Beacon Roofing Supply Inc. (BECN) 2020年年度報告「NASDAQ」.pdf

1、2020 ANNUAL REPORTEMPOWERING OUR CUSTOMERS TO1OUR MISSIONEmpowering our customers to build more for their customers,business,community,and family through world-class service and innovative solutions.Beacon is the largest publicly traded distributor of roofing materials and complementary building pro

2、ducts in the United States and Canada.We are among the oldest and most established distributors in the industry,providing high-quality exterior and interior products to the building industry.Our customers rely on us for local access to the building products and services they need to operate their bu

3、sinesses and serve their clients.We offer one of the most extensive assortments of high-quality branded products in the industry,with approximately 160,000 SKUs available across our 500+branch network.We serve over 100,000 customers by promptly providing the products they require,allowing our custom

4、ers to deliver on the project specifications and timelines that are critical to their success.Our business has been resilient in times of economic downturn because of the largely non-discretionary nature of the demand for our products as well as the diversity of both our product offerings and our cu

5、stomer base.We differentiate ourselves by providing our customers with value-added services and expertise.Our e-commerce platforms lead the industry and support the entire business lifecycle,enhancing our customers ability to meet and exceed the needs of their clientele.Our ability to save our custo

6、mers time and money helps to drive customer loyalty while also enabling us to achieve attractive gross profit margins on our product sales.160,000+SKUS500+BRANCHES100,000+CUSTOMERSWe have earned a reputation for providing a high-level of product availability and high-quality customer service,driven

7、mainly by our experienced employees who offer extensive industry knowledge and ensure the timely,accurate,and safe delivery of our products.We utilize a branch-based operating model to maintain local customer relationships,while benefiting from networking branches that are in large markets through o

8、ur On-Time and Complete Network(Beacon OTC)that allows us to serve our customers more efficiently and effectively.Our renewed growth strategy is rooted in our execution of the following key initiatives:1 Leverage our scale and scope to enhance and differentiate our service offering,2 Drive organic g

9、rowth by investing in sales models that benefit our customers,and3 Improve branch operating performance.While we will continue to pursue strategic acquisitions to grow our business,our primary focus is on improving our operations and continuing to identify additional opportunities for organic growth

10、.ANNUAL REPORT 2020OUR PRODUCTSOur product portfolio includes residential and non-residential roofing products as well as complementary building products.Our product lines are designed to meet the requirements of our customers,comprised mainly of contractors that are engaged in new construction or r

11、enovation projects.The products that we distribute are supplied by the industrys leading manufacturers of high-quality roofing materials,siding,insulation,wallboard,acoustical ceilings,waterproofing,windows,doors,decking and related products.Complementary Building Products Vinyl Siding Fiber Cement

12、Siding Wallboard Insulation Acoustic Ceilings Stone Veneer Windows Doors Skylights Waterproofing Gutter and Downspouts Decking and Railing Air Barrier Concrete Restoration Systems Steel Stud FramingResidential Roofing Products Asphalt Shingles Synthetic Slate and Tile Clay Tile Concrete Tile Slate N

13、ail Base Insulation Metal Roofing Felts Synthetic Underlayment Wood Shingles and Shakes Nails and Fasteners Metal Edgings and Flashings Prefabricated Flashings Ridge and Soffit Vents Solar SystemsNon-Residential Roofing Products Single-Ply Roofing Asphalt Metal Modified Bitumen Build-Up Roofing Ceme

14、nts and Coatings Insulation(flat stock/tapered)Commercial Fasteners Metal Edges and Flashings Smoke/Roof Hatches Sheet Metal (copper/aluminum/steel)Roofing Tools PVC Membrane TPO Membrane EPDM Membrane2WWW.BECN.COM LEAD GENERATIONESTABLISHED CREDIBILITYCLOSE OUT THE JOBOUR STRENGTHS3Why pros choose

15、Beacon:Customer engagement that drives customer retention and innovation.Save Time&Build Your BusinessFrom lead to final invoice,Beacon is there helping our customers find projects,land the job,do the work,close it out,and find the next one.Certification Programs Custom Marketing Programs HomeAdviso

16、r Partnership HomeAdvisor Partnership Digital Lead Generation Storm Tracking Professional Estimating Tools with 3D+and Eagleview Homeowner Financing Project Management Beacon PRO+3D+Measure-to-Order TRI-BUILT SAFETY Product Availability Triple Check/Accuracy Regional Service Area Delivery Tracking O

17、nline Bill Pay&Order History Promotion TrackingSELL AND MANAGE THE JOBDELIVERYANNUAL REPORT 2020PURCHASEMATERIALS4WWW.BECN.COMOUR RESULTS2020 was defined by successfully managing through a challenging environment impacted by COVID-19 and the seamless transition to a new leadership team and new strat

18、egic direction.Consolidated net sales decreased 2.3%compared to 2019,a decline primarily reflecting a six-week March-April period when the COVID-19 pandemic was most disruptive.Residential roofing daily sales increased 0.3%,tied to strong fourth quarter growth from attractive housing market fundamen

19、tals.Gross margin improved from 24.4%to 24.5%,influenced mainly by a favorable product mix shift.Adjusted Operating Expense declined compared to 2019,reflecting aggressive second half cost actions.Amid the difficult external environment,Adjusted EBITDA declined only modestly,from$476.0 million in 20

20、19 to$471.6 million.Our 2020 results illustrated our continued focus on operating cash flow generation and debt reduction efforts.In 2020,we designated four strategic initiatives as focus areas for long-term company growth and operational execution:organic growth,digital platform,Beacon OTC Network,

21、and branch operating performance.Organic growth will be supported by higher selling activity and customer contacts from our sales organization,and further expansion of the most complete digital offering within building products distribution.The Beacon OTC Network grew to 58 markets and is raising cu

22、stomer service,while our focus on branch operations produced improved full-year operating performance at the companys lowest quintile performing branches.Net Debt1Operating Cash FlowREDUCED BY YoY GROWTH15%125%$Millions$2,599.2$2,193.8201920201.Defined as gross debt less cash.For FY19,gross debt and

23、 cash as of 9/30/19 were$2.7 billion and$72.3 million,respectively.For FY20,gross debt and cash as of 9/30/20 were$2.8 billion and$624.6 million,respectively.Million$479.32020$212.7Million20195DEAR SHAREHOLDERS&FRIENDSThen entered COVID-19 and our role as an essential business,maintaining customer a

24、ccess to building materials while assuring the health and safety of our employees,customers and communities.Despite these challenges,we could not be prouder of the Beacon employees who allowed us to make substantial strides in a challenging environment.Pandemic-induced construction shutdowns signifi

25、cantly impacted March and April,and non-residential demand was negatively impacted throughout the second half.We implemented a swift yet targeted response,consisting of temporary and permanent cost reductions,aggressive inventory management and proactive borrowings to enhance liquidity and increase

26、financial flexibility.As the COVID-19 construction restrictions eased,overall market demand stabilized.In our end markets,we began to see strength in residential categories,however that was largely offset by the lingering impact of non-residential challenges.Beacon Building Products President and CE

27、O Julian G.FrancisFiscal year 2020 represented an extraordinary period in our companys history.A renewed focus on organic growth and other strategic initiatives coupled with new executive leadership and a major brand consolidation would have been considered a full plate 6Julian G.Francis President a

28、nd CEOPhilip W.Knisely ChairmanOur strategic initiatives made important contributions and were particularly valuable during the pandemic.Our industry leading digital platform reached 10%of total sales by year-end,as contactless sales became an attractive option for customers amid COVID-19.Contractor

29、s are recognizing the value produced by utilizing the full range of our digital solutions,which includes online ordering and estimating tools.Private label product sales grew 50%during fiscal year 2020 and represent an important complement to our digital solutions.Our emphasis on organic growth led

30、to more than 1.3 million customer contacts in 2020,as we increased selling activity,training and support for our sales organization.The Beacon OTC Network expanded to approximately 250 branches and 58 markets across the U.S.and Canada,and we opened our first new hub in the important Denver market.Be

31、acon OTC is helping us raise customer service levels in these markets through improved delivery timetables and product access.Our company will share in these benefits,as we generate more efficient utilization of personnel,fleet,warehouse capacity and inventory.Lastly,in 2020 we targeted our lowest q

32、uintile branches for operating improvement,the results of which produced more than$20 million of year-to-year operating income improvement at these locations.We will expand this program in future years through identification of new target branches and incorporating learned efficiencies across the re

33、mainder of our network.2020 HIGHLIGHTSAdjusted EBITDA MarginSalesOperating Cash Flow$7 Billion$479 Million6.8%During 2020,our Board appointed Phil Knisely as its Chairman,and we named Frank Lonegro as our new Chief Financial Officer.Our entire leadership team is focused on growing sales,expanding ma

34、rgins,generating substantial operating cash and reducing our debt position.We are also committed to expanding our role as an employer that champions diversity,inclusion and equality of opportunity.We are striving to ensure that all of our employees can reach their full potential,which in turn will f

35、urther establish Beacon as an employer of choice and contribute to our long-term success.We are proud that we ended 2020 in a stronger financial,strategic and operational position,despite an unprecedented external backdrop.More importantly,we are just getting started.As always,we sincerely appreciat

36、e support from the investment community as well as our valued customers,suppliers and employees.Our 2020 financial results benefited from the combination of our swift pandemic response and key strategic initiatives.We delivered approximately$7 billion in sales and Adjusted EBITDA margins improved fr

37、om 6.7%in fiscal 2019 to 6.8%,an impressive performance given the environment.These operating results combined with strong working capital management to generate$479 million of operating cash flow.We also reduced our net debt,which continues to be an important focus as we move forward.WWW.BECN.COMUN

38、ITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K?ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES AND EXCHANGE ACT OF 1934For the Fiscal Year Ended September 30,2020?TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the

39、 Transition Period from _ to _Commission File Number 000-50924BEACON ROOFING SUPPLY,INC.(Exact name of registrant as specified in its charter)Delaware36-4173371State or other jurisdiction of incorporation or organizationI.R.S.Employer Identification No.505 Huntmar Park Drive,Suite 300,Herndon,VA 201

40、70Address of Principal Executive Offices,Zip Code(571)323-3939Registrants telephone number,including area codeSecurities registered pursuant to section 12(b)of the Act:Title of each classTrading SymbolName of each exchange on which registeredCommon Stock,$0.01 par valueBECNNASDAQ Global Select Marke

41、tSecurities registered pursuant to section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes?No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)

42、of the Act.Yes No?Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities and Exchange Act of 1934during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been

43、 subject to such filing requirements forthe past 90 days.Yes?No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationS-T(232.405 of this chapter)during the preceding 12 months(or for such sho

44、rter period that the registrant was required to submit such files).Yes?No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerginggrowth company.See the definitions of large accelerated filer,ac

45、celerated filer,smaller reporting company,and emerging growth company in Rule 12b-2 ofthe Exchange Act.(Check one):Large accelerated filer?Accelerated filerEmerging growth companyNon-accelerated filerSmaller reporting companyIf an emerging growth company,indicate by check mark if the registrant has

46、elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a)of the Exchange ActIndicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiv

47、eness of its internal control overfinancial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.?Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exch

48、ange Act).Yes No?The aggregate market value of the voting common equity held by non-affiliates of the registrant,computed by reference to the closing price at which the commonstock was sold as of the end of the second quarter ended March 31,2020,was$906.3 million.The number of shares of common stock

49、 outstanding as of October 31,2020 was 68,990,505.DOCUMENTS INCORPORATED BY REFERENCEThe information required by Part III(Items 10,11,12,13 and 14)will be incorporated by reference from the Registrants definitive proxy statement for its 2021 AnnualMeeting of Shareholders,which will be filed pursuant

50、 to Regulation 14A with the United States Securities and Exchange Commission(SEC)within 120 days afterthe end of the fiscal year to which this report relates.BEACON ROOFING SUPPLY,INC.Index to Annual Report on Form 10-KYear Ended September 30,2020PagePART I4Item 1.Business4Item 1A.Risk Factors13Item

51、 1B.Unresolved Staff Comments19Item 2.Properties20Item 3.Legal Proceedings21Item 4.Mine Safety Disclosures21PART II22Item 5.Market for Registrants Common Equity,Related Stockholder Matters and IssuerPurchases of Equity Securities22Item 6.Selected Financial Data23Item 7.Managements Discussion and Ana

52、lysis of Financial Condition and Results ofOperations27Item 7A.Quantitative and Qualitative Disclosures About Market Risk40Item 8.Financial Statements and Supplementary Data42Item 9.Changes in and Disagreements with Accountants on Accounting and FinancialDisclosure43Item 9A.Controls and Procedures43

53、Item 9B.Other Information46PART III47PART IV47Item 15.Exhibits and Financial Statement Schedules47Item 16.10-K Summary503FORWARD-LOOKING STATEMENTSThe matters discussed in this Form 10-K that are forward-looking statements are based on current managementexpectations that involve substantial risks an

54、d uncertainties,which could cause actual results to differ materiallyfrom the results expressed in,or implied by,these forward-looking statements.These statements can be identified bythe fact that they do not relate strictly to historical or current facts.They use words such as aim,anticipate,believ

55、e,could,estimate,expect,intend,may,plan,project,should,will be,will continue,will likely result,would and other words and terms of similar meaning in conjunction with a discussion offuture operating or financial performance.You should read statements that contain these words carefully,becausethey di

56、scuss our future expectations,contain projections of our future results of operations or of our financialposition or state other forward-looking information.We believe that it is important to communicate our future expectations to our investors.However,there are events inthe future that we are not a

57、ble to accurately predict or control.The factors listed under Item 1A,Risk Factors,aswell as any cautionary language in this Form 10-K,provide examples of risks,uncertainties and events that maycause our actual results to differ materially from the expectations we describe in our forward-looking sta

58、tements.Although we believe that our expectations are based on reasonable assumptions,actual results may differ materiallyfrom those in the forward-looking statements as a result of various factors,including,but not limited to,thosedescribed under Item 1A,Risk Factors and elsewhere in this Form 10-K

59、.Forward-looking statements speak only as of the date of this Form 10-K.Except as required under federal securitieslaws and the rules and regulations of the SEC,we do not have any intention,and do not undertake,to update anyforward-looking statements to reflect events or circumstances arising after

60、the date of this Form 10-K,whether as aresult of new information,future events or otherwise.As a result of these risks and uncertainties,readers arecautioned not to place undue reliance on the forward-looking statements included in this Form 10-K or that may bemade elsewhere from time to time by or

61、on behalf of us.All forward-looking statements attributable to us areexpressly qualified by these cautionary statements.4PART IITEM 1.BUSINESSUnless the context suggests otherwise,the terms Beacon,the Company,we,our or us are referring toBeacon Roofing Supply,Inc.OverviewBeacon is the largest public

62、ly traded distributor of roofing materials and complementary building products in theUnited States and Canada.We are among the oldest and most established distributors in the industry,providinghigh-quality exterior and interior products to the building industry.Our customers rely on us for local acc

63、ess to thebuilding products and services they need to operate their businesses and serve their clients.On January 15,2020,we announced the rebranding of our exterior product branches with the trade name BeaconBuilding Products(the Rebranding).The new name,and a related logo,were adopted at over 450

64、Beacon one-step exterior products branches.Our interior,insulation,weatherproofing and two-step branches continue to operateunder legacy brand names.As of September 30,2020,we operated 524 branches throughout all 50 states in the U.S.and 6 provinces in Canada.We offer one of the most extensive assor

65、tments of high-quality branded products in the industry,with approximately160,000 SKUs available across our branch network.We serve over 100,000 customers by promptly providing the products they require,allowing our customers todeliver on the project specifications and timelines that are critical to

66、 their success.Our customer base is composedmainly of a diverse population of building contractors from the markets in which we operate.These local,regional,and national contractors work on new construction projects as well as the repair or remodeling of residential andnon-residential properties.We

67、also distribute products to home builders,building owners,and retailers.For the fiscal year ended September 30,2020(fiscal year 2020 or 2020),residential roofing products comprised44.7%of our sales,non-residential roofing products accounted for 23.7%of our sales,and complementary productsprovided th

68、e remaining 31.6%of our sales.Approximately 97.4%of our net sales were to customers located in theUnited States.We differentiate ourselves by providing our customers with value-added services and expertise.Our digital e-commerce platforms lead the industry and support the entire business lifecycle,e

69、nhancing our customers ability tomeet and exceed the needs of their clientele.Our ability to save our customers time and money helps to drivecustomer loyalty while also enabling us to achieve attractive gross profit margins on our product sales.We haveearned a reputation for providing a high level o

70、f product availability and high-quality customer service,drivenmainly by our experienced employees who offer extensive industry knowledge and ensure the timely,accurate,andsafe delivery of our products.We utilize a branch-based operating model to maintain local customer relationships,while benefitin

71、g fromnetworking branches that are in large markets through our On-Time and Complete network(Beacon OTC)thatallows us to serve our customers more effectively.Since our initial public offering(IPO)in 2004,we have achieved growth through completing strategicacquisitions,opening new branch locations,an

72、d broadening the scope of our product offerings.We have grown fromnet sales of$652.9 million in fiscal year 2004 to net sales of$6.94 billion in fiscal year 2020,representing acompound annual growth rate of 15.9%.Our recent history has been strongly influenced by significant acquisition-driven growt

73、h,highlighted by theacquisitions of Allied Building Products Corp.(Allied)for$2.88 billion in 2018(the Allied Acquisition)andRoofing Supply Group,LLC(RSG)for$1.17 billion in 2016(the RSG Acquisition).These strategicacquisitions expanded our geographic footprint,enhanced our market presence,diversifi

74、ed our product offerings,and positioned us to provide new growth opportunities that will increase our long-term profitability.The scale we5have achieved from our expansion efforts will serve as a competitive advantage,also allowing us to use our assetsmore efficiently and control our expenses to dri

75、ve operating leverage.While we will continue to pursue strategic acquisitions to grow our business,our primary focus is now on improvingour operations and continuing to identify additional opportunities for organic growth.We have demonstrated a trackrecord for success in this pursuit,having opened 9

76、6 new branch locations since 2004.In 2020,we opened seven newbranch locations across Connecticut,Georgia,Louisiana,New Hampshire,Ohio,Oregon and Virginia.In 2019,weopened nine new branch locations across Alabama,California,Florida,Nevada,North Carolina,Pennsylvania andTexas.Our IndustryMarket SizeBa

77、sed on managements estimates,we believe the roofing distribution market in the United States and Canadarepresents more than$25 billion in annual sales with roughly 60%of the market in residential roofing and 40%innon-residential.We also participate in other exterior and interior building products ca

78、tegories,including siding,wallboard,acoustical ceilings,weatherproofing,windows and insulation.Collectively,we believe these otherbuilding products have a larger addressable market opportunity than our primary roofing distribution business.Demand DriversWe believe the majority of roofing demand is d

79、riven by re-roofing activity(estimated at 80-90%),with theremaining balance being tied to new construction.Re-roofing projects are considered to be necessary maintenanceand repair expenditures and are therefore less likely to be postponed during periods of recession or slower economicgrowth.As a res

80、ult,demand for roofing products historically has been less volatile than overall demand forconstruction products.Our complementary building products demand shows exposure to both the residential and non-residential sectors.These products possess greater exposure to new construction as compared to ro

81、ofing products,but they also haveless seasonality,and lower exposure to weather conditions and severe storm volatility.Regional variations in economic activity influence the level of demand for roofing products across the United States.Of particular importance are regional differences in the level o

82、f new home construction and renovation.Demographic trends,including population growth and migration,contribute to the regional variations through theirinfluence on regional housing starts and existing home sales.In addition to our domestic operations,we also operate in 6 provinces across Canada.Thes

83、e international locationsrepresented approximately 2.6%of our total net sales for the fiscal year ended September 30,2020.We expectoverall demand for operations in Canada to grow at a rate similar to our United States operations.For furthergeographic information,see Notes 4 and 15 in the Notes to th

84、e Consolidated Financial Statements.Distribution ChannelsWholesale distribution is the primary distribution channel for both residential and non-residential roofing products.Wholesale roofing product distributors serve the important role of facilitating the purchasing relationships betweenroofing ma

85、terials manufacturers and thousands of contractors.Wholesale distributors can maintain localizedinventories,extend trade credit,give product advice and provide delivery and logistics services.Given significant consolidation in the past decade,Beacon and two other distributors now represent over 50%o

86、f theroofing industry.The industry is characterized by these national distributors,a large number of local and regionalroofing supply participants,as well as home improvement retailers and lumberyards.Our competition is primarilycomposed of local,regional and national specialty roofing distributors.

87、Our complementary products are distributed from traditional exteriors locations or branches designed to address aspecific product and customer subset(e.g.,interiors).The competitive landscape within interiors shares similarfragmentation characteristics to roofing,as four large participants,including

88、 Beacon,represent approximately half6of the market.The other product categories are typically more fragmented and have more meaningful involvementfrom manufacturer direct sales,home improvement and specialty retailers and lumber yards.Our StrengthsWe believe our sales and earnings growth opportuniti

89、es are driven by our competitive strengths,which include thefollowing:Customer Service.We put the customer at the center of our business,with a mission to empower ourcustomers to build more.Our geographic footprint is designed to provide advantages in the regionalmarkets we serve.We provide our cust

90、omers with specialized products and personalized local servicestailored to them.Our focus on customer service allows us to provide valuable guidance to ourcustomers throughout the project lifecycle.Product Portfolio.Our product offerings provide customers with a variety of SKUs to supply theirprojec

91、ts from foundation to rooftop.We believe we have one of the most extensive portfolios of high-quality branded products in the industry,allowing us to address the market-specific needs of thevarious geographic regions that we serve.We believe there are opportunities to expand our currentproduct offer

92、ings,which will create additional opportunities to cross-sell more products throughout ourexisting branch network.Market Position and Scale.We maintain leading positions in key metropolitan markets across allregions that we serve,which currently includes all 50 states throughout the U.S.and 6 Canadi

93、anprovinces.We utilize a branch-based operating model,enhanced by Beacon OTCnetworked branchesin large markets,that allows our customers to benefit from the resources and scale efficiencies of anational distributor.Diversified and stable business model.Our business has been resilient in times of eco

94、nomic downturnbecause of the non-discretionary nature of the demand for our products as well as the diversity of bothour product offerings and our customer base.For the fiscal year ended September 30,2020,no singlecustomer accounted for more than 1%of our net sales.We have a long history of organic

95、sales growthand healthy gross margins through a variety of economic cycles.Industry-leading digital platform.We provide industry-leading digital solutions,including BeaconPRO+,our innovative e-commerce portal,and Beacon 3D+,our roofing estimating tool for ourresidential customers.These platforms hel

96、p our customers save time,work more efficiently and growtheir businesses.Strong cash flow generation.We have increased net sales in thirteen of the sixteen fiscal years sinceour IPO.Our track record of growth,combined with limited capital expenditure requirements,hasresulted in strong cash flow gene

97、ration that has allowed us to manage our debt leverage effectively.Our Growth StrategyOur objective is to be the preferred supplier of building products across markets in the United States and Canadawhile continuing to increase net sales,maximize profitability and maintain a strong balance sheet.We

98、plan to attainthese goals by executing the following initiatives:Leverage our scale and scope to enhance and differentiate our service offering.We intend tocapitalize on the scale we have achieved via expansion through organic growth and strategicacquisitions.We seek to drive volume that will enable

99、 us to use our assets more efficiently and controlour expenses via operating leverage.Our ability to serve customers with seamless execution willdifferentiate us in the market.Our operating model is one that puts customers and markets at the centerof our business by networking branches together in m

100、ajor markets,allowing us to be more responsive.Each Beacon OTCnetwork shares inventory,fleet,equipment and employees in a manner thatmaterially enhances customer service and drives loyalty to the Beacon brand.Drive organic growth by investing in sales models that benefit our customers.We will strive

101、 to beour customers preferred supplier by providing hands-on partnership and practical innovation thatuniquely serves their needs.By expanding and promoting our digital solutions,we will meet ourcustomers changing needs and capitalize on their e-commerce reliance.We will also build strong7partnershi

102、ps with suppliers who rely on us to position their products advantageously in the market,supporting innovation in products and services to benefit our customers.Improve branch operating performance.We will continue to identify operational improvementopportunities at each of our branches.In addition,

103、we will maintain our intensified focus on thosebranches falling in the bottom quintile in operating performance in order to determine what actionsshould be taken to improve the profitability of these locations.Our Products and ServicesProductsThe ability to provide a broad range of products is essen

104、tial to success in building products distribution.We carryone of the most extensive arrays of high-quality branded products in the industry,enabling us to deliver a widevariety of products to our customers on a timely basis.We are able to fulfill the vast majority of our warehouseorders with invento

105、ry on hand because of the breadth and depth of the inventories at our branches.Our product portfolio includes residential and non-residential roofing products as well as complementary buildingproducts,including:Product PortfolioResidentialNon-ResidentialComplementaryRoofing ProductsRoofing ProductsB

106、uilding ProductsAsphalt shinglesSingle-ply roofingVinyl sidingSynthetic slate and tileAsphaltFiber cement sidingClay tileMetalWallboardConcrete tileModified bitumenInsulationSlateBuild-up roofingAcoustical ceilingsNail base insulationCements and coatingsStone veneerMetal roofingInsulation(flat stock

107、/tapered)WindowsFeltsCommercial fastenersDoorsSynthetic underlaymentMetal edges and flashingsSkylightsWood shingles and shakesSmoke/roof hatchesWeatherproofingNails and fastenersSheet metal(copper/aluminum/steel)Gutters and downspoutsMetal edgings and flashingsRoofing toolsDecking and railingPrefabr

108、icated flashingsPVC membraneAir barrierRidge and soffit ventsTPO membraneConcrete restoration systemsSolar systemsEPDM membraneSteel stud framingOur product lines are designed to meet the requirements of our customers,comprised mainly of contractors that areengaged in new construction or renovation

109、projects.The products that we distribute are supplied by the industrysleading manufacturers of high-quality roofing materials,siding,insulation,wallboard,acoustical ceilings,weatherproofing,windows,doors,decking and related products(See Purchasing and Suppliers).In the residential market,asphalt shi

110、ngles comprise the largest share of the products we sell.In the non-residentialmarket,single-ply membranes,insulation,and accessories comprise the largest share of our product offering.In thearea of complementary building products,siding,wallboard,residential insulation,weatherproofing and acoustica

111、lceilings comprise the largest share of the products we sell out of our portfolio.ServicesWe emphasize superior value-added services to our customers.Our goal is to help our customers save time,be moreefficient and enhance their business.We employ a knowledgeable sales force that possesses an in-dep

112、thunderstanding of the various roofing and building products we provide.Our sales force is capable of providingguidance to our customers throughout the lifecycles of their various projects.Specifically,we support our customerswith the following value-added services:advice and assistance on product i

113、dentification,specification and technical support,and trainingservices;8a large,service ready fleet with a broad footprint supporting timely job site delivery,rooftop loadingand logistical services;tapered insulation engineered with enhanced computer-aided design and related layout services;metal fa

114、brication and related metal roofing design and layout services;access to Beacon PRO+,our e-commerce platform,which provides customers with 24/7 access toonline ordering,delivery tracking,order history,promotional tracking and more;access to Beacon 3D+,our roofing estimating tool that helps our resid

115、ential customers attract andretain more business and directly integrates into our Beacon PRO+platform;exclusive,innovative relationships with strategic partners that help promote home financing,CRMmodeling,storm tracking,delivery tracking,and lead generation;trade credit and online bill pay;andmarke

116、ting support,including industry leading information and project leads for contractors.Our CustomersWe serve over 100,000 customers,comprised of contractors,home builders,building owners,and retailers acrossthe United States and Canada.Our customer base varies by size,ranging from relatively small co

117、ntractors to large-sized contractors and builders that operate on a national scale.A significant number of our customers have relied onus as their vendor of choice for decades.We believe that we have strong customer relationships that our competitorscannot easily displace or replicate.For the fiscal

118、 year ended September 30,2020,no single customer accounted formore than 1%of our net sales.Human Capital ResourcesWe believe that our values-based culture is a key differentiator,which is critical to our success.We pride ourselveson attracting and retaining highly dedicated and customer-focused empl

119、oyees at all levels of the organization.Wemaintain a safety-first environment and emphasize the adoption of our Companys core values by all our employees,establishing standards for work ethic,collaboration,and a commitment to deliver.We believe that the achievementof our ongoing objectives will enab

120、le us to deliver exceptional results to our customers and shareholders.We conduct a comprehensive annual organization and talent review process culminating with a report to the Boardof Directors covering key elements such as:executive succession and development,organization structure,diversity,talen

121、t pipelines and workforce planning requirements.We maintain a broad suite of e-learning courses to delivernew hire and annual training to ensure compliance with safety,DOT and all other Federal and State requirements.The focus on retention has become increasingly important as companies across all in

122、dustries are vying for top talent.Our Total Rewards program encompasses compensation,benefits,employee development and the workenvironment.These are the key elements employees consider when making career decisions and we are focused onthem continuously to ensure we are optimizing our talent investme

123、nts.We track voluntary and involuntary turnovermonthly and annually,and conduct exit interviews at all levels to gain relevant information and adapt ourengagement and retention strategy as appropriate.We are taking steps to expand our role as an employer that champions diversity,inclusion and equali

124、ty ofopportunity.We implemented a Diversity and Inclusion framework in 2020 and instituted a companywide councilcomposed of fifteen diverse team members.Julian Francis,our Chief Executive Officer,signed the CEO Action forDiversity&Inclusion pledge,we conducted unconscious bias and diversity training

125、 for our executive leadershipteam and rolled out an internally developed Conversations of Understanding process.We measure gender anddiversity demographic levels by business and function and are placing a more targeted focus on our incomingcollege graduate pipeline and branch operations roles to imp

126、rove overall representation.We promote a culture of charitable giving,highlighted by our annual Beacon of Hope contest that was created togive back to distinguished military veterans by providing roofing replacements or repairs.We are also a founding9sponsor of National Women in Roofing,a volunteer-

127、based organization that supports and advances the careers ofwomen roofing professionals.Our commitment to a culture of safety is unwavering,including a focus on the overall health and wellness of ouremployees.We maintain a comprehensive safety tracking and companywide scorecard program and havedemon

128、strated strong improvements as a company over the past several years.We track and closely manage overallworkers compensation and auto claims,OSHA recordable incidents,lost time rates,DOT compliance,and otherinternally established safety prevention elements on a weekly,monthly,and annual basis.We off

129、er competitivehealth and wellness programs to eligible employees and periodically conduct in-depth analyses of plan utilization tofurther tailor our employee benefits to meet their ongoing needs.In 2020,we implemented COVID-19 protocolsacross all locations in response to the pandemic to ensure both

130、the safety of our employees and compliance with allfederal and local ordinances.As of September 30,2020,we had 7,582 active employees consisting of 2,253 in sales and marketing,940 branchmanagers and assistant branch managers,3,618 drivers,delivery helpers and warehouse workers,704 general andadmini

131、strative employees and 67 executives.We have 407 employees that are represented by labor unions and thereare no material outstanding labor disputes.Sales and MarketingSales StrategyOur sales strategy is to provide a comprehensive array of high-quality products and superior customer service,bothaccur

132、ately and on time.We believe that our proficiency in order fulfillment and inventory management and ourrobust catalog of value-added services,particularly the Beacon PRO+e-commerce platform,enable us to attract andretain customers and differentiate ourselves from the competition.Sales OrganizationOu

133、r experienced sales force includes individuals responsible for generating sales at the local branch level as wellindividuals who focus on our larger,national account customers.We also retain sales personnel with specializedknowledge in relevant areas like solar,weatherproofing and insulation.The bre

134、adth and expertise of our salespeoplehelp us facilitate sales growth from both existing and prospective customers alike.Each of our branches is led by a branch manager.There is also a sales director at each location that is responsible foroverseeing and coaching the sales team.The typical branch sal

135、es team is composed of one to four outsidesalespeople and one to five inside salespeople.Branches that focus primarily on the residential market generallystaff a larger number of outside salespeople.The primary objectives of our outside salespeople are to increase sales to existing customers and pro

136、spect for newcustomers.These activities are supported by utilizing our CRM(Customer Relationship Management)systemthroughout our selling organization.All outside sales representatives have a strategic group of existing customersthat they actively manage to ensure that Beacon is meeting and exceeding

137、 their respective needs.They also spendtime seeking new customers in order to grow and expand their portfolios.To complement our outside sales force,we have built an experienced and technically proficient inside sales staffwith vital product expertise to address inquiries from our customers.Our insi

138、de sales force is on the front line ofcustomer engagement and also is responsible for fielding incoming orders and providing price quotes.In addition to our outside and inside sales forces,we employ representatives who act as liaisons for certain roofingmaterials manufacturers to assist with the pro

139、motion of specific products to professional contractors,architects andbuilding owners.MarketingOur marketing efforts are designed to ensure that our current and prospective customers are aware of Beaconsability help them save time,be more efficient and enhance their business.Beacons central marketin

140、g functionsupplements our sales force through targeted multi-channel outreach.10In order to build and strengthen relationships with customers and vendors,we offer exclusive promotions and helpsponsor key national and regional trade shows.We also develop general business and roofing seminars for ourc

141、ustomers and organize product demonstrations by our vendors.We serve as Trustee of The Roofing Alliance,afoundation established by the National Roofing Contractors Association,and are also active participants in other keyregional contractors associations.Since 2017,customers have been using Beacon P

142、RO+,our innovative e-commerce portal,to help manage theirbusinesses.This digital platform enables customers to order online from our catalog of approximately 160,000products,have 24/7 access to view real-time pricing,process and review the status of orders,track deliveries,monitor local storm activi

143、ty and vendor promotions,request and approve quotes,and pay their bills online.BeaconPRO+provides us with additional opportunities to engage with our customers and helps them save time,be moreefficient,and enhance their businesses.We leverage several other unique products and services,including Beac

144、on 3D+,a roofing estimating tool for ourresidential customers that transforms smartphone photos of any home to a fully measured,customizable 3D model.Beacon 3D+enables us to have an end-to-end portal that tracks projects online from measurements to ordering.Purchasing and SuppliersOur status as a le

145、ader in our core geographic markets,as well as our reputation in the industry,has allowed us toforge strong relationships with numerous manufacturers of roofing materials and complementary building products,including Armstrong World Industries,Atlas Roofing,Berger Building Products,Building Products

146、 of Canada,Carlisle Syntec,CertainTeed Roofing,CertainTeed Siding,ClarkDietrich,Firestone Building Products,GAF,IKOManufacturing,James Hardie Building Products,Johns Manville Roofing,Malarkey,National Gypsum,OwensCorning Roofing,Ply Gem,Soprema,and TAMKO Building Products.We are positioned as a key

147、distributor with our suppliers due to our industry expertise,market share,track record ofgrowth and financial strength,and the substantial volume of products that we distribute.We manage the procurement of products through our national headquarters and regional offices,allowing us to takeadvantage o

148、f both scale and local market conditions to purchase products more economically than most of ourcompetitors.We place purchase orders electronically with some of our major vendors.When invoices are received,our system matches them to the related purchase orders and then schedules the associated payme

149、nt.Product isshipped directly by the manufacturers to our branches or customers.Operations and InfrastructureOperationsOur branch-based model is designed to meet local customer needs.In certain large markets we have taken steps toassure customer satisfaction by coordinating branches via our On-Time

150、and Complete network(Beacon OTC).TheBeacon OTCnetwork allows for additional efficiencies in staffing,fleet and inventory while promoting a synergyacross branches and a drive to perform that benefits both the customer and Beacon.Branch and market managers areprovided a significant amount of autonomy,

151、with responsibility for sales,pricing and staffing activities,and have fulloperational control of customer service and deliveries.We provide these managers with significant incentives thatallow them to share in the profitability of both their respective branches/markets and the Company as a whole.Em

152、ployees at our regional and corporate locations assist with functions such as procurement,credit and safetyservices,fleet management,information systems support,contract management,accounting,treasury and legalservices,human resources,benefits administration,and sales and use tax services.Our distri

153、bution fulfillment process is initiated upon receiving a request for a contract job order or direct productorder from a customer.Under a contract job order,the customer typically requests roofing or other constructionmaterials and technical support services.The customer discusses the projects requir

154、ements with a salesperson andthe salesperson provides a price quote for the package of products and services.Subsequently,the salespersonprocesses the order and we deliver the products to the customers job site.Our digital platform serves as anextension of our brick and mortar operations and provide

155、s customers with 24/7 access to order and track delivery of11our products.These advanced capabilities provide us with additional opportunities to engage with our customers andsupport the entire project lifecycle.In fiscal year 2020,we were able to support our customers by fulfilling approximately 99

156、%of warehouse ordersthrough our in-stock inventory as a result of the breadth and depth of the inventory maintained at our branches.FacilitiesAs of September 30,2020,we operated a network of 524 branches that serve key metropolitan areas in all 50 statesthroughout the U.S.and 6 Canadian provinces.Th

157、is network has enabled us to effectively and efficiently serve abroad customer base and to achieve a leading market position in each of our geographic markets.FleetDuring the year ended September 30,2020,our distribution infrastructure supported more than 1.7 milliondeliveries.To service our custome

158、r base,we maintained a dedicated owned fleet of 1,837 straight trucks,579tractors and 1,232 trailers as of September 30,2020.Nearly all of our delivery vehicles are equipped withspecialized equipment,including 2,424 truck-mounted forklifts,cranes,hydraulic booms and conveyors,which arenecessary to d

159、eliver products to job sites in an efficient and safe manner and in accordance with our customersrequirements.Our branches typically focus on providing materials to customers who are located within a two-hourradius of their respective facilities,and generally make deliveries each business day.We bel

160、ieve that protection of the environment is important to the long-term success of our business.We recognizethat our greatest impact on the environment is fleet emissions,and we have committed to using the Beacon OTCstrategy to minimize our average mileage per delivery and reduce our carbon footprint.

161、Management Information SystemsWe operate fully integrated management information systems across our locations.Acquired businesses are movedto our IT platform as soon as feasible following acquisition.Our systems support every major internal operationalfunction,providing complete integration of purch

162、asing,receiving,order processing,shipping,inventorymanagement,sales analysis and accounting.These common systems allow our branches to easily acquire productsor schedule deliveries from nearby branches,greatly enhancing our customer service.Our systems also include apricing matrix which allows us to

163、 refine pricing by region,branch,customer and customer type,or even a specificcustomer project.In addition,our systems allow us to monitor all branch and regional performance to support theadoption of strategic initiatives and drive results.We retain financial,credit and other documents for purposes

164、 ofinternal approvals,online viewing and auditing.We deploy an array of cybersecurity capabilities to protect our various business systems and data.Where necessary,these capabilities have allowed us to transition seamlessly to operating effectively and safely in a virtualenvironment.Our branches are

165、 connected to a common computer network via secure Internet connections or privatedata lines.We maintain redundant systems with transactional data getting replicated throughout each business day.We have the capability of electronically switching our operations to the disaster recovery system.In cert

166、aininstances,we rely on the IT systems of third parties to assist with conducting our business.If our systems or those ofthird parties on which we rely are damaged,breached,or cease to function properly,we may have to repair orreplace them and may experience temporary interruptions in our business o

167、perations as a result.Government RegulationsWe are subject to regulation by various federal,state,provincial and local agencies.These agencies include theEnvironmental Protection Agency,Department of Transportation,Occupational Safety and Health Administrationand Department of Labor and Equal Employ

168、ment Opportunity Commission.We believe we comply,in all materialrespects,with existing applicable statutes and regulations affecting environmental issues and our employment,workplace health and workplace safety practices,and compliance with such statutes and regulations has no materialeffect on our

169、capital expenditures,earnings or competitive position.12CompetitionAlthough we are one of the largest roofing materials and complementary building product distributors in the UnitedStates and Canada,the industry remains highly competitive.The vast majority of our competition comes from localand regi

170、onal roofing supply distributors and,to a lesser extent,other building supply distributors and big boxretailers.Among distributors,we compete against a small number of large distributors and many small and localprivately-owned distributors.The principal competitive factors in our business include,bu

171、t are not limited to,theavailability of materials and supplies;technical product knowledge and advisory expertise;delivery and otherservice capabilities;pricing of products;and the availability of credit and capital.We generally compete on the basisof the quality of our products and services and,to

172、a lesser extent,price.SeasonalityIn general,sales and net income are highest during our first,third and fourth fiscal quarters,which represent thepeak months of construction and re-roofing,especially in our branches in the northern and mid-western U.S.and inCanada.We have historically incurred low n

173、et income levels or net losses during the second quarter when our salesare substantially lower.We generally experience an increase in inventory,accounts receivable and accounts payable during the third andfourth quarters of the year as a result of the seasonality of our business.Our peak cash usage

174、generally occurs duringthe third quarter,primarily because accounts payable terms offered by our suppliers typically have due dates inApril,May and June,while our peak accounts receivable collections typically occur from June through November.We generally experience a slowing of our accounts receiva

175、ble collections during our second quarter,mainly due tothe inability of some of our customers to conduct their businesses effectively in inclement weather in certain regionsof the U.S.and Canada.We continue to attempt to collect those receivables,which require payment under ourstandard terms,and typ

176、ically do not provide material concessions to our customers.We generally experience our peak working capital needs during the third quarter after we build our inventoriesfollowing the winter season but before we begin collecting on most of our spring receivables.The impact of the COVID-19 pandemic m

177、ay cause fluctuations in our financial results and working capital that arenot aligned with the seasonality we generally experience.History and Additional InformationOur predecessor,Beacon Sales Company,Inc.,was founded in Charlestown,Massachusetts(part of Boston)in1928.Beacon Roofing Supply,Inc.was

178、 incorporated in Delaware in 1997.Our principal executive offices arelocated at 505 Huntmar Park Drive,Suite 300,Herndon,Virginia 20170 and our telephone number is(571)323-3939.Our Internet website address is .We are subject to the information and periodic reporting requirements of the Securities Ex

179、change Act of 1934,asamended(Exchange Act),and,in accordance with such requirements,furnish or file periodic reports,proxystatements,and other information with the Securities and Exchange Commission(SEC).These periodic reports,proxy statements,and other information are available at the SEC website,w

180、ww.sec.gov.We also maintain aninvestor relations page on our website where our annual reports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K,amendments to those reports and other required SEC filings may be accessed free ofcharge as soon as reasonably practicable after such

181、material is electronically filed with,or furnished to,the SEC.13ITEM 1A.RISK FACTORSYou should carefully consider the risks and uncertainties described below and other information included in thisForm 10-K in evaluating us and our business.If any of the events described below occur,our business and

182、financialresults could be adversely affected in a material way.This could cause the trading price of our common stock todecline,perhaps significantly.Risks Related to the COVID-19 PandemicThe impact of the COVID-19 pandemic,or similar health concerns,could have a significant effect on supplyand/or d

183、emand for our products and have a negative impact on our business operations and financial results.A significant outbreak of epidemic,pandemic,or contagious diseases in the human population,including theCOVID-19 pandemic,could cause a widespread health crisis that could result in an economic downtur

184、n,affectingthe supply and/or demand for our products.Any quarantines,labor shortages or other disruptions to us,oursuppliers,or our customers would likely adversely impact our sales and operating results.A prolonged economicdownturn may result in reduced cash flows or a reduction to our market capit

185、alization,triggering the potential needto recognize significant non-cash asset impairment charges in our results of operations.It could also result in anadverse impact on the creditworthiness of our customers and the collectability of trade receivables,thereby affectingour liquidity.In addition,orde

186、r lead times could be extended or delayed,and pricing could increase.Some productsor services may become unavailable if the regional spread became significant enough to prevent alternativesourcing.The increase in remote working arrangements for our personnel may result in greater informationtechnolo

187、gy security risks.We are unable to predict the potential future impact that the COVID-19 pandemic,oranother such virus or health concern,could have on us if the spread is unable to be contained.Risks Related to Product Supply and Vendor RelationsAn inability to obtain the products that we distribute

188、 could result in lost revenues and reduced margins anddamage relationships with customers.We distribute roofing and other specialty exterior and interior building materials that are manufactured by a numberof major suppliers.Disruptions in our sources of supply may occur as a result of unanticipated

189、 demand or productionor delivery difficulties.When shortages occur,roofing material suppliers often allocate products among distributors.Although we believe that our relationships with our suppliers are strong and that we would have access to similarproducts from competing suppliers should products

190、be unavailable from current sources,any supply shortage,particularly of the most commonly sold items,could result in a loss of revenues and reduced margins and damagerelationships with customers.A change in vendor pricing and demand could adversely affect our income and gross margins.Many of the pro

191、ducts that we distribute are subject to price changes based upon manufacturers raw material costsand other manufacturer pricing decisions.For example,as a distributor of residential roofing supplies,our businessis sensitive to asphalt prices,which are highly volatile and often linked to oil prices,a

192、s oil is a significant input inasphalt production.Shingle prices have been volatile in recent years,partly due to volatility in asphalt prices.Historically,we have generally been able to pass increases in the prices of shingles on to our customers.Althoughwe often are able to pass on manufacturers p

193、rice increases,our ability to pass on increases in costs and our ability todo so in a timely fashion depends on market conditions.The inability to pass along cost increases or a delay in doingso could result in lower operating margins.In addition,higher prices could impact demand for these products,

194、resulting in lower sales volumes.A change in vendor rebates could adversely affect our income and gross margins.The terms on which we purchase products from many of our vendors entitle us to receive a rebate based on thevolume of our purchases.These rebates effectively reduce our costs for products.

195、If market conditions change,vendors may adversely change the terms of some or all of these programs.Although these changes would not affectthe net recorded costs of product already purchased,it may lower our gross margins on products we sell andtherefore the income we realize on such sales in future

196、 periods.14Risks Related to Human CapitalLoss of key talent or our inability to attract and retain new qualified talent could hurt our ability to operate andgrow successfully.Our success will continue to depend to a significant extent on our executive officers and key management personnel.We may not

197、 be able to retain our executive officers and key personnel or attract additional qualified management.The loss of any of our executive officers or other key management employees,or our inability to recruit and retainqualified employees,could hurt our ability to operate and make it difficult to exec

198、ute our acquisition and internalgrowth strategies.Risks Related to AcquisitionsWe may not be able to effectively integrate newly acquired businesses into our operations or achieve expected costsavings or profitability from our acquisitions.Our growth strategy includes acquiring other distributors of

199、 roofing materials and complementary products.Acquisitions involve numerous risks,including:unforeseen difficulties in integrating operations,technologies,services,accounting and employees;diversion of financial and management resources from existing operations;unforeseen difficulties related to ent

200、ering geographic regions where we do not have prior experience;potential loss of key employees;unforeseen liabilities associated with businesses acquired;andinability to generate sufficient revenue or realize sufficient cost savings to offset acquisition orinvestment costs.As a result,if we fail to

201、evaluate and execute acquisitions properly,we might not achieve the anticipated benefits ofsuch acquisitions and we may incur costs in excess of what we anticipate.These risks would likely be greater in thecase of larger acquisitions.We may not be able to successfully complete acquisitions on accept

202、able terms,which would slow our growth rate.We continually seek additional acquisition candidates in selected markets and from time to time engage inexploratory discussions with potential candidates.We are unable to predict whether or when we will be able toidentify any suitable additional acquisiti

203、on candidates,or the likelihood that any potential acquisition will becompleted.If we cannot complete acquisitions that we identify on acceptable terms,it is unlikely that we willsustain the historical growth rates of our business.Risks Related to Cyclicality and SeasonalityCyclicality in our busine

204、ss and general economic conditions could result in lower revenues and reducedprofitability.A portion of the products we sell are for residential and non-residential construction.The strength of these marketsdepends on new housing starts and business investment,which are a function of many factors be

205、yond our control,including credit and capital availability,interest rates,foreclosure rates,housing inventory levels and occupancy,changes in the tax laws,employment levels,consumer confidence and the health of the United States economy andmortgage markets.Economic downturns in the regions and marke

206、ts we serve could result in lower net sales and,since many of our expenses are fixed,lower profitability.In addition,demand for certain interior products,such asdrywall,is highly correlated with new housing starts,which are subject to the factors detailed above.Unfavorablechanges in demographics,cre

207、dit markets,consumer confidence,housing affordability,or housing inventory levelsand occupancy,or a weakening of the United States economy or of any regional or local economy in which weoperate,could adversely affect consumer spending,result in decreased demand for our products,and adverselyaffect o

208、ur business.In addition,instability in the economy and financial markets,including as a result of terrorism orcivil or political unrest,may result in a decrease in housing starts,which would adversely affect our business.15Seasonality and weather-related conditions may have a significant impact on o

209、ur financial results from period toperiodThe demand for our outdoor building materials is heavily correlated to both seasonal changes and unpredictableweather patterns.Seasonal demand fluctuations are expected,such as in our second fiscal quarter,when winterconstruction cycles and cold weather patte

210、rns have an adverse impact on new construction and re-roofing activity.The timing of weather patterns(unseasonable temperatures)and severe weather events(hurricanes,storms andprotracted rain)may impact our financial results within a given period either positively or negatively,making itdifficult to

211、accurately forecast our results of operations.We expect that these seasonal and weather-related variationswill continue in the near future.Risks Related to Information TechnologyIf we encounter difficulties with our management information systems,we could experience problems withinventory,collection

212、s,customer service,cost control and business plan execution.We believe our management information systems are a competitive advantage in maintaining our leadership positionin the roofing distribution industry.However,if we experience problems with our management information systems,we could experien

213、ce,among other things,product shortages and/or an increase in accounts receivable aging.Anyfailure by us to properly maintain and protect our management information systems could adversely impact ourability to attract and serve customers and could cause us to incur higher operating costs and experie

214、nce delays in theexecution of our business plan.Since we rely heavily on information technology both in serving our customers and in our enterprise infrastructurein order to achieve our objectives,we may be vulnerable to damage or intrusion from a variety of deliberate cyber-attacks carried out by i

215、nsiders or third parties,including computer viruses,worms or other malicious softwareprograms that may access our systems.Despite the precautions we take to mitigate the risks of such events,an attackon our enterprise information technology system could result in business disruption and/or theft of

216、our proprietaryand confidential information.Such events could harm our reputation and have an adverse impact on our financialresults,including the impact of related legal,regulatory,and remediation costs.In certain instances,we rely on the IT systems of third parties to assist with conducting our bu

217、siness.If our systemsor those of third parties on which we rely are damaged,breached,or cease to function properly,we may have torepair or replace them and may experience temporary interruptions in our business operations as a result.Risks Related to Capitalization and Capital StructureAn impairment

218、 of goodwill and/or other intangible assets could reduce net income.Acquisitions frequently result in the recording of goodwill and other intangible assets.At September 30,2020,goodwill represented approximately 36%of our total assets.Goodwill is not amortized for financial reportingpurposes and is

219、subject to impairment testing at least annually using a fair-value based approach.The identificationand measurement of goodwill impairment involves the estimation of the fair value of our reporting units.Ouraccounting for impairment contains uncertainty because management must use judgment in determ

220、ining appropriateassumptions to be used in the measurement of fair value.We determine the fair values of our reporting units byusing a qualitative approach.We evaluate the recoverability of goodwill for impairment in between our annual tests when events or changes incircumstances,including a sustain

221、ed decline in our market capitalization,indicate that the carrying amount ofgoodwill may not be recoverable.We also perform an annual qualitative assessment to evaluate whether evidenceexists that would indicate our indefinite-lived intangibles are impaired.In addition,we review for triggering event

222、sthat could indicate a need for an impairment test for finite-lived intangible assets.Any impairment of goodwill orindefinite-or finite-lived intangibles will reduce net income in the period in which the impairment is recognized.We might need to raise additional capital,which may not be available,th

223、us limiting our growth prospects.In the future we may require equity or additional debt financing in order to consummate an acquisition,foradditional working capital for expansion,or if we suffer more than seasonally expected losses.In the event such16additional financing is unavailable to us on com

224、mercially attractive terms or at all,we may be unable to expand ormake acquisitions or pursue other growth opportunities.Major disruptions in the capital and credit markets may impact both the availability of credit and businessconditions.If the financial institutions that have extended credit commi

225、tments to us are adversely affected by major disruptionsin the capital and credit markets,they may become unable to fund borrowings under those credit commitments.Thiscould have an adverse impact on our financial condition since we need to borrow funds at times for working capital,acquisitions,capit

226、al expenditures and other corporate purposes.Major disruptions in the capital and credit markets could also lead to broader economic downturns,which couldresult in lower demand for our products and increased incidence of customers inability to pay their accounts.Themajority of our net sales volume i

227、s facilitated through the extension of trade credit to our customers.Additionalcustomer bankruptcies or similar events caused by such broader downturns may result in a higher level of bad debtexpense than we have historically experienced.Also,our suppliers may be impacted,causing potential disruptio

228、nsor delays of product availability.These events would adversely impact our results of operations,cash flows andfinancial position.Our level and terms of indebtedness could adversely affect our ability to raise additional capital to fund ouroperations,take advantage of new business opportunities,and

229、 prevent us from meeting our obligations under ourdebt instruments.As of September 30,2020,we had$1.29 billion in aggregate principal amount of our 4.875%senior notes due in2025 outstanding,$295.9 million in aggregate principal amount of our 4.5%senior notes due in 2026 outstanding,$922.3 million ou

230、tstanding under our senior secured term loan due in 2025,$251.1 million drawn under our asset-based revolving line of credit with a 2023 maturity date,and$2.6 million of total other indebtedness.Our substantialdebt could have important consequences to us,including:increasing our vulnerability to gen

231、eral economic and industry conditions;requiring a substantial portion of our cash flow used in operations to be dedicated to the payment ofprincipal and interest on our indebtedness,therefore reducing our liquidity and our ability to use ourcash flow to fund our operations,capital expenditures and f

232、uture business opportunities;exposing us to the risk of increased interest rates,and corresponding increased interest expense,because borrowings under our asset-based revolving line of credit and term loan are at variable rates ofinterest;reducing funds available for working capital,capital expendit

233、ures,acquisitions and other generalcorporate purposes,due to the costs and expenses associated with such debt;making it more difficult to satisfy our obligations under the terms of our indebtedness;limiting our ability to obtain additional financing for working capital,capital expenditures,debt serv

234、icerequirements,acquisitions,and general corporate or other purposes;andlimiting our ability to adjust to changing marketplace conditions and placing us at a competitivedisadvantage compared to our competitors who may have less debt.In addition,the debt agreements that currently govern our asset-bas

235、ed revolving line of credit and term loan and theindentures governing our outstanding senior notes impose significant operating and financial restrictions on us,including limitations on our ability to,among other things,pay dividends and make other distributions on,or redeemor repurchase,capital sto

236、ck;make certain investments;incur certain liens;enter into transactions with affiliates;merge or consolidate;enter into agreements that restrict the ability of our subsidiaries to make dividends or otherpayments to Beacon Roofing Supply,Inc.;and transfer or sell assets.In addition,the terms of our p

237、referred stockcontain restrictions on our ability to pay dividends on our common stock,and the holders of such shares wouldparticipate in any declared common stock dividends,reducing the cash available to holders of common stock.As aresult of these restrictions,we will be limited as to how we conduc

238、t our business and we may be unable to raiseadditional debt or equity financing to compete effectively or to capitalize on available business opportunities.17If our cash flows and capital resources are insufficient to fund our debt service obligations,we may be forced toreduce or delay capital expen

239、ditures,sell assets,seek additional capital,or restructure or refinance our indebtedness.These alternative measures may not be successful and may not permit us to meet our scheduled debt serviceobligations,which could cause us to default on our debt obligations and impair our liquidity.In the event

240、of adefault under any of our indebtedness,the holders of the defaulted debt could elect to declare all the funds borrowedto be due and payable,together with accrued and unpaid interest,which in turn could result in cross-defaults underour other indebtedness.The lenders under our asset-based revolvin

241、g line of credit could also elect to terminate theircommitments thereunder and cease making further loans,and the lenders under the asset-based revolving line ofcredit and term loan could institute foreclosure proceedings against their collateral,which could potentially force usinto bankruptcy or li

242、quidation.Despite our current level of indebtedness,we may be able to incur substantially more debt and enter into othertransactions which could further exacerbate the risks to our financial condition described above.We may be able to incur significant additional indebtedness in the future.Although

243、the debt agreements thatcurrently govern our asset-based revolving line of credit,term loan,outstanding senior notes and other debtinstruments contain restrictions on the incurrence of additional indebtedness and entering into certain types of othertransactions,these restrictions are subject to a nu

244、mber of qualifications and exceptions.Additional indebtednessincurred in compliance with these restrictions could be substantial.These restrictions also do not prevent us fromincurring obligations,such as trade payables,that do not constitute indebtedness as defined under our debtinstruments.To the

245、extent we incur additional indebtedness or other obligations,the risks described in theimmediately preceding risk factor and others described herein may increase.The holders of Preferred Stock issued in connection with the Allied Acquisition have rights,preferences andprivileges that are not held by

246、,and are preferential to,the rights of our common shareholders.We may berequired,under certain circumstances,to repurchase the preferred stock for cash,and such obligations couldadversely affect our liquidity and financial condition.On January 2,2018 we issued 400,000 shares of Series A Cumulative C

247、onvertible Participating Preferred Stock,parvalue$0.01 per share(the Preferred Stock)to CD&R Boulder Holdings,L.P.(the CD&R Stockholder),anentity affiliated with the investment firm Clayton,Dubilier&Rice LLC,pursuant to an Investment Agreement datedAugust 24,2017(the Investment Agreement).The procee

248、ds of the issuance were used to partially finance theAllied Acquisition.The Preferred Stock is convertible perpetual participating preferred stock of Beacon,with aninitial conversion price of$41.26 per share,and accrues dividends at a rate of 6.0%per annum(payable in cash orin-kind,subject to specif

249、ied limitations).The Preferred Stock may be converted at any time at the option of theholder into 9,694,619 shares of our common stock.In addition,under the terms of the Preferred Stock,we may,atour option,force the conversion of all(but not less than all)of the outstanding shares of Preferred Stock

250、 to commonstock if at any time the market price of our common stock exceeds 200%of the then-effective conversion price pershare for at least 75 days out of any trailing 90-trading day period.Any conversion of the Preferred Stock maysignificantly dilute our common shareholders and adversely affect bo

251、th our net income per share and the marketprice of our common stock.If we issue additional shares of Preferred Stock as in-kind dividend payments that,together with the 400,000shares of Preferred Stock issued to the CD&R Stockholder,represent in excess of 12,071,937 shares of our commonstock on an a

252、s-converted basis,and in certain other circumstances as provided in the Preferred Stock certificate ofdesignations,a Triggering Event would occur.Upon the occurrence of a Triggering Event,the dividend rate willincrease to 9.0%per annum for so long as the Triggering Event remains in effect,which will

253、 further dilute ourcommon shareholders if we issue additional shares of Preferred Stock to satisfy our dividend payment obligations.Moreover,if we declare or pay a cash dividend on our common stock,we will be required to declare and pay adividend on the outstanding Preferred Stock on a pro rata basi

254、s with the common shares determined on an as-converted basis at the time the dividend is declared.The maximum number of shares of common stock into whichthe Preferred Stock may be converted(taking into account any shares of Preferred Stock issued as in-kind dividendpayments)will be limited to 12,071

255、,937 shares of our common stock,which represents 19.99%of the total numberof shares of common stock issued and outstanding immediately prior to the execution of the Investment Agreement,unless and until we were to obtain shareholder approval of such issuance under the Nasdaq listing rules.The termso

256、f the Investment Agreement and Preferred Stock do not require us to obtain shareholder approval in thesecircumstances.18Holders of the Preferred Stock generally are entitled to vote with the holders of the shares of common stock on an asconverted basis on all matters submitted for a vote of holders

257、of shares of common stock,voting together with theholders of shares of common stock as one class(subject to the limitation that any one Preferred Stock holder,together with its affiliates,cannot vote any preferred shares in excess of 19.99%of the aggregate voting power ofthe common stock outstanding

258、 immediately prior to the execution of the Investment Agreement prior to shareholderapproval).The prior written consent of the holders of a majority of the Preferred Stock is required to,among otherthings,(i)amend or modify our charter,by-laws or the certificate of designations governing the Preferr

259、ed Stock thatwould adversely affect the Preferred Stock or(ii)amend our debt agreements to,among other things,adverselyaffect our ability to pay dividends on the Preferred Stock,subject to certain exceptions.The conversion price of the Preferred Stock is subject to customary anti-dilution adjustment

260、s,including in the eventof any stock split,stock dividend,recapitalization or similar event.Adjustments to the conversion price could dilutethe ownership interest of our common shareholders.In addition,holders of Preferred Stock have the right to receivea liquidation preference entitling them to be

261、paid out of our assets available for distribution to shareholders,beforeany payment may be made to holders of shares of common stock,an amount equal to the greater of(a)100%of theliquidation preference thereof plus all accrued and unpaid dividends or(b)the amount that such holder would havebeen enti

262、tled to receive upon our liquidation,dissolution and winding up if all outstanding shares of Preferred Stockhad been converted into common stock immediately prior to such liquidation,dissolution or winding up,withoutregard to any of the limitations on conversion or convertibility.Furthermore,the hol

263、ders of the Preferred Stock will have certain redemption rights,including upon certain changeof control events involving us,which,if exercised,could require us to repurchase all of the outstanding PreferredStock for cash at the original purchase price of the Preferred Stock plus all accrued and unpa

264、id dividends thereon.Our obligations to pay regular dividends to the holders of the Preferred Stock or any required repurchase of theoutstanding Preferred Stock could impact our liquidity and reduce the amount of cash available for working capital,capital expenditures,growth opportunities,acquisitio

265、ns,and other general corporate purposes.Our obligations to theholders of Preferred Stock could also limit our ability to obtain additional financing or increase our borrowing costs,which could have an adverse effect on our financial condition.The preferential rights could also result in divergentint

266、erests between the holders of the Preferred Stock and our common shareholders.The CD&R Stockholder may sell shares of our common stock in the public market,which may cause the marketprice of our common stock to decrease,and therefore make it more difficult to raise equity financing or issueequity as

267、 consideration in an acquisition.Our registration rights agreement with the CD&R Stockholder requires us to register all shares held by the CD&RStockholder and its permitted transferees(including shares of our common stock issued upon conversion ofPreferred Stock)under the Securities Act upon reques

268、t of the CD&R Stockholder.The registration rights for theCD&R Stockholder will allow it to sell its shares without compliance with the volume and manner of salelimitations under Rule 144 promulgated under the Securities Act and will facilitate the resale of such securities intothe public market.The

269、market value of our common stock could decline as a result of sales by the CD&RStockholder from time to time.In particular,the sale of a substantial number of our shares by the CD&RStockholder within a short period of time,or the perception that such sale might occur,could cause our stock priceto de

270、crease,make it more difficult for us to raise funds through future offerings of Beacon common stock or acquireother businesses using Beacon common stock as consideration.The CD&R Stockholder holds a significant equity interest in our business and may exercise significant influenceover us,including t

271、hrough its ability to designate up to two directors to our board of directors,and its interests asa preferred equity holder may diverge from,or even conflict with,the interests of our other commonshareholders.As of September 30,2020,the CD&R Stockholder beneficially owns shares of our common stock a

272、nd PreferredStock,which,taken together on an as-converted basis,represent 29.8%of our total voting power.As a result,theCD&R Stockholder may have the indirect ability to significantly influence our policies and operations.In addition,under the Investment Agreement,the CD&R Stockholder is entitled to

273、 appoint up to two directors to our board ofdirectors.Both Nathan K.Sleeper and Philip W.Knisely,partners at CD&R,currently serve as directors.Notwithstanding that all directors will be subject to fiduciary duties to us and to applicable law,the interests of thedirectors designated by the CD&R Stock

274、holder may differ from the interests of our other directors or commonshareholders as a whole.With such representation on our board of directors,the CD&R Stockholder has influence19over the appointment of management and any action requiring the vote of our board of directors,includingsignificant corp

275、orate action such as mergers and sales of substantially all of our assets.The directors controlled bythe CD&R Stockholder will also be able to influence decisions affecting our capital structure,including decisions toissue additional capital stock and incur additional debt.Additionally,for so long a

276、s the CD&R Stockholder ownsPreferred Stock,certain matters will require the approval of the CD&R Stockholder,including:(1)amendments ormodifications to our charter,by-laws or the certificate of designations governing the Preferred Stock that wouldadversely affect the Preferred Stock,(2)authorization

277、,creation,increase in the authorized amount of,or issuance ofany class or series of senior or parity equity securities or any security convertible into,shares of senior or parityequity securities(but not junior securities),(3)any increase or decrease in the authorized number of preferred sharesor th

278、e issuance of additional shares of Preferred Stock,(4)amendments to our debt agreements that would,amongother things,adversely affect our ability to pay dividends on the Preferred Stock,subject to certain exceptions,and(5)the liquidation,dissolution or filing of a voluntary petition for bankruptcy o

279、r receivership.The CD&RStockholder and its affiliates are in the business of making or advising on investments in companies,includingbusinesses that may directly or indirectly compete with certain portions of our business.In addition,the CD&RStockholder may have an interest in pursuing acquisitions,

280、divestitures,financings or other transactions that,in theirjudgment,could enhance their overall equity investment and have a negative impact to our common shareholders asa whole.Furthermore,the CD&R Stockholder may,in the future,own businesses that directly or indirectly competewith us.The CD&R Stoc

281、kholder may also pursue acquisition opportunities that may be complementary to ourbusiness,and as a result,those acquisition opportunities may not be available to us.ITEM 1B.UNRESOLVED STAFF COMMENTSNone.20ITEM 2.PROPERTIESAs of September 30,2020,we leased 505 branch facilities and 14 non-branch fac

282、ilities throughout the United Statesand Canada.These leased facilities range in size from approximately 500 to 240,000 square feet.In addition,as ofSeptember 30,2020,we owned 19 branch facilities.These owned facilities range in size from approximately 11,500square feet to 68,000 square feet.These fa

283、cilities are pledged as collateral under our senior secured term loan andour asset based revolving line of credit.We believe that our properties are in good operating condition andadequately serve our current business operations.The following table summarizes the locations of our branches and facili

284、ties as of September 30,2020:Non-BranchLocationBranchesFacilitiesU.S.StateAlabama7Alaska1Arizona5Arkansas4California472Colorado18Connecticut7Delaware3Florida391Georgia152Hawaii9Idaho2Illinois14Indiana8Iowa3Kansas41Kentucky5Louisiana9Maine4Maryland211Massachusetts131Michigan11Minnesota5Mississippi2Mi

285、ssouri10Montana1Nebraska6Nevada4New Hampshire3New Jersey211New Mexico1New York18North Carolina241North Dakota2Ohio111Oklahoma2Oregon8Pennsylvania32Rhode Island2South Carolina8South Dakota1Tennessee821Non-BranchLocationBranchesFacilitiesTexas371Utah6Vermont1Virginia16Washington171West Virginia4Wiscon

286、sin4Wyoming2Total United States50513Canadian ProvinceAlberta3British Columbia3Nova Scotia1Ontario6Quebec51Saskatchewan1Total Canada191Total All52414ITEM 3.LEGAL PROCEEDINGSFrom time to time,we are involved in lawsuits that are brought against us in the normal course of business.We arenot currently a

287、 party to any legal proceedings that would be expected,either individually or in the aggregate,to havea material adverse effect on our business or financial condition.ITEM 4.MINE SAFETY DISCLOSURESNot applicable.22PART IIITEM5.MARKETFORREGISTRANTSCOMMONEQUITY,RELATEDSTOCKHOLDERMATTERS AND ISSUER PUR

288、CHASES OF EQUITY SECURITIESOur common stock trades on the Nasdaq Global Select Market(the Nasdaq)under the symbol BECN.As ofNovember 9,2020,there were 74 registered holders of record of our common stock.We have not paid cash dividends on our common stock and do not anticipate paying dividends in the

289、 foreseeablefuture.Our board of directors currently intends to retain any future earnings for reinvestment in our growingbusiness.Any future determination to pay dividends will also be at the discretion of our board of directors and willbe dependent upon our results of operations and cash flows,our

290、financial position and capital requirements,generalbusiness conditions,legal,tax,regulatory and any contractual restrictions on the payment of dividends,and anyother factors our board of directors deems relevant.Stock Performance GraphThis stock performance graph shall not be deemed soliciting mater

291、ial or to be filed with the SEC for purposesof Section 18 of the Securities Exchange Act of 1934,as amended(the Exchange Act),or otherwise subject to theliabilities under that Section,and shall not be deemed to be incorporated by reference into any filing of BeaconRoofing Supply,Inc.under the Securi

292、ties Act of 1933,as amended,or the Exchange Act.The performance of BeaconRoofing Supply,Inc.s common stock depicted in the stock performance graph represents historical results only andis not necessarily indicative of future performance.The following graph compares the cumulative total shareholder r

293、eturn on Beacon Roofing Supply,Inc.s commonstock(based on market prices)for the last five fiscal years with the cumulative total return on(i)the Nasdaq Indexand(ii)the S&P 1500 Trading Companies&Distributors Index,assuming a hypothetical$100 investment in eachon September 30,2014 and the re-investme

294、nt of all dividends.The closing price of our common stock onSeptember 30,2020,was$31.07.BaseINDEXED RETURNSPeriodYears Ended September 30,Company/Index9/30/201520162017201820192020Beacon Roofing Supply,Inc.100129.49157.74111.39103.2095.63Nasdaq Index100116.42144.00180.24181.19255.40S&P 1500 Trading

295、Companies&Distributors Index100117.63133.72184.24169.07209.03Comparison of Cumulative Five Year Total Return$300$250$200$150$100$50$09/30/159/30/169/30/17Beacon Roofing Supply,Inc.Nasdaq IndexS&P 1500 Trading Companies&Distributors Index9/30/189/30/199/30/2023ITEM 6.SELECTED FINANCIAL DATAYou should

296、 read the following selected financial information together with our financial statements and related notes and“Managements Discussion and Analysis of Financial Condition and Results of Operations”also included in this Form 10-K.We have derived the statement of operations data for the years ended Se

297、ptember 30,2020,2019,and 2018,and the balance sheet data as of September 30,2020 and 2019,from our audited financial statements included in this Form 10-K.We have derived the statements of operations data for the years ended September 30,2017 and 2016,and the balance sheet data as of September 30,20

298、18,2017,and 2016,from our audited financial statements not included in this Form 10-K.Consolidated Statement of Operations DataThe following table presents selected statement of operations data for the periods presented(in millions,except per share data):Year Ended September 30,2020 2019 2018 2017 2

299、016 Net sales$6,943.9$7,105.2$6,418.3$4,376.6$4,127.1 Cost of products sold 5,244.7 5,368.6 4,825.0 3,300.7 3,114.0 Gross profit 1,699.2 1,736.6 1,593.3 1,075.9 1,013.1 Operating expense 1,664.1 1,588.8 1,388.7 859.8 808.1 Income(loss)from operations 35.1 147.8 204.6 216.1 205.0 Interest expense,fin

300、ancing costs,and other 128.1 158.6 136.5 52.8 58.5 Loss on debt extinguishment 14.7 Income(loss)before provision for income taxes(107.7)(10.8)68.1 163.3 146.5 Provision for(benefit from)income taxes(26.8)(0.2)(30.5)62.4 56.6 Net income(loss)(80.9)(10.6)98.6 100.9 89.9 Dividends on preferred shares 2

301、4.0 24.0 18.0 Net income(loss)attributable to common shareholders$(104.9)$(34.6)$80.6$100.9$89.9 Weighted-average common stock outstanding:Basic 68.8 68.4 68.0 60.3 59.4 Diluted 68.8 68.4 69.2 61.3 60.4 Net income(loss)per share:Basic$(1.52)$(0.51)$1.07$1.67$1.51 Diluted$(1.52)$(0.51)$1.05$1.64$1.49

302、 Balance Sheet DataThe following table presents selected balance sheet data for the periods presented(in millions):September 30,2020 2019 2018 2017 2016 Cash and cash equivalents$624.6$72.3$129.9$138.3$31.4 Total assets 6,957.5 6,392.8 6,508.7 3,449.6 3,113.9 Total long-term indebtedness1 2,751.8 2,

303、586.6 2,606.1 750.2 1,117.7 Total stockholders equity 1,760.9 1,862.3 1,884.3 1,781.8 1,323.8 _1Net of debt issuance costs24Non-GAAP Financial MeasuresTo provide investors with additional information regarding our financial results,we prepare certain financialmeasures that are not calculated in acco

304、rdance with generally accepted accounting principles in the United States(GAAP),specifically:Adjusted Operating Expense.We define Adjusted Operating Expense as operating expense excludingthe impact of the adjusting items(as described below).Adjusted Net Income(Loss).We define Adjusted Net Income(Los

305、s)as net income(loss)excluding theimpact of the adjusting items(as described below).Adjusted EBITDA.We define Adjusted EBITDA as net income(loss)excluding the impact of interestexpense(net of interest income),income taxes,depreciation and amortization,stock-basedcompensation,and the adjusting items(

306、as described below).We use these supplemental non-GAAP measures to evaluate financial performance,analyze the underlying trends inour business and establish operational goals and forecasts that are used when allocating resources.We expect tocompute our non-GAAP financial measures consistently using

307、the same methods each period.We believe these non-GAAP measures are useful measures because they permit investors to better understandchanges over comparative periods by providing financial results that are unaffected by certain items that are notindicative of ongoing operating performance.While we

308、believe that these non-GAAP measures are useful to investors when evaluating our business,they are notprepared and presented in accordance with GAAP,and therefore should be considered supplemental in nature.Thesenon-GAAP measures should not be considered in isolation or as a substitute for other fin

309、ancial performancemeasures presented in accordance with GAAP.These non-GAAP financial measures may have material limitationsincluding,but not limited to,the exclusion of certain costs without a corresponding reduction of net income for theincome generated by the assets to which the excluded costs ar

310、e related.In addition,these non-GAAP financialmeasures may differ from similarly titled measures presented by other companies.Adjusting Items to Non-GAAP Financial MeasuresThe impact of the following expense(income)items are excluded from each of our non-GAAP measures(theadjusting items):Acquisition

311、 costs.Represents certain costs related to historical acquisitions,including:amortization ofintangible assets;professional fees,branch integration expenses,travel expenses,employee severanceand retention costs,and other personnel expenses classified as selling,general and administrative;andamortizat

312、ion of debt issuance costs.Restructuring costs.Represents costs stemming from headcount rationalization efforts and certaincosts of the Rebranding;accrued estimated costs related to employee benefit plan withdrawals;andamortization of debt issuance costs and loss on debt extinguishment.COVID-19 impa

313、ct.Represents costs directly related to our response to the COVID-19 pandemic;andincome tax provision(benefit)stemming from the revaluation of deferred tax assets and liabilitiesmade in conjunction with the Companys application of the CARES Act.Effects of tax reform.Represents income tax provision(b

314、enefit)related to the Tax Cuts and Jobs Act of2017.25The following table presents the impact and respective location of the adjusting items on our consolidatedstatements of operations for each of the periods indicated(in millions):Operating ExpenseNon-OperatingExpenseSelling,General andAdministrativ

315、eAmortizationInterestExpenseOther(Income)ExpenseIncomeTaxes1TotalYear Ended September 30,2020Acquisition costs2$9.6$178.4$8.1$(5.1)$191.0Restructuring costs32.3142.63.521.5169.9COVID-19 impact4.2(0.7)3.5Total adjusting items$16.1$321.0$11.6$16.4$(0.7)$364.4Year Ended September 30,2019Acquisition cos

316、ts$25.1$207.1$12.1$244.3Restructuring costs4.13.37.4Effects of tax reform(0.5)(0.5)Total adjusting items$29.2$207.1$12.1$3.3$(0.5)$251.2Year Ended September 30,2018Acquisition costs$54.4$141.3$24.8$220.5Restructuring costsEffects of tax reform(48.8)(48.8)Total adjusting items$54.4$141.3$24.8$(48.8)$

317、171.7_1For tax impact of adjusting items,see Adjusted Net Income(Loss)table below.2Other(Income)Expense includes a net$5.1 million refund received as the final true-up of the$164.0 million paymentresulting from the 338(h)(10)election made in connection with the acquisition of Allied Building Product

318、s Corp.on January 2,2018(the Allied Acquisition).3Amortization includes the impact of non-cash accelerated intangible asset amortization of$142.6 million related to the write-off of certain trade names in connection with the Rebranding.Other(Income)Expense includes a loss on debt extinguishmentof$14

319、.7 million in connection with the October 2019 debt refinancing.Adjusted Operating ExpenseThe following table presents a reconciliation of operating expense,the most directly comparable financial measureas measured in accordance with GAAP,to Adjusted Operating Expense for each of the periods indicat

320、ed(inmillions):Year Ended September 30,202020192018Operating expense$1,664.1$1,588.8$1,388.7Acquisition costs(188.0)(232.2)(195.7)Restructuring costs(144.9)(4.1)COVID-19 impact(4.2)Adjusted Operating Expense$1,327.0$1,352.5$1,193.0Net sales$6,943.9$7,105.2$6,418.3Operating expense as%of sales24.0%22

321、.4%21.6%Adjusted Operating Expense as%of sales19.1%19.0%18.6%26Adjusted 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(i

322、n millions):Year Ended September 30,2020 2019 2018 Net income(loss)$(80.9)$(10.6)$98.6 Adjusting items:Acquisition costs 191.0 244.3 220.5 Restructuring costs 169.9 7.4 COVID-19 impact 3.5 Effects of tax reform (0.5)(48.8)Total adjusting items 364.4 251.2 171.7 Less:tax impact of adjusting items1(93

323、.4)(64.4)(63.6)Total adjustments,net of tax 271.0 186.8 108.1 Adjusted Net Income(Loss)$190.1$176.2$206.7 _1Amounts represent tax impact on adjustments that are not included in our income tax provision(benefit)for the periods presented.The effective tax rate applied to these adjustments is calculate

324、d by using forecasted adjusted pre-tax income while factoring in estimated discrete tax adjustments for the fiscal year.The tax impact of adjustments for the years ended September 30,2020,2019 and 2018 were calculated using a blended effective tax rate of 25.6%,25.6%and 37.0%,respectively.Adjusted E

325、BITDAThe 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(in millions):Year Ended September 30,2020 2019 2018 Net income(loss)$(80.9)$(10.6)$98.6 Inter

326、est expense,net 138.5 160.2 143.1 Income taxes(26.8)(0.2)(30.5)Depreciation and amortization 391.1 277.8 201.5 Stock-based compensation 17.2 16.3 16.5 Acquisition costs1 4.5 25.1 54.4 Restructuring costs1 23.8 7.4 COVID-19 impact1 4.2 Adjusted EBITDA$471.6$476.0$483.6 Net sales$6,943.9$7,105.2$6,418

327、.3 Net income(loss)as%of sales(1.2%)(0.1%)1.5%Adjusted EBITDA as%of sales 6.8%6.7%7.5%_1Amounts represent adjusting items included in selling,general,and administrative expense and other income(expense);remaining adjusting items balances are embedded within the other balances reported in this table.

328、27ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONSThe following discussion and analysis should be read in conjunction with our consolidated financial statements andrelated notes and other financial information appearing elsewhere in this Annual Report on For

329、m 10-K.Allreferences to 2020,2019 and 2018are referring to the twelve-month period ended September 30 for each ofthose respective fiscal years.This section of this Annual Report on Form 10-K generally discusses 2020 and 2019items and year-to-year comparisons between 2020 and 2019.Discussions of 2018

330、 items and year-to-yearcomparisons between 2019 and 2018 that are not included in this Form 10-K can be found in Part II,Item 7,Managements Discussion and Analysis of Financial Condition and Results of Operations in our Annual Reporton Form 10-K for the year ended September 30,2019.The following dis

331、cussion may contain forward-lookingstatements that reflect our plans and expectation.Our actual results could differ materially from those anticipatedby these forward-looking statements due to the factors discussed elsewhere in this Annual Report on Form 10-K,particularly in the Risk Factors section

332、.We do not undertake,and specifically disclaim,any obligation to updateany forward-looking statements to reflect the occurrence of events or circumstances after the date of suchstatements except as required by law.OverviewBeacon is the largest publicly traded distributor of roofing materials and com

333、plementary building products in theUnited States and Canada.We are among the oldest and most established distributors in the industry,providinghigh-quality exterior and interior products to the building industry.Our customers rely on us for local access to thebuilding products and services they need to operate their businesses and serve their clients.On January 15,2020,we announced the rebranding