driven by strong underlying market demand, and the impact of customer destocking.
• Complementary product sales increased by 12.3%. The increase was due to the acquisition of additional waterproofing companies since June 30, 2023, offset by lower volumes.

Gross margin increased to 25.6%, from 25.4% in the prior year, as higher average selling prices for the company’s products offset the higher product costs and higher non-residential product mix.

Net profit was $127.2 million, compared to $153.8 million in the prior year. Adjusted EBITDA was $279.4 million, compared to $290.3 million in the prior year.

“Our Ambition 2025 initiatives drove record quarterly net sales, solid net income margin, and double-digit Adjusted EBITDA margin,” Beacon’s President & CEO Julian Francis said the company’s financial release. “Our team’s strong execution delivered organic sales growth across all three business lines despite disruptive weather events that reduced the number of roofing days in the quarter. As a result, we experienced lower-than-expected residential volumes and decreased operating leverage as we maintained staffing to meet a higher level of activity.”

2024 Outlook

Beacon updated its full-year outlook as follows:

• Net sales growth of 6-8% year-over-year, split between organic growth and M&A
• Gross margin expected between the mid-25% range, offset by higher non-res mix
• Adjusted EBITDA of $930-$970 million

The company repurchased and retired $180 million of its common stock under ASR, after it entered into an agreement to repurchase $225 million of its common stock on May 9.

In July, the company acquired Roofers Mart of SoCal and added Smart Order, a digital tool that provides contractors with fast and accurate ordering, to its eCommerce platform.

Beacon was No. 5 on MDM’s List of Top Distributors for Building Materials/Construction.