• Record quarterly net sales driven by execution on Ambition 2025 growth initiatives, including acquisitions and greenfields, and strong residential demand

• Delivered net income of $153.8 million and Adjusted EBITDA of $290.3 million, both at the high end of our previously announced preliminary results

• Substantial operating cash flow generation benefited from seasonally strong collections and continued inventory right-sizing

• Repurchased all outstanding convertible preferred stock in July 2023, reducing underlying common share base by 9.7 million shares

Beacon (Nasdaq: BECN) (the “Company”, “we”, “our”) announced results today for the second quarter ended June 30, 2023.

“Our team’s focused execution on the Ambition 2025 growth initiatives drove record quarterly net sales, strong net income margin and double-digit Adjusted EBITDA margin,” said Julian Francis, Beacon’s President & CEO. “We leveraged an improving residential market and our strategic investments in greenfields and acquisitions, including Coastal Construction Products, to drive top-line growth. I am especially pleased with the growth of our industry-leading digital offering, achieving record adoption by our residential customers. Our relentless customer focus is propelling the team to help our customers build more. Internally, our emphasis on efficiency is also showing tangible results, demonstrated by our impressive operating expense to net sales ratio. We continued to adjust inventory levels to local market conditions and generated substantial cash flow, providing ample capacity to reinvest in the business and return capital to shareholders. To that end, earlier this week we closed on the repurchase of all the outstanding preferred shares, which effectively reduced the common share base of the Company by nearly 9.7 million shares. I am very happy with the achievements this year and look forward to building on the momentum to continue to create value for all our stakeholders.”

Second Quarter Financial Highlights

Second Quarter

Net sales increased 6.2% compared to the prior year to $2.50 billion, a Company record for quarterly net sales. Second quarter sales increased compared to the prior year period driven by higher prices and the contributions of acquired and newly opened branches over the last four quarters. Weighted-average selling price increased approximately 2-3%, while estimated organic volumes decreased approximately 0-1%.

Residential roofing product sales increased 8.5%, non-residential roofing product sales decreased 1.7%, and complementary product sales increased 11.6% compared to the prior year. The increase in complementary product sales was largely due to the November 2022 acquisition of Coastal Construction Products. The three-month periods ending June 30, 2023 and 2022 each had 64 business days.

Gross margin decreased to 25.4%, from 27.6% in the prior year, as higher product costs related to the inventory profit roll-off more than offset higher average selling prices for our products. The increases in operating expense and Adjusted Operating Expense were largely from acquired branches and greenfields. Excluding these impacts, operating expense from existing branches decreased by approximately 5.4%, or $21.3 million. The comparative decrease was related to a decrease in payroll and benefits costs, primarily due to lower incentive compensation, and decreases in selling, general and administrative expenses. On a consolidated basis, both operating expense as a percent of sales and Adjusted Operating Expense as a percent of sales were comparatively lower in the second quarter of 2023, driven by the higher sales combined with cost management.

Net income (loss) was $153.8 million, compared to $174.5 million in the prior year. Adjusted EBITDA was $290.3 million, compared to $307.7 million in the prior year. EPS was $1.97, compared to $2.12 in the prior year. Second quarter results compared to the prior year period were impacted by the lower gross margin and higher operating expenses as described above.

In February 2023, Beacon announced an increase in its share repurchase program, pursuant to which the Company may purchase up to $500 million of its common stock (inclusive of the $112 million remaining authorization under the program announced in February 2022). In the second quarter of 2023, the Company repurchased and retired $51.6 million of its common stock on the open market through Rule 10b5-1 repurchase plans. As a result, there were 63.4 million shares of common stock outstanding as of June 30, 2023. Following the end of the second quarter, the Company repurchased an additional $25.1 million of its common stock under the same plan and announced that it does not expect additional repurchases during the remainder of the year under the existing share repurchase authorization.

Year-to-Date

Net sales increased 4.7% (3.9% on a per-day basis) compared to the prior year to $4.24 billion, a Company record for net sales for the first half. 2023 net sales increased compared to the prior year period, largely driven by the successful implementation of price increases and the contributions of acquired and newly opened branches over the last four quarters. Weighted-average selling price increased approximately 5-6%, while estimated organic volumes decreased approximately 4-5% (5-6% on a per-day basis).

Residential roofing product sales increased 5.2% (4.3% on a per-day basis), non-residential roofing product sales decreased 4.2% (5.0% on a per-day basis), and complementary product sales increased 16.2% (15.3% on a per-day basis) compared to the prior year. The increase in complementary product sales was largely due to the November 2022 acquisition of Coastal Construction Products. The six-month periods ending June 30, 2023 and 2022 had 128 and 127 business days, respectively.

Gross margin decreased to 25.5%, from 26.9% in the prior year, as higher product costs related to the inventory profit roll-off more than offset higher average selling prices for our products. The increases in operating expense and Adjusted Operating Expense were largely from acquired branches and greenfields. Excluding these impacts, operating expense from existing branches decreased by approximately 1.8%, or $13.3 million. The comparative decrease was related to a decrease in payroll and benefits costs, primarily due to lower incentive compensation, and a decrease in amortization expense. On a consolidated basis, both operating expense as a percent of sales and Adjusted Operating Expense as a percent of sales were slightly higher in 2023, driven by increases in payroll and benefits costs related to additional headcount to support new and acquired branches as well as future growth initiatives. Inflation and higher selling, general and administrative expenses also contributed to the increase.

Net income (loss) was $178.6 million, compared to $230.3 million in the prior year. Adjusted EBITDA was $403.4 million, compared to $447.2 million in the prior year. EPS was $2.22, compared to $2.72 in the prior year. Results in the first half compared to the prior year period were largely driven by the decrease in gross margins and higher operating expenses described above.

In the first half of 2023, the Company repurchased and retired $74.8 million of its common stock on the open market through Rule 10b5-1 repurchase plans. As a result, shares of common stock outstanding decreased, net of issuance, to 63.4 million as of June 30, 2023, from 64.2 million as of December 31, 2022.

To calculate approximate weighted average selling price and product cost changes, we review organic U.S. warehouse sales of the same items sold regionally period over period and normalize the data for non-representative outliers. To calculate estimated volumes, we subtract the change in weighted average selling price, as described above, from the total changes in sales, excluding acquisitions and dispositions. As a result, and especially in high inflationary periods, the weighted average selling price and estimated volume changes may not be directly comparable to changes reported in prior periods.

Please see the included financial tables for a reconciliation of “Adjusted” non-GAAP financial measures to the most directly comparable GAAP financial measure, as well as further detail on the components driving the net changes over the comparative periods.

Earnings Call

The Company will host a conference call and webcast today at 5:00 p.m. ET to discuss these results. Details for the earnings release event are as follows:

Upon registration, participants will receive an email containing event details and unique access codes. To ensure timely access, participants should register for the earnings call at least 10 minutes before the 5:00 p.m. ET start time. An archived copy of the webcast will be available on the Events & Presentations page shortly after the call.

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. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “believe,” “will likely result,” “outlook,” “project” and other words and expressions of similar meaning. Investors are cautioned not to place undue reliance on forward-looking statements. 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 Form 10-K for the fiscal year ended December 31, 2022 and subsequent filings with the U.S. Securities and Exchange Commission. The Company may not succeed in addressing these and other risks. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. 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

Founded in 1928, Beacon is a Fortune 500, publicly traded distributor of building products, including roofing materials and complementary products, such as siding and waterproofing. The Company operates over 500 branches throughout all 50 states in the U.S. and 6 provinces in Canada. Beacon serves an extensive base of nearly 100,000 customers, utilizing its vast branch network and diverse service offerings to provide high-quality products and support throughout the entire business lifecycle. Beacon offers its own private label brand, TRI-BUILT®, and has a proprietary digital account management suite, Beacon PRO+, which allows customers to manage their businesses online. Beacon’s stock is traded on the Nasdaq Global Select Market under the ticker symbol BECN. To learn more about Beacon, please visit https://www.becn.com/.

BEACON ROOFING SUPPLY, INC.

Non-GAAP Financial Measures

(Unaudited; in millions)

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, we prepare certain financial measures that are not calculated in accordance with GAAP, specifically:

• Adjusted Operating Expense. We define Adjusted Operating Expense as operating expense, excluding the impact of the adjusting items (as described below).

• Adjusted Net Income (Loss). We define Adjusted Net Income (Loss) as net income (loss), excluding the impact of the adjusting items (as described below).

• Adjusted EBITDA. We define Adjusted EBITDA as net income (loss), excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, and the adjusting items (as described below).

We use these supplemental non-GAAP measures to evaluate financial performance, analyze the underlying trends in our business and establish operational goals and forecasts that are used when allocating resources. We expect to compute our non-GAAP financial measures consistently using the same methods each period.

We believe these non-GAAP measures are useful measures because they permit investors to better understand changes over comparative periods by providing financial results that are unaffected by certain items that are not indicative of ongoing operating performance.

While we believe that these non-GAAP measures are useful to investors when evaluating our business, they are not prepared and presented in accordance with GAAP, and therefore should be considered supplemental in nature. These non-GAAP measures should not be considered in isolation or as a substitute for other financial performance measures presented in accordance with GAAP. These non-GAAP financial measures may have material limitations including, but not limited to, the exclusion of certain costs without a corresponding reduction of net income for the income generated by the assets to which the excluded costs relate. In addition, these non-GAAP financial measures may differ from similarly titled measures presented by other companies.

BEACON ROOFING SUPPLY, INC.

Non-GAAP Financial Measures (continued)

(Unaudited; in millions)

Adjusting Items to Non-GAAP Financial Measures

The impact of the following expense (income) items is excluded from each of our non-GAAP measures (the “adjusting items”):

• Acquisition costs. Represent certain costs related to historical acquisitions, including: amortization of intangible assets; professional fees, branch integration expenses, travel expenses, employee severance and retention costs, and other personnel expenses classified as selling, general and administrative; gains/losses related to changes in fair value of contingent consideration or holdback liabilities; and amortization of debt issuance costs. Acquisition costs are impacted by the timing and size of the acquisitions. We exclude acquisition costs from our non-GAAP financial measures to provide a useful comparison of our operating results to prior periods and to our peer companies because such amounts vary significantly based on the magnitude of the acquisition and do not reflect our core operations.

• Restructuring costs. Represent costs stemming from headcount rationalization efforts and certain rebranding costs; impact of divestitures; costs related to changing our fiscal year end; amortization of debt issuance costs; debt refinancing and extinguishment costs; and abandoned lease costs. We exclude restructuring costs from our non-GAAP financial measures, as such items vary significantly based on the magnitude of the restructuring activity and also do not reflect expected future operating expenses. Additionally, these costs do not necessarily provide meaningful insight into the current or past core operations of our business.

• COVID-19 impacts. Represent costs directly related to the COVID-19 pandemic. Beginning January 1, 2023, the Company determined COVID-19 impacts should no longer be considered an adjusting item. This change was applied prospectively.

The following table presents the impact and respective location of the adjusting items on our consolidated statements of operations for each of the periods indicated:

BEACON ROOFING SUPPLY, INC.

Non-GAAP Financial Measures (continued)

(Unaudited; in millions)

Adjusted Operating Expense

The following table presents a reconciliation of operating expense, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Operating Expense for each of the periods indicated:

Adjusted Net Income (Loss)

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Net Income (Loss) for each of the periods indicated:

BEACON ROOFING SUPPLY, INC.

Non-GAAP Financial Measures (continued)

(Unaudited; in millions)

Adjusted EBITDA

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated:

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