1、ANNUAL REPORT2017CORPORATE PROFILEBeacon Roofing Supply,Inc.has grown to become the largest publicly traded distributor of roofing materials and complementary building products in the United States and Canada.We serve over 70,000 customers and have over 50,000 SKUs available across our branch networ
2、k.1 We originated with Beacon Sales Company,founded in Charlestown,Massachusetts in 1928.Our people are supported by a strong,values-oriented corporate culture.CELEBRATING OUR 90th YEAROur local branches stock a comprehensive product linethat caters to the local market.In addition to residentialand
3、commercial roofing,our extensive complementaryproduct categories include windows,siding,decking,doors,waterproofing and other exterior products.Beacon proudlydistributes the roofing and complementary products of brand-name manufacturers.These manufacturers understand thatour branch staffs expertise
4、and quality service will ensure thesuccessful application of their premium products.Our knowledgeable and experienced sales and marketing team includes outside sales and business development specialists,inside sales/customer service representatives,manufacturer/architectural representatives and prod
5、uct specialists.Contractors trust the product knowledge and application expertise of our staff.They rely on this expertise,along with on-time delivery and product availability,to deliver successful,profitable and on-time projects.National customers also rely on our local branch expertise and service
6、.As a result,successfulpartnerships that go beyond the industry norm are formed between our dedicated Beacon branch teams and our customers.We have grown through strategic acquisitions,the opening of new greenfield branches,and the expansion of product andservice offerings in our branches.Our busine
7、ss is well-balanced,with non-discretionary re-roofing applications as well as new construction and remodeling in the residential and commercial roofing and complementary exterior markets.We have a strong foundation for continued growth based on a highly scalable platform,a proven business model,resu
8、lts-oriented management,a strong people-focused corporate culture,and a company-wide enterprise resource planning system.2 2017 Annual ReportRESIDENTIAL|COMMERCIAL|COMPLEMENTARYSkylightsRoofing Asphalt,Metal,Slate,Tile,Composite,Ventilation,AccessoriesRoofing EPDM,TPO,PVC,Built Up,Single Ply,Metal,A
9、sphalt,Garden,Ventilation,UnderlaymentsWindows Wood,Vinyl,Aluminum,Replacement&New ConstructionRoof Insulation Tapered Panels,Fiberboard,Nailboard,PolyisoGutters Aluminum,CopperMetals Systems,Components,AccessoriesSiding Vinyl,Fiber Cement,AluminumAir&Vapor BarriersFascia Fiber Cement,AluminumBelow
10、Grade Waterproofing Sheet&Liquid Membranes,SealantsDeck&Railing Composite,VinylBelow Grade Drainage SystemsDoors Exterior&Patio DoorsConcrete Sealers&Coatings Pedestrian&Vehicular Deck CoatingsColumns Wood,Aluminum&FiberglassGround Barriers Vapor Barriers,Radon Barriers,Pond LinersCOMMERCIAL FOCUSED
11、RESIDENTIAL FOCUSED3 FINANCIAL SUMMARY$4.38 BillionRecord Net SalesFiscal year 2017 produced a second consecutive year of record net sales,Adjusted EBITDA and Adjusted EPS.Our residential roofing product line net sales grew 8.7%compared to 2016 and recorded its 14th consecutive quarterof sales growt
12、h in Q4 2017,remaining our strongest performingsector.Our commercial roofing product line net salesdecreased slightly year-over-year,and our complementaryproduct line posted a 7.3%daily sales increase,the resultof Beacons targeted efforts and solid underlying end market trends.Our 2017 gross margin
13、percentage finishedabove robust 2016 levels and represented our best annualperformance as a public company ever.Total Assets(In billions)Net Sales(In billions)Adjusted EBITDA(In millions)Total Stockholders Equity(In billions)Net Income(In millions)Income from Operations(In millions)$1.54$3.11$3.45$2
14、.52$4.13$4.38$0.88$1.32$1.78$62.3$89.9$100.9$117.1$205.0$216.1$168.7$347.4$364.4FY2015FY2016FY2017$100.9 MillionRecord Net Income4 2017 Annual Report2017 GROWTH HIGHLIGHTSCompleted 5Acquisitions+3.4%TotalSame Day GrowthAdded 23BranchesAdded 4$137 MillionIn Annual Net SalesA MILESTONE ACQUISITIONFY16
15、 Sales of$2.6 Billion208 branch locations across 31 statesAllied is one of the countrys largest exterior and interior building product distributors Announced 8/24/2017Closed1/2/2018Beacon presence in all 50 U.S.statesTransformational Combination of Two Leading Building Materials DistributorsImproved
16、 Scale and Positioning in Fragmented Exterior Products DistributionEnhanced Geographic Footprint in Attractive Areas Where Beacon is UnderrepresentedDiversification into Adjacent Interior Products Distribution Opens New Avenues for Growth1234The acquisition of Allied is well aligned with Beacons str
17、ategic priorities:ACQUISITIONORGANICGreenfields5 Beacon achieved many great accomplishments in fiscal year 2017.For the second year in a row,we delivered record financial results and continued growth,both organically and through strategic acquisitions.Most significantly,on August 24,2017,we announce
18、d our acquisition of Allied Building Products,which we completed on January 2,2018.The addition of Allied strengthens Beacons position as the largest publicly traded wholesale roofing and building materials distributor in the United States and Canada,and significantly expands Beacons geographic foot
19、print in New York,New Jersey and other major U.S.markets.Allied also provides for Beacons entry as a major supplier into the interior building products market,and we are very excited about the expansion of Beacons product offering.Our fiscal year 2017 net sales were$4.38 billion,a record high and a6
20、%increase compared to 2016.This solid growth reflects a daily sales increase of 3.4%within our existing markets and continued contributionsfrom the 13 acquisitions that were completed during fiscal years 2016 and2017.Organic net sales growth on a same-day basis increased 6.8%and7.3%within our reside
21、ntial and complementary product lines,respectively,and commercial organic net sales were down slightly year-over-year.Net income for fiscal year 2017 was$100.9 million,another record year.Earnings Per Share(EPS)increased to$1.64 from$1.49 in the prioryear,and Adjusted EPS increased to$2.18 from$2.10
22、.Our strong 2017 performance benefited from positive net sales growth,coupled with solidcost controls and our highest-ever overall gross margin percentage as apublic company.Company-wide operating margins continued to benefitfrom realized cost synergies related to recent acquisitions.During fiscal y
23、ear 2017,we concentrated on the key drivers that support ourgrowth strategy:acquisitions,new branch openings,and organic growthwithin our existing branches.The five companies we acquired in fiscal year2017 added a combined net sales run-rate of approximately$137 million andshowcase the diverse scope
24、 of our acquisition strategy.DEAR SHAREHOLDERS&FRIENDSAs we look ahead to fiscal year 2018,we believe that theeconomic backdrop remains favorable,as single-family housing starts,commercial construction activity,and existinghome sales are all projected to increase.The impact from the2017 hurricane se
25、ason should create additional demand forresidential roofing and other construction products in fiscal year2018 and beyond,particularly in Florida and Texas.Re-roofingremains the key demand driver for our industry,and we foreseesteady improvement in this non-discretionary area.Throughthe combination
26、of a favorable economic backdrop,our internalgrowth initiatives and cost controls,and the tremendousbenefits we anticipate from Allieds integration into Beacon,weanticipate another year of positive organic growth in fiscal year2018 and strong financial performance for our shareholders.The future nev
27、er has been brighter for Beacon,and we thankyou for your continued support.PAUL M.ISABELLAPresident and CEOROBERT R.BUCKChairmanLowrys represented a platform-building acquisition within the waterproofing product adjacency,a similar approach weutilized for insulation with the Roofing&Insulation Suppl
28、y(RIS)purchase in fiscal year 2016.We also completed complementaryproducts-driven transactions with BJ Supply,Eco Insulation Supply and Acme Building Materials.Finally,we purchased American Building&Roofing,a business operating seventraditional roofing supply branches in the state of Washington.Duri
29、ng the past two years,we have made tremendous strides in the Pacific Northwest market,going from zero branches to 14 locations across Oregon and Washington.We also opened four new branches in 2017,and over the past five years,have opened 43 greenfield locations.This strategy remains an important ele
30、ment of our growth,and we will continue to utilize this lever as a complement to our acquisition plans.During fiscal year 2017,we bolstered our organic growthinitiatives,gaining market penetration within complementaryproducts and our private label product offering.We alsoenhanced our focus on growin
31、g national accounts andincreasing our two-step/lumberyard business.Beacon also made great strides in fiscal year 2017 to becomeour industrys technology leader.We continued investing in ourCRM system to help raise the effectiveness of our sales force,and enhanced our e-commerce platform,Beacon Pro+,w
32、hichprovides customers 24/7 online access.These tools shouldhelp Beacon become an even stronger business partner to ourcustomers and drive share gain across all product categories.6 2017 Annual ReportThrough the combination of a favorable economic backdrop,our internal growth initiatives and cost co
33、ntrols,and the tremendous benefits we anticipate from Allieds integration into Beacon,we anticipate another year of positive organic growth in fiscal year 2018 and strong financial performance for our shareholders.UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549FORM 10-K?ANNUAL R
34、EPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES AND EXCHANGE ACT OF 1934For the Fiscal Year Ended September 30,2017?TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF1934For the Transition Period from to Commission File Number 000-50924(Exact name of registrant
35、 as specified in its charter)Delaware36-4173371(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)Address of principal executive offices:505 Huntmar Park Drive,Suite 300,Herndon,VA 20170 Registrants telephone number,including area code:(571)323-3939 Secu
36、rities registered pursuant to section 12(b)of the Act:Common Stock,$0.01 par valueThe NASDAQ Global Select Market(Title of each class)(Name of each exchange on which registered)Securities registered pursuant to section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known sea
37、soned 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 f for Section 15(d)of the Act.Yes?No?Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section
38、13 or 15(d)of the Securities and Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes?No?Indicate by check mark whether the registrant has subm
39、itted electronically and posted on its corporate Web site,if any,every Interactive DataFile required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post
40、 such files).YES?NO?Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and wtill not be contained,to the best of Registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of thisForm
41、 10-K or any amendment to this Form 10-K.?Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reportingcompany,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller repo
42、rting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer?Accelerated filer?Non-accelerated filer?(do not check if a smaller reporting company)Smaller reporting company?Emerging growth company?If an emerging growth company,indicate by check mark
43、 if the registrant has elected not to use the extended transition period for complyingf fwith any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act?Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Excha
44、nge Act).Yes?No?The aggregate market value of the voting stock(common stock)held by non-affiliates of the registrant,computed by reference to the closing price at which the common stock was sold as of the end of the second quarter ended March 31,2017,was$2.96 billion.The number of shares of common s
45、tock outstanding as of October 31,2017 was 67,734,465.2DOCUMENTS INCORPORATED BY REFERENCEThe information required by Part III(Items 10,11,12,13 and 14)will be incorporated by reference from the Registrants definitive proxystatement,which will be filed pursuant to Regulation 14A with the United Stat
46、es Securities and Exchange Commission(“SEC”)within 120 days after the end of the fiscal year to which this report relates.3BEACON ROOFING SUPPLY,INC.Index to Annual Report on Form 10-KYear Ended September 30,2017PagePART I5Item 1.Business5Item 1A.Risk Factors15Item 1B.Unresolved Staff Comments22Item
47、 2.Properties22Item 3.Legal Proceedings24Item 4.Mine Safety Disclosures24PART II25Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchasesof Equity Securities25Item 6.Selected Financial Data27Item 7.Managements Discussion and Analysis of Financial Condition and Re
48、sults of Operations30Item 7A.Quantitative and Qualitative Disclosures About Market Risk48Item 8.Financial Statements and Supplementary Data49Item 9.Changes In and Disagreements with Accountants on Accounting and Financial Disclosure50Item 9A.Controls and Procedures50Item 9B.Other Information53PART I
49、II54PART IV54Item 15.Exhibits and Financial Statement Schedules54Item 16.10-K Summary 574FORWARD-LOOKING STATEMENTSThe matters discussed in this Form 10-K that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties,which could cau
50、se actual results to differ materially from the results expressed in,or implied by,these forward-looking statements.These statements can beidentified by the fact that they do not relate strictly to historical or current facts.They use words such as“aim,”“anticipate,”“believe,”“could,”“estimate,”“exp
51、ect,”“intend,”“may,”“plan,”“project,”“should,”“will be,”“willcontinue,”“will likely result,”“would”and other words and terms of similar meaning in conjunction with a discussionof future operating or financial performance.You should read statements that contain these words carefully,because they disc
52、uss our future expectations,contain projections of our future results of operations or of our financial position for state other“forward-looking”information.We believe that it is important to communicate our future expectations to our investors.However,there are events in the future that we are not
53、able to accurately predict or control.The factors listed under Item 1A,Risk Factors,as well as any cautionary language in this Form 10-K,provide examples of risks,uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking
54、statements.Although we believe that our expectations are based on reasonable assumptions,actual results may differ materially from those in the forward looking statements as a result of various factors,including,but not limited to,those described under Item 1A,Risk Factors and elsewhere in this Form
55、 10-K.Forward-looking statements speak only as of the date of this Form 10-K.Except as required under federal securities laws and the rules and regulations of the SEC,we do not have any intention,and do not undertake,to updateany forward-looking statements to reflect events or circumstances arising
56、after the date of this Form 10-K,whether as a result of new information,future events or otherwise.As a result of these risks and uncertainties,readers are cautioned not to place undue reliance on the forward-looking statements included in this Form 10-K or that may be made elsewhere from time to ti
57、me by or on behalf of us.All forward-lookiyng statements attributable to us areexpressly qualified by these cautionary statements.5PART 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
58、 largest publicly traded distributor of residential and non-residential roofing materials in the United States and Canada.We also distribute complementary building products,including siding,windows,specialty exterior building products,insulation,and waterproofing systems for residential and non-resi
59、dential building exteriors.We purchase products from a large number of manufacturers and then distribute these goods to a customer a abase consisting of contractors,and to a lesser extent,general contractors,home builders,retailers,and building materials suppliers.As of September 30,2017,we operated
60、 383 branches in 48 states throughout the United States and 6provinces in Canada.We stock one of the most extensive assortments of high quality branded products in the industry,with over 50,000 SKUs available across our branch network,enabling us to deliver products to serve over 70,000 customers on
61、 a timely basis.On October 1,2015,we acquired Roofing Supply Group,LLC(“RSG”),a leading roofing products distributor headquartered in Dallas,Texas,for approximately$1.17 billion.RSG operated 85 locations across 25states,including the key markets of California,Florida,Texas,as well as the Pacific Nor
62、thwest.On August 24,2017 the Company entered into a definitive purchase agreement to acquire,for approximately$2.625 billion,all of the issued and outstanding shares of capital stock of Allied Building Products Corp.and an affiliated entity(together with its and their respective subsidiaries,“Allied
63、”)on the terms and subject to the conditions set forth in the Stock Purchase Agreement(the“Allied Acquisition”).Allied is one of the countrys largest exterior and interior building products distributors and is headquartered in East Rutherford,New Jersey.Allied distributesproducts across 208 location
64、s in 31 states and has a strong presence in New York,New Jersey,Florida,California,Hawaii and the upper Midwest.The Allied Acquisition is expected to close on January 2,2018,subject to the satisfaction of customary closing conditions.For the fiscal year ended September 30,2017(“fiscal year 2017”or“2
65、017”),residential roofing productscomprised 54.4%of our sales,non-residential roofing products accounted for 29.1%of our sales,and complementary d dproducts provided the remaining 16.5%of our sales.Approximately 96%of our net sales were to customers located in the United States.We provide our custom
66、ers with a comprehensive array of value-added benefits.These services and tools arefocused on supporting the entire lifecycle of our contactors business,with particular focus on enhancing their ability to meet and exceed the needs of their customers(see“Our Products and Services”for a full listing).
67、We believe the additional services we provide strengthen our relationships with our customers and distinguish us from our competition,as the vast majority of orders require at least some of these services.Our ability to provide these servicesefficiently and reliably can save contractors time and mon
68、ey while also enabling us to achieve attractive gross profit margins on our product sales.We have earned a reputation for providing a high level of product availability and high-quality service from our experienced employees who provide timely,accurate and safe delivery of products.Our customer base
69、 includes a diverse population of residential and non-residential roofing contractors from the markets in which we operate.Along with new construction projects,these local roofing contractors are typicallyinvolved in the replacement,or re-roofing,component of the roofing industry.We utilize a branch
70、-based operating model that allows branches to maintain local customer relationships and benefit from our centralized infrastructure.This operating model allows us to benefit from the resources and scale efficienf fcies of being a national distributor while still providing customers with specialized
71、 products and personalized local services tailored to their specific geographic region.6We have achieved our growth through a combination of 43 strategic and complementary acquisitions since our initial public offering(“IPO”)in 2004,opening new branch locations and broadening our product offerings.I
72、nfiscal year 2017,we acquired 23 branches and opened 4 new branches.We have grown from$652.9 million in net sales in fiscal year 2004 to$4.38 billion in net sales in fiscal year 2017,which represents a thirteen-year compound annual growth rate(“CAGR”)of 15.8%.Our organic growth,which includes growth
73、 from existing and newly openedbranches but excludes growth from acquired branches,averaged a CAGR of 5.1%per annum over the same period.Acquired branches are excluded from organic growth measures until they have been under our ownership for at least four full fiscal quarters at the start of the rep
74、orting period.Since our IPO,we have opened 78 new branch locations,and during this same period existing market sales excluding greenfields increased at an average of 2.3%per annum.Existing market sales excluding greenfields are defined as the aggregate sales from branches open for the entire compara
75、ble annual periods.Income from operations has increased from$34.7 million in fiscal year 2004 to$216.1million in fiscal year 2017,which represents a thirteen-year CAGR of 15.1%.We believe that our proven businessmodel can continue to deliver industry-leading growth and operating profit margins.Our I
76、ndustryBased on managements estimates,we believe that the roofing distribution market in the United States and Canada represents approximately$26 billion in revenue with roughly 60-65%of the market in residential roofing and 35-40%in commercial.We also participate in several other areas of the build
77、ing products market within our complementary product line,including siding,windows,insulation and waterproofing,among others.We believe the majority of roofing demand is driven by re-roofing activity(estimyated at 80-90%),with theremaining balance being tied to new construction.Re-roofingprojects ar
78、e considered to be necessary maintenance and repair expenditures,and are therefore less likely to be postponed during periods of recession or slower economicgrowth.As a result,demand for roofing products historically has been less volatile than overall demand for construction products.Net sales from
79、 re-roofing are also expected to increase as the median age of owner occupied housing hasincreased from 31 years to 37 years over the last decade,according to U.S.Census data.As homes age,re-roofingdemand increases,and home-owners are forced to replace or repair old,deteriorating roofs.During the pa
80、st decade,re-roofing demand also has been influenced in part by existing home sales trends.Lower housing turnover during the 2007-2015 years,in particular,has resulted in many homeowners deferral of necessary re-roofing decisions.Thiscombination of aging U.S.housing inventory,more favorable trends i
81、n existing home sales,and deferred re-roofing amid the housing downturn supports a favorable supply/demand dynamic in the residential repair and remodel market a ain the coming years.Regional variations in economic activity influence thelevel of demand for roofing products across the United States.O
82、f particular importance are regional differences in the level of new home construction and renovation.Demographic trends,including population growth and migration,contribute to the regional variations through their influence on regional housing starts and existing home sales.In addition to our domes
83、tic operations,we also operate in 6 provinces across Canada.These internationallocations represented approximately 4%of our total net sales for the fiscal year ended September 30,2017.We expect overall demand for operations in Canada to grow at rate similar to our United States operations.tRoofing D
84、istributorsWholesale distribution is the primary distribution channel for both residential and commercial roofingproducts.Wholesale roofing product distributors serve the important role of facilitating the purchasing relationshipsbetween roofing materials manufacturers and thousands of contractors.W
85、holesale distributors can maintain localized inventories,extend trade credit,give product advice and provide delivery and logistics services.d dDespite some recent consolidation,the roofing materials distribution industry remains highly fragmented.The industry is characterized by several“national”di
86、stributors and a large number of local and regional participants.The vast majority of our competition continues to comes from these smaller,localized roofing supply distributors,and,to a much lesser extent,other building supply distributors and big box retailers.7Residential RoofingRe-roofing is lar
87、gely a non-discretionary decision for homeowners.However,prevailing housing market conditions and severe storm activity can influence the precise timing involved.Specifically,we believe housing yturnover can impact certain homeowners re-roofing decisions.Increases in single-family existing home sale
88、s duringfiscal 2015-2017,coupled with more active storm related roofing demand in 2016 and 2017,have boosted industry re-roofing activity during recent years.This contrasts with the period of stagnant re-roofing demand that wasexperienced from 2007-2014 during the housing downturn and early into its
89、 recovery.Within the new construction portion of the residential roofing market,growth historicf fally has been driven by housing starts,and in particular,by single-family home construction.According to the U.S.Census Bureau,single-family starts peaked at 1.7 million homes in 2005 and troughed at 0.
90、4 million homes in 2011.Housing startshave recovered steadily since 2011 and have reached 0.8 million in 2016.The Mortgage Bankers Association(MBA)economic forecast projects single-family starts will finish 2017 with a 7%gain compared to 2016 and see 8%-9%increases in both 2018 and 2019.Non-resident
91、ial RoofingAs with residential re-roofing,non-residential re-roofing activity tends to be less cyclical than new construction and depends,in part,upon the types of materials on existing roofs,their expected lifespan and interveningfactors such as wind or water damage.In contrast to residential roofi
92、ng,we do not believe economic driven re-roofing project deferrals have been as common for the non-residential product line.The non-residential roofing market primarily consists of office,retail,industrial and institutional buildings.According to the 2018 Dodge Construction Outlook,U.S.construction s
93、tarts will increase 3%in 2018following expected gains of 4%in 2017 and 5%in 2016.Commercial buildings are expected to see a 2%increase,while institutional buildings should see a 3%increase in construction during 2018.Complementary Building ProductsDemand for complementary building products such as s
94、iding,windows and doors,and insulation for both the residential and non-residential markets has been at historically low levels in recent years,consistent with the downturns in the new construction markets and in the overall economy.Unlike the roofing industry,demand for these products is more discr
95、etionary and significantly influenced by new construction markets and the pace of overall residential remodeling activity.According to the Joint Center for Housing Studies at Harvard University,its Leading Indicator of Remodeling Activity(LIRA)is calling for accelerating growth rates in U.S.remodeli
96、ng activity throughout calendar year 2018 with anticipated growth rate of 7.7%by the third quarter.As mentioned above,the outlook for new home construction is also projected to see solid growth in the coming years.Our StrengthsWe believe the sales and earnings growth we have achieved over time has b
97、een,and will continue to be,t tdriven by our primary competitive strengths,which include the following:?Leading roofing distribution platform with a national scope combined with regional expertise.We are the largest publicly traded distributor of residential and non-residential roofing materials in
98、theUnited States,and we maintain leading positions in key metropolitan markets across the United Statesand Canada.Our geographic footprint is designed to provide advantages in the regional markets we serve.We utilize a branch-based operating model whereby branches cultivate and maintain localcustome
99、r relationships while benefiting from centralized functions such as information technology,marketing,accounting,financial reporting,credit,purchasing,human resources,legal and tax services.We provide our customers with specialized products and personalized local services tailored to their specific g
100、eographic region,with the resources and scale efficiencies of a national distributor.8?Diversified business model in a stable environment.Our business historically has been protected in times of economic downturn because of the non-discretionary nature of most re-roofing demand,the mixof our sales b
101、etween residential and non-residential products,our geographic and customer diversity,and the financial and operational ability to expand our business and obtain market share.We have a long history of organic sales growth and healthy gross margins through a variety of economic cycles.Over the last t
102、hirteen fiscal years,our total and existing market net sales have increased by a CAGR of 15.8%and 5.1%,respectively,(including growth through acquisitions)and our gross margins in existing markets(i.e.,excluding acquisitions)have averaged approximately 24%.?Well-positioned in attractive roofing dema
103、nd markets.We believe that our national distribution platform is strategically positioned to continue benefitting from the North American market recovery,and we expect that improving economic conditions and continued recovery in residential and non-residential construction activity will drive the de
104、mand for additional roofing materials and complementary building products.?Superior customer service to our well established,long-term customer base.Our diverse customer baseconsists of contractors,home builders,building owners,and other resellers.A significant number of our customers have relied on
105、 us as their vendor of choice for decades,and we believe that these strongcustomer relationships cannot be easily replicated.For the fiscal year ended September 30,2017,no single customer accounted for more than 2%of our net sales.We believe that the services provided by our employees improve our cu
106、stomers efficiency and profitability,which,in turn,strengthens our customer relationships.We consider customer relations and our employees knowledge of roofing and exterior building materials as being vital to our ability toincrease customer loyalty and maintain customer satisfaction.We invest signi
107、ficant resources inprofessional development,management skills,product knowledge and operational proficiency.Thein-depth knowledge of the materials we sell and their applications allows our sales personnel to provide rtechnical advice and value-added service to our customers throughout the constructi
108、on process.u uWe provide a number of value-added services to our customers.In particular,we support our customerswith:advice and assistance on product identification,specification and technical support;timely job sitedelivery,rooftop loading and logistical services;tapered insulation design and rela
109、ted layout services;metal fabrication and related metal roofing design and layout services;trade credit;and marketingsupport,including project leads for contractors.?Strong platform for growth and acquisition.From the time of our IPO in 2004,we increased net sales at rates well above the overall gro
110、wth in the roofing materials distribution industry.We have expanded our business through strategic acquisitions,new branch openings,and the diversification of our product offering.We generally have improved the financial and operating performance of our acquired companies and helped them to grow the
111、ir businesses following acquisition.?Strong cash flow generation driven by a stable business model.We have increased net sales in eight of the last ten fiscal years,including increases in each of the last seven consecutively.Our track record of growth,combined with limited capital expenditure requir
112、ements,has resulted in strong free cash flow across all economic cycles.We have a strong history of managing our debt leverage effectively and we fhave successfully reduced leverage subsequent to the RSG transaction.u?Centralized IT platform.We have made a significant investment in our informationts
113、ystems,includingthe ongoing development of a platform for online sales.All of our locations,except for one fabricationfacility,operate on the same management information systems,providing us with a consistent platform to deliver excellent customer service and achieve operating efficiencies in purcha
114、sing,pricing and inventory management.Our systems have substantial capacity to handle our future growth plans without a arequiring significant additional investment.?Industry-leading management team with a track record of integration.We believe that our key employees,including branch managers,region
115、al vice presidents and executive officers,are among the9most experienced members of the roofing industry and have a track record of achieving strong revenue growth and delivering profitability.Since Beacon became a publicly traded company in 2004,the Beacon management team has successfully completed
116、 and integrated 43 acquisitions and opened 78 newgreenfield locations.Our Growth StrategiesOur objective is to be the preferred supplier of roofing and other complementary building product materials across markets in the United States and Canada while continuing to increase net sales and maximize ou
117、r profitability.We plan to attain these goals by executing the following strategies:?Expand product offering and increase cross-selling activities.Due to the unique characteristics of eachgeographic region,our local customers typically require market specific product offerings.We believe we have one
118、 of the most extensive offerings of high-quality branded products in the industry,with over 50,000 SKUs available across our branch network,however there remain opportunities for branches toexpand their current product rosters.This will create additional opportunities for our branches to cross-sell
119、more products throughout our existing network.In particular,we seek to expand non-residential roofing sales into markets where we currently sell mostly residential roofing.In addition,we work closely with customers and suppliers to identify new products and services,and continue to expand our produc
120、t offering to include complementary building materials such as windows,siding,doors,waterproofing systems,insulation and metal fabrication.?Continue to provide exceptional customer service and roofing expertise.We provide a comprehensive array of high-quality products and offer value-added services.
121、In fiscal year 2017,we were able to support our customers by fulfilling approximately 97%of warehouse orders through our in-stock inventory as a result of the breadth and depth of the inventory maintained at our local branches.We believe that our focus on providing both value-added services and accu
122、rate and rapid order fulfillment enables us to attract and retain customers.?Selectively pursue opportunities for organic growth and strategic acquisitions.Acquisitions and greenfield expansion is an important component of our growth strr rategy.We believe that there will bemeaningful opportunities
123、to further expand or intensify our geographic focus in contiguous or existing regions.We intend to continue to pursue our growth strategy while focusing on maintaining a strong balance sheet.Since 2004,Beacon has opened 78 new branches through greenfield expansion.Beacon has a disciplinedapproach to
124、 new branch openings and its typical strategy is to open branches:(1)within its existing markets;(2)where existing customers have expanded into new markets;or(3)in areas that have limited or no acquisition candidates and are a good fit with its business model and culture.Since 2004,Beacon has comple
125、ted 43 acquisitions.We believe that the roofing distribution sector remains fragmented and that there are significant opportunities to further grow our business through disciplined,strategic acquisitions.With only a few large,well-capitalized competitors in the industry,we believe we can continue to
126、 build on our distribution platform by successfully acquiring additionalroofing materials distributors.Our main acquisition strategy is to target market leaders in geographic areas that we do not service or that complement our existing operations in an area.?Enhance margins and free cash flow genera
127、tion through continued execution of our growth strategy.We believe that as recent greenfield locations continue to ramp up,and if expected synergies and cost n nsavings from acquisitions are realized,our margins will continue to improve.We also believe that we have an operating model that requires m
128、inimal capital,which,when combined with stable re-roofing ddemand,will position us for strong free cash flow generation.We intend to continue to use cash flows tosupport deleveraging and our continued platform growth.We have,and will continue to,invest heavily in our branch expansion.Although manage
129、ment estimates that our branch expansion strategy over the past several years has resulted in above average upfront operating costs and capital expenditures,webelieve these new branches will increase their contribution to our profitability and cash flow as they mature.10 Our Products and ServicesPro
130、ductsThe ability to provide a broad range of products is essential to success in roofing materials distribution.We carry one of the most extensive arrays of high-quality branded products in the infdustry,enabling us to deliver a wide variety of products to our customers on a timely basis.We are able
131、 to fulfill the vast majority of our warehouse orders with inventory 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 complementarybuilding products,including:Product PortfolioReside
132、ntialNon-ResidentialComplementaryRoofing ProductsRoofing ProductsBuilding ProductsAsphalt shingles Single-ply roofingVinyl sidingSynthetic slate and tile AsphaltFiber cement sidingClay tile MetalStone veneerConcrete tile Modified bitumenWindowsSlate Build-up roofingDoorsNail base insulation Cements
133、and coatingsSkylightsMetal roofing Insulation flat stock&taperedWaterproofingFelts Commercial fastenersBuilding insulationSynthetic underlayment Metal edges and flashingsGutters and downspouts Wood shingles and shakes Smoke/roof hatchesDecking and railing Nails and fasteners Sheet metal(copper/alumi
134、num/steel)Air barrierMetal edgings and flashings Roofing toolsConcrete restoration systemsPrefabricated flashings PVC membraneSealantsRidge and soffit vents TPO membrane EPDM membraneOur product lines are designed to meet the requirements of residential and non-residential roofing contractorsas well
135、 as siding&insulation contractors.The products that we distribute are supplied by the industrys leading manufacturers of high-quality roofing materials,siding materials,insulation,windows,doors,decking and related products(See“Purchasing and Suppliers”).In the residential market,asphalt shingles com
136、prise the largest share of the products we sell.We distributeproducts such as high-end shingles,gutters and metal roofing products,and tile roofing.Additionally,we distribute downspouts,tools,nails,vinyl and fiber cement siding,windows,decking and related exterior shelter products to meet the expans
137、ive needs of our customers.In the non-residential market,single-ply roofing systems and the associated insulation products comprise thelargest share of our product offering.Our single-ply roofing systems consist primarily of Ethylene Propylene DieneMonomer(synthetic rubber)or“EPDM”and Thermoplastic
138、Olefin or“TPO”,along with other roofing materials and related components.In addition to the broad range of single-ply roofing components,we sell asphaltic membranes and the insulation required in most non-residential roofing applications,such as tapered insulation.Our remainingnon-residential produc
139、ts include metal roofing and flashings,fasteners,fabrics,coatings,roof drains,modified bitumen,built-up roofing and asphalt.11 Of all the complementary building products in our portfolio,vinyl and cement siding comprise the largest share of the products we sell.ServicesWe emphasize superior value-ad
140、ded services to our customers.We employ a knowledgeable sales force that possesses in-depth knowledge of roofing materials and applications and is capable of providing technical advice and assistance to contractors and other customers throughout the re-roofing and construction process.In particular,
141、wesupport our customers with the following value-added services:?advice and assistance on product identification,specification and technical support,and trainingservices;?a large,service ready fleet with a broad footprint supporting timely job site delivery,rooftop loading and logistical services;?t
142、apered insulation engineered with enhanced computer-aided design and related layout services;m m?metal fabrication and related metal roofing design and layout services;?access to Beacon Pro+,our e-commerce platform that provides customers with 24/7 online access;?trade credit and online bill pay;and
143、?marketing support,including project leads for contractors.Our CustomersWe serve over 70,000 customers,comprised of contractors,home builders,building owners,and other t tresellers across the continental United States and Canada.Our typical customer base varies by end market,withrelatively small con
144、tractors in the residential market and small to large-sized contractors in the non-residential market.To a lesser extent,our customer base in a market can include general contractors,retailers and building materials suppliers.A significant number of our customers have relied on us or our predecessor
145、s as their vendor of choice for decades,therefore we believe that we have strong customer relationships that our competitors cannot easily displace or replicate.No single customer accounts for more than 2%of our net sales.Our Culture and EmployeesWe believe that our values based culture is a key dif
146、ferentiator,which is critical to our success.We prideourselves on attracting and retaining highly dedicated and customer focused employees at all levels of the organization.We maintain a safety-first environment and strong relations with our employees.As of September 30,2017 we had 5,406 employees c
147、onsisting of 1,334 in sales and marketing,682 branchand assistant branch managers,2,666 drivers,delivery helpers and warehouse workers,680 general and administrativeemployees and 44 executives.We have 33 employees that are represented by labor unions and there are no outstanding labor disputes.Sales
148、 and MarketingSales strategyOur sales strategy is to provide a comprehensive array of high-quality products and superior value-added services to residential and non-residential roofing contractors reliably,accurately and on time.In fiscal year 2017,we were able to support our customers by fulfilling
149、 approximately 97%of warehouse orders at the time of invoice.This isa result of the breadth and depth of the inventory maintained at our local branches.We believe that our focus on providing superior value-added services and accurate and rapid order fulfillment enables us to attract and retainf fcus
150、tomers.12 Sales organizationWe have attracted and retained an experienced sales force that consisted of approximately 1,181 employeesas of September 30,2017 who are responsible for generating sales at the local branch level.The expertise of our salespeople helps us to increase sales to existing cust
151、omers and add new customers.Each of our branches is led by a branch manager,who also functions as the branchs sales manager.In addition,each branch generally employs one to four outside salespeople and one to five inside salespeople who report to their branch manager.Branches that focus primarily on
152、 the residential market typically staff a larger number of outside salespeople.The primary objectives of our outside salespeople are to increase sales to existing customers and prospect for new customers.These activities are supported by utilizing our CRM(Customer Relationship Management)system thro
153、ughout our selling organization.We continue to use our proprietary LogicTrack software system to extract u uinformation on construction projects in our local markets.Once a construction project is identified,members of our design and estimating team create job quotes,which,along with pertinent bid a
154、nd job information,are readily available to our salespeople through LogicTrack.Our outside salespeople then contact potential customers in an effort to solicit their interest in participating with us in the identified project.Throughout this process,LogicTrack maintainsa record of quoting activity,d
155、ue dates,and other data to allow tracking of the projects and efficient follow-up.By seeking a contractor to“partner with”on a bid,we increase the likelihood that such contractor will purchase their roofing materials and related products from us in the event that the contractor is selected for the p
156、roject.To complement our outside sales force,we have built an experienced and technically proficient inside salesstaff that provides vital product expertise to our customers.Our inside sales force is responsible for fielding incoming orders,providing pricing quotations and responding to customer inq
157、uiries.In addition to our outside and inside sales forces,we employ representatives who act as liaisons for certain roofing materials manufacturers to assist with the promotion of specific products to professional contractors,architects and building owners.These relationships include exclusive geogr
158、aphic territories and we currently have a developed relationship with Carlisle on this basis.MarketingIn order to capitalize on established customer relationships and locally developed brands,we havemaintained the trade names of most of the businesses that we have acquired.These trade namessuch as A
159、cme Building Materials,Alabama Roofing Supply,American Building&Roofing,Atlanutic Building Products,ApplicatorsSales,Beacon Roofing Supply Canada Company,Beacon Sales,Best Distributing,BJ Supply,Cassady Pierce,Coastal Metal Service,Dealers Choice,Eco Insulation Supply,Enercon Products,Entrepot de la
160、 Toiture,Ford Wholesale,Fox Brothers Company,Groupe Bdard,Intermountain Supply,JGA,JGA Beacon,Lowrys,Lyf-Tym Building Products,Lafayette Wood Works,McClure Johnston,Mississippid Roofing Supply,North Coast RoofingSystems,Pacific Supply,Posi-Pentes,Posi-Slope,ProCoat Systems,Quality Roofing Supply,RCI
161、 Roofing Supply,uRIS Insulation Supply,RIS Roofing Supply,RIS Roofing and Insulation Supply,Roof Depot,Roofing Supply Group,Southern Roof Center,Statewide Wholesale,Structural Materials,The Roof Center,West End Roofing,Siding&Windows,Wholesale Roofing Supply,and Woodfeathers are well-known in the lo
162、cal markets in which the respective branches compete and are associated with high-quality products and customer service.As a supplement to the efforts of our sales force,each of our branches communicates with residential and non-residential contractors in their local markets through newsletters,dire
163、ct mail,social media and the Internet.Inorder to build and strengthen relationships with customers and vendors,we offer exclusive promotions and sponsor our own regional trade shows,which feature general business and roofing seminars for our customers and product demonstrations by our vendors.In add
164、ition,we attend numerous industry trade shows throughout the regions in whichwe compete,and we are an active member of the National Roofing Contractors Association,as well as certain regional contractors associations.In fiscal year 2017,we introduced Beacon Pro+,our innovative e-commerce portal that
165、 enables customers toorder online from our catalog of over 50,000 products and have 24/7 access to view real time pricing,review the status of orders,request and approve quotes,and pay their bills online.13 Purchasing and SuppliersOur status as a leader in our core geographic markets,as well as our
166、reputation in the industry,has allowed us to forge strong relationships with numerous manufacturers of roofing materials and related products,including AtlasfRoofing,Berger Building Products,Building Products of Canada,Carlisle Syntec,CertainTeed Roofing,CertainTeed Siding,Firestone Building Product
167、s,GAF,IKO Manufacturing,James Hardie Building Products,Johns Manvillef fRoofing,Malarkey,Owens Corning Roofing,Ply Gem,Soprema,and TAMKO Building Products.We are viewed by our suppliers as a key distributor due to our industry expertise,past growth and profitability,significant market share,financia
168、l strength,and the substantial volume of products that we distribute.We manage the procurement of products through our national headquarters and regional offices,allowing usto take advantage of both our scale and local market conditions.We believe this enables us to purchase products more economical
169、ly than most of our competitors.Product is shipped directly by the manufacturers to our branches or customers.Operations and InfrastructureOperationsOur branch-based model provides each location with a significant amount of autonomy to operate within the parameters of our overall business model.Oper
170、ations at each branch are tailored to meet local customer needs.Branch managers are responsible for sales,pricing and staffing activities,and have full operational control of customer serviceand deliveries.We provide our branch managers with significant incentives that f fallow them to share in the
171、profitabilityof their respective branches as well as in the company as a whole.Employees at our regional and corporate operationsassist the branches with,among other things,procurement,credit and safety services,fleet management,information systems support,contract management,accounting,treasury and
172、 legal services,human resources,benefits administration and sales and use tax services.Our distribution fulfillment process is initiated upon receiving a request for a contract job order or direct product order from a contractor.Under a contract job order,a contractor typically requests roofing or o
173、ther construction materials and technical support services.The contractu uor discusses the projects requirements with a salesperson and the salesperson provides a price quotation for the package of products and services.Subsequently,the salesperson processes the order and we deliver the products to
174、the customers job site.In fiscal year 2017,we were able to support our customers by fulfilling approximately 97%of warehouse orders through our in-stock inventory asa result of the breadth and depth of the inventory maintained at our local branches.FacilitiesAs of September 30,2017,our network of 38
175、3 branches was serving metrropolitan areas in 48 states and 6Canadian provinces.This network has enabled us to effectively and efficiently serve a broad customer base and toachieve a leading market position in each of our core geographic markets.FleetFor the year ended September 30,2017,our distribu
176、tion infrastructure supported over one million deliveries.To service our customer base,we maintained a dedicated owned fleet of 590 straight trucks,566 tractors and 978 trailers as of September 30,2017.Nearly all of our delivery vehicles are equipped with specialized equipment,including 1,779 truck-
177、mounted forklifts,cranes,hydraulic booms and conveyors,which are necessary to deliver products to rooftop job sites in an efficient and safe manner and in accordance with our customers requirements.Our branches typically focus on providing materials to customers who are located within a two-hour rad
178、ius of their respective facilities.Our branches generally make deliveries each business day.Management Information SystemsWe have fully integrated management information systems across our locations.Acquired businesses aremoved to our IT platform as soon as feasible following acquisition.Our systems
179、 support every major internal14 operational function,except payroll,providing complete integration of purchasing,receiving,order processing,shipping,inventory management,sales analysis and accounting.The same databases are shared within the systems,allowing our branches to easily acquire products fr
180、om other branches or schedule deliveries by other branches,greatlyenhancing our customer service.Our systems also include a pricing matrix which allows us to refine pricing by region,branch,customer and customer type,or even a specific customer project.In addition,our systems allow us to centrallymo
181、nitor all branch and regional performance as often as daily.We have centralized many functions to leverage our growing size,including accounts payable,insurance,payroll,employee benefits,vendor relations,and banking.All of our branches are connected to a common computer network via secure Internet c
182、onnections 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.We place purchase orders electronically with some of our major vendo
183、rs.The vendors then transmit their invoices electronically to us.Our system matches these invoices with the related purchase orders and then schedulesthe associated payment.We retain many financial,credit and other documents for purposes of internal approvals,online viewing and auditing.Government R
184、egulationsWe are subject to regulation by various federal,state,provincial and local agencies.These agencies includethe Environmental Protection Agency,Department of Transportation,Occupational Safety and Health Administration and Department of Labor and Equal Employment Opportunity Commission.We be
185、lieve we are in compliance in all material respects with existing applicable statutes and regulations affecting environmental issues and our employment,workplace health and workplace safety practices.In 2012,the United States Supreme Court upheld the majority of the provisions in the Patient Protect
186、ion and Affordable Care Act(the“Act”).The Act places requirements on employers to provide a minimum level of benefits toemployees and assesses penalties on employers if the benefits do not meet the required minimum level or if the cost of coverage to employees exceeds affordability thresholds specif
187、ied in the Act.The minimum benefits and affordabilityrequirements took effect in 2014.The Act also imposes an excise tax beginning in 2018 on plans whose average cost exceeds specified amounts.We have analyzed the effects on us from the provisions of the Act and we do not currently anticipate a sign
188、ificant financial impact.CompetitionAlthough we are one of the two largest roofing materials distributors in the United States and Canada,theUnited States roofing supply industry is highly competitive.The vast majority of our competition comes from local and regional roofing supply distributors,and,
189、to a lesser extent,other building supply distributors and“big box”retailers.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,but are not limited to,the availabilit
190、y of materials and supplies;technical product knowledge and expertise;advisory or other servicecapabilities;pricing of products;and availability of credit and capital.We generally compete on the basis of the qualityof our services,product quality and,to a lesser extent,price.Order BacklogOrder backl
191、og is not a material aspect of our business and no material portion of our business is subject togovernment contracts.SeasonalityIn general,sales and net income are highest during our first,third and fourth fiscal quarters,which represent the peak months of construction and re-roofing,especially in
192、our branches in the northern and mid-western regions of the United States and in Canada.Our sales are substantially lower during the second quarter,when we usually incur net losses.These quarterly fluctuations have diminished as we have diversified further into the southern and western regions of th
193、e United States.15 We generally experience our peak working capital needs during the third quarter after we build our inventories following the winter season but before we begin collecting on most of our spring receivables.Our principal source of liquidity is our cash and cash equivalents and borrow
194、ings under our revolving credit facility,so our borrowings tend to be highest in the third quarter of our fiscal year.History and Additional InformationOur predecessor,Beacon Sales Company,Inc.,was founded in Charlestown,Massachusetts(part of Boston)in 1928.Beacon Roofing Supply,Inc.was incorporated
195、 in Delaware in 1997.Our principal executive offices are located at 505 Huntmar Park Drive,Suite 300,Herndon,Virginia 20170 and our telephone number is(571)323-3939.rOur Internet website address is .We are subject to the information and periodic reporting requirements of the Securities Exchange Act
196、of r r1934,as amended(“Exchange Act”),and,in accordance with such requirements,furnish or file periodic reports,proxy statements,and other information with the Securities and Exchange Commission(“SEC”).These periodic reports,proxy statements,and other information are available for inspection and cop
197、ying at the regional offices,publicreference facilities,and SEC website,www.sec.gov.We also maintain an investor relations page on our website whereour annual reports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K and other requiredSEC filings may be accessed free of charge
198、as soon as reasonably practicable after such material is electronically filed with,or furnished to,the SEC.ITEM 1A.RISK FACTORSYou should carefully consider the risks and uncertainties described below and other information included in this Form 10-K in evaluating us and our business.If any of the ev
199、ents described below occur,our business and e efinancial results could be adversely affected in a material way.This could cause the trading price of our common stock to decline,perhaps significantly.Risks Related to Our Business We may not be able to effectively integrate newly acquired businesses i
200、nto our operations or achieve expected cost f fsavings or profitability from our acquisitions.Our growth strategy includes acquiring other distributors of roofing materials and complementary products.Acquisitions involve numerous risks,including:?unforeseen difficulties in integrating operations,tec
201、hnologies,services,accounting and employees,including difficulties in operating and integrating Allieds interior products business line,a businessline which we have not previously operated;?diversion of financial and management resources from existing operations;?unforeseen difficulties related to e
202、ntering geographic regions where we do not have prior experience;?potential loss of key employees;?unforeseen liabilities associated with businesses acquired;and?inability to generate sufficient revenue or realize sufficient cost savings to offset acquisition or investment costs.As a result,if we fa
203、il to evaluate and execute acquisitions properly,we might not achieve the anticipated benefits of such acquisitions and we may incur costs in excess of what we anticipate.These risks would likely be greater in the case of larger acquisitions,including the Allied Acquisition.See“Risks Related to the
204、Allied Acquisition”below.16 We may not be able to successfully complete acquisitions on acceptable terms,which would slow our growth rate.The acquisition of other distributors of roofing materials and complementary products is an important part of our growth strategy.We continually seek additional a
205、cquisition candidates in selected markets and from time to time engage in exploratory discussions with potential candidates.We are unable to predict whether or when we will be ableto identify any suitable additional acquisition candidates,or the likelihood that any potential acquisition will becompl
206、eted.If we cannot complete acquisitions that we identify on acceptable terms,it is unlikely that we will sustainthe historical growth rates of our business.An inability to obtain the products that we distribute could result in lost revenues and reduced margins and damage relationships with customers
207、.We distribute roofing and other exterior building materials that are manufactured by a number of major suppliers.Disruptions in our sources of supply may occur as a result of unanticipated demand or production or delivery difficulties.When shortages occur,roofing material suppliers often allocate p
208、roducts among distributors.Although we believe that our relationships with our suppliers are strong and that we would have access to similar products from competing suppliers should products be unavailable from current sources,any supply shortage,particularly of the most commonly sold items,could re
209、sult in a loss of revenues and reduced margins and damage relationships with customers.Loss of key talent or our inability to attract and retain new qualified talent could hurt our ability to operate and tgrow successfully.Our success will continue to depend to a significant extent on our executive
210、officers and key management personnel,including our divisional executive vice presidents and regional vice presidents.We do not have key man life insurance covering any of our executive officers.We may not be able to retain our executive officers and keya apersonnel or attract additional qualified m
211、anagement.The loss of any of our executive officers or other key management employees,or our inability to recruit and retain qualified employees,could hurt our ability to operate and make it difficult to execute our acquisition and internal growth strategies.Further,the Allied Acquisition maynegativ
212、ely impact our ability to retain key personnel.A change in vendor pricing and demand could adversely affect our income and gross margins.Many of the products that we distribute are subject to price changes based upon manufacturers raw material costs and other manufacturer pricing decisions.For examp
213、le,as a distributor of residential roofing supplies,our business is sensitive to asphalt prices,which are highly volatile and often linked to oil prices,as oil is a significant input in asphalt production.Shingle prices have been volatile in recent years,partly due to volatility in asphalt prices.Hi
214、storically,we have generally been able to pass increases in the prices of shingles on to our customers.Although we often are able to pass on manufacturers price increases,our ability to pass onf f increases in costs depends on market conditions.The inability to pass along cost increases could result
215、 in lower operating margins.In addition,higher prices could impact demand for these products,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
216、 based on the volume of our purchases.These rebates effectively reduce our costs for products.If market conditions change,vendors may adversely change the terms of some or all of these programs.Although these changes would not affect fthe net recorded costs of product already purchased,it may lower
217、our gross margins on products we sell and therefore the income we realize on such sales in future periods.Cyclicality in our business and general economic conditions could result in lower revenues and reduced profitability.A portion of the products we sell are for residential and non-residential con
218、struction.The strength of thesemarkets depends on new housing starts and business investment,which are a function of many factors beyond our control,including credit and capital availability,interest rates,foreclosure rates,housing inventory levels and occupancy,employment levels,consumer confidence
219、 and the health of the United States economy and mortgage17 markets.Economic downturns in the regions and markets we serve could result in lower revenues and,since many of our expenses are fixed,lower profitability.The challenging economic conditions in recent years,including tighter credit markets,
220、have adversely affected demand for new residential and non-residential projects and,to a lesser extent,re-roofing projects,and may continue to negatively affect expenditures for roofing in the near term.Unfavorablechanges in demographics,credit markets,consumer confidence,housing affordability,or ho
221、using inventory levels and occupancy,or a weakening of the United States economy or of any regional or local economy in which we operate could adversely affect consumer spending,result in decreased demand for our products,and adversely affect our business.In addition,instability in the economy and f
222、inancial markets,including as a result of terrorism or civil or political unrest,may result in a decrease in housing starts,which would adversely affect our business.Seasonality in the construction and re-roofing industry generally results in second quarter losses.Our second quarter is typically aff
223、ected adversely by winter construction cycles and cold weather patterns asthe levels of activity in the new construction and re-roofing markets decrease.Because many of our expenses remainrelatively fixed throughout the year,we generally record a loss during our second quarter.We expect that theseds
224、easonal variations will continue in the near future.If we encounter difficulties with our management information systems,we could experience problems with inventory,collections,customer service,cost control and business plan execution.We believe our management information systems are a competitive a
225、dvantage in maintaining our leadershipposition in the roofing distribution industry.However,if we experience problems with our management information systems,we could experience,among other things,product shortages and/or an increase in accounts receivable aging.Any failure by us to properly maintai
226、n and protect our management information systems could adversely impact our ability to attract and serve customers and could cause us to incur higher operating costs and experience delays in theexecution of our business plan.Since we rely heavily on information technology both in serving our custome
227、rs and in our enterpriseinfrastructure in order to achieve our objectives,we may be vulnerable to damage or intrusion from a variety of cyber-attacks including computer viruses,worms or other malicious software programs that may access our systems.Despite the precautions we take to mitigate the risk
228、s of such events,an attack on our enterprise information technologysystem could result in theft or disclosure of our proprietary or confidential information or a breach of confidentialcustomer or employee information.Such events could have an adverse impact on revenue,harm our reputation,and hcause
229、us to incur significant legal liability and costs to address and remediate such events and related security concerns.An impairment 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
230、30,2017,goodwill represented approximately 36%of our total assets.We expect to record significant additional goodwilland other intangible assets upon consummation of the Allied Acquisition.Goodwill is not amortized for financial reporting purposes and is subject to impairment testing at least annual
231、ly using a fair-value based approach.The identification and measurement of goodwill impairment involves the estimation of the fair value of our reporting units.Our accounting for impairment contains uncertainty because management must use judgment in determiningappropriate assumptions to be used in
232、the measurement of fair value.We determine the fair values of our reportingunits by using a qualitative approach.We evaluate the recoverability of goodwill for impairment in between our annual tests when events or changes in circumstances indicate that the carrying amount of goodwill may not be reco
233、verable.Any impairment of goodwill 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,thus alimiting our growth prospects.In the future we may require equity or additional debt financing in order to consumma
234、te an acquisition,for tadditional working capital for expansion,or if we suffer more than seasonally expected losses.In the event suchdadditional financing is unavailable to us on commercially attractive terms or at all,we may be unable to expand or make acquisitions or pursue other growth opportuni
235、ties.18 Major disruptions in the capital and credit markets maay impact both the availability of credit and business aconditions.If the financial institutions that have extended credit commitments to us are adversely affected by major disruptions in the capital and credit markets,they may become una
236、ble to fund borrowings under those credit commitments.This could have an adverse impact on our financial condition since we need to borrow funds at times for working capital,acquisitions,capital expenditures and other corporate purposes.Major disruptions in the capital and credit markets could also
237、lead to broader economic downturns,whichcould result in lower demand for our products and increased incidence of customers inability to pay their accounts.The majority of our net sales volume is facilitated through the extension of trade credit to our customers.Additional customer bankruptcies or si
238、milar events caused by such broader downturns may result in a higher level of bad debt expense than we have historically experienced.Also,our suppliers may be impacted,causing potential disruptions or delays of product availability.These events would adversely impact our results of operations,cash f
239、lows and financial position.Our level and terms of indebtedness could adversely affect our ability to raise additional capital to fund our operations,take advantage of new business opportunities,and prevent us from meeting our obligations under our debt instruments.As of September 30,2017,we had$300
240、.0 million in aggregate principal amount of our 6.375%senior notes fdue 2023,$441.0 million outstanding under our existing seven-year senior secured term loan“B”facility,$3.2 milliondrawn under our existing senior secured asset-based revolving credit facilityr(the“ABL Facility”and,together with ythe
241、 term loan B facility,our“Existing Senior Secured Credit Facilities”),and$35.4 million of total other indebtedness.In connection with the Allied Acquisition,on October 25,2017 we issued$1.3 billion in aggregate principal amount of our 4.875%senior notes due 2025(our“outstanding senior notes”),and we
242、 also expect to borrow up to an aggregate principal amount of$970.0 million under a seven-year senior secured term loan“B”facility(the“New Term Loan”)and enter into an amended and restated senior secured asset-based revolving credit facility with commitments of up to$1.3 billion(the“New ABL Facility
243、”and,collectively with the New Term Loan,the“New Senior Secured Credit Facilities”).Our substantial debt could have important consequences m mto us,including:?increasing our vulnerability to general economic and industry conditions;?requiring a substantial portion of our cash flow used in operations
244、 to be dedicated to the payment of principal and interest on our indebtedness,therefore reducing our liquidity and our ability to use our cash flow to fund our operations,capital expenditures and future business opportunities;?exposing us to the risk of increased interest rates,and corresponding inc
245、reased interest expense,because future borrowings under our Existing Senior Secured Credit Facilities or New Senior Secured Credit Facilities would be at variable rates of interest;?reducing funds available for working capital,capital expenditures,acquisitions and other generalcorporate purposes,due
246、 to the costs and expenses associated with such debt;?make 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 service requirements,acquisitions,and general corporate or ot
247、her purposes;and?limiting our ability to adjust to changing marketplace conditions and placing us at a competitive disadvantage compared to our competitors who may have less debt.In addition,the debt agreements that currently govern our Existing Senior Secured Credit Facilities and theindentures gov
248、erning 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 redeem or repurchase,capital stock;make certain investments;incur certain liens;enter into tra
249、nsactions with affiliates;mergeor consolidate;enter into agreements that restrict the ability of our subsidiaries to make dividends or other payments to 19 Beacon Roofing Supply,Inc.;and transfer or sell assets.We expect that the debt agreements and other debt instruments that will govern the New Se
250、nior Secured Credit Facilities will have similar restrictions.In addition,the terms of our preferred stock contain restrictions on our ability to pay dividends on our common stock,and the holdersof such shares would participate in any declared common stock dividends,reducing the cash available to ho
251、lders of common stock.As a result of these restrictions,we will be limited as to how we conduct our business and we may beunable to raise additional debt or equity financing to compete effectively or to capitalize on available business aopportunities.If our cash flows and capital resources are insuf
252、ficient to fund our debt service obligations,we may be forced to reduce or delay capital expenditures,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 service robligation
253、s,which could cause us to default on our debt obligations and impair our liquidity.In the event of a default under any of our indebtedness,the holders of the defaulted debt could elect to declare all the funds borrowed to be due and payable,together with accrued and unpaid interest,which in turn cou
254、ld result in cross-defaults under our other indebtedness.The lenders under our Existing Senior Secured Credit Facilities could also elect to terminate their commitments thereunder and cease making further loans,and such lenders could institute foreclosure proceedings against their collateral,and we
255、could be forced into bankruptcy or liquidation.Despite our current level of indebtedness,we may be able to incur substantially more debt and enter into other transactions which could further exacerbate the risks to our financial condition described above.i iWe may be able to incur significant additi
256、onal indebtedness in the future.Although the debt agreements that currently govern our Existing Senior Secured Credit Facilities,outstanding senior notes and other debt instrumentscontain,and the debt agreements and other debt instruments that we anticipate will govern the New Senior Secured tCredit
257、 Facilities will contain,restrictions on the incurrence of additional indebtedness and entering into certain types of other transactions,these restrictions are subject to a number of qualifications and exceptions.Additionalindebtedness incurred in compliance with these restrictions could be substant
258、ial.These restrictions also do not prevent us from incurring obligations,such as trade payables,that do not constitute indebtedness as defined under our debt instruments.To the extent we incur additional indebtedness or other obligations,the risks described in theimmediately preceding risk factor an
259、d others described herein may increase.Risks Related to the Allied Acquisition The Allied Acquisition is subject to closing conditions.Failure to complel lte the Allied Acquisition could have material and adverse effects on Beacon.On August 24,2017,Beacon entered into the Stock Purchase Agreement in
260、 connection with the Allied Acquisition.Although we currently expect the Allied Acquisition to close on January 2,2018,subject to customary closing conditions,there can be no assurance that the Allied Acquisition will be completed in accordance with theanticipating timing or at all.In addition,if th
261、e Allied Acquisition has not been completed by February 28,2018,either Allied or the Company may terminate the Stock Purchase Agreement unless the failure of the Allied Acquisition to be completed has resulted from the failure of the party seeking to terminate the Stock PurchaseAgreement to perform
262、its obligations thereunder.If the Allied Acquisition is not completed on a timely basis,or at all,Beacons ongoing business may be adversely affected.Additionally,in the event the Allied Acquisition is not completed,Beacon will be subject to a number of risks without realizing any of the benefits of
263、having completed the Allied Acquisition,including theffollowing:?the Company will be required to pay its costs relating to the Allied Acquisition,such as legal,accounting,financing and financial advisory fees,whether or not the Allied Acquisition iscompleted,and could be required to pay Allied a ter
264、mination fee of$85 million in cash if the Stock Purchase Agreement is terminated under specified circumstances;?time and resources committed by the Companys management to matters relating to the Allied Acquisition could otherwise have been devoted to pursuing other beneficial opportunities;and20?the
265、 market price of the Companys securities could decline to the extent that the current market price reflects a market assumption that the Allied Acquisition will be completed,or to the extent that theAllied Acquisition is fundamental to the Companys business strategy.The issuance of preferred shares
266、in the Convertible Preferred Stock Purchase,which will rank senior to our shares of common stock,and the issuance of additional preferred shares as“in-kind”dividend payments will reduce the r rrelative voting power of our common stockholders,will dilute the ownership of such stockholders,and mayadve
267、rsely affect the market price of our common stock.The preferred stock to be issued in the ConvertibleePreferred Stock Purchase will have rights,preferences and privileges that are not held by,and are preferential tothe rights of,our common stockholders.We may be required under certain circumstances
268、to repurchase the preferred stock for cash;such obligations could adversely affect our liquidity and financial condition.On August 24,2017,in connection with the execution of the Stock Purchase Agreement,Beacon entered intoan investment agreement(the“Investment Agreement”)with CD&R Boulder Holdings,
269、L.P.(the“CD&R Stockholder”)and Clayton,Dubilier&Rice Fund IX,L.P.(solely for the purpose of limited provisions therein)for the purchase of shares of Series A Cumulative Convertible Participating Preferred Stock,par value$0.01 per share(the r r“preferred stock”)in order to partially finance the Allie
270、d Acquisition.The preferred stock will be convertible dperpetual participating preferred stock of Beacon,with an initial conversion price of$41.26 per share,and accruedividends at a rate of 6.0%per annum(payable in cash or in-kind,subject to specified limitations).The preferredstock may be converted
271、 to shares of our common stock at any time following issuance thereof at the option of theholder,and any such conversion will dilute the ownership interest of our common stockholders.Pursuant to theInvestment Agreement,upon closing of the Allied Acquisition,the CD&R Stockholder will purchase 400,000
272、 sharesof our preferred stock with an aggregate liquidation preference of$400 million,at a purchase price of$1,000 per share(such purchase,the“Convertible Preferred Stock Purchase”).Such shares of preferred stock may be converted at any time at the option of the holder into 9,694,619 shares of our c
273、ommon stock representing approximately 14.3%of our outstanding shares of common stock(as of September 30,2017 and assuming no adjustment to the initial conversionprice of$41.26 per share).In addition,under the terms of the preferred stock,we may,at our option,force theconversion of all(but not less
274、than all)of the outstanding shares of preferred stock to common stock if any time themarket price of our common stock exceeds 200%of the then-effective conversion price per share for at least 75 days out of any trailing 90-trading day period.Any such conversion would significantly dilute our common
275、stockholdersand may adversely affect our earnings per share and the market price of our common stock.If we issue additional shares of preferred stock as“in-kind”dividend payments that,together with the400,000 shares of preferred stock issued to the CD&R Stockholder at closing of the Allied Acquisiti
276、on,represent inexcess of 12,071,937 shares of our common stock on an as-converted basis,and in certain other circumstances asprovided in the preferred stock certificate of designations,a“Triggering Event”would occur.Upon the occurrence of a“Triggering Event,”the dividend rate will increase to 9.0%pe
277、r annum for so long as the Triggering Event remains in effect,which will further dilute our common stockholders 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 declar
278、e and pay a dividend on the outstanding preferred stock on a pro rata basis with the common sharesdetermined on an as-converted basis.The maximum number of shares of common stock into which the preferred stock may be converted(taking into account any shares of preferred stock issued as in-kind divid
279、end payments)will belimited to 12,071,937 shares of our common stock,which represents 19.99%of the total number of shares of common stock issued and outstanding immediately prior to the execution of the Investment Agreement,unless and until we were to obtain stockholder approval of such issuance und
280、er the NASDAQ listing rules.The terms of the Investment Agreement and preferred stock do not require us to obtain stockholder approval in these circumstances.Holders of the preferred stock generally will be entitled to vote with the holders of the shares of CommonStock on all matters submitted for a
281、 vote of holders of shares of Common Stock(voting together with the holders 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 shares in excess of 19.99%of the aggregate voting power of the common stock o
282、utstandingimmediately prior to the execution of the Investment Agreement).The prior written consent of the holders of a majority of the preferred stock will also be required to,among other things,(i)amend or modify the Companyscharter,by-laws or the certificate of designations governing the preferre
283、d stock that would adversely affect the fpreferred stock or(ii)amend the Companys debt agreements to,among other things,adversely affect the Companysability to pay dividends on the preferred stock,subject to certain exceptions.21 The conversion price of the preferred stock is subject to customary an
284、ti-dilution adjustments,including in the event of any stock split,stock dividend,recapitalization or similar event.Adjustments to the conversion price will dilute the ownership interest of our common stockholders.In addition,holders of preferred stock will have the right to receive a liquidation pre
285、ference entitling them to be paid out of our assets available for distribution to shareholders,before any payment may be made to holders of shares of common stock,an amount equal to the greater of(a)100%of the liquidation preference thereof plus all accrued and unpaiddividends or(b)the amount that s
286、uch holder would havebeen entitled to receive upon our liquidation,dissolution and winding up if all outstanding shares of preferred stock had been converted into common stock immediately prior to such liquidation,dissolution or winding up,without regard to any of the limitations on conversion or co
287、nvertibility.Furthermore,the holders of the preferred stock will have certain redemption rights,including upon certain change of control events involving us,which,if exercised,could require us to repurchase all of the outstanding preferred stock for cash at the original purchase price of the preferr
288、ed stock plus all accrued and unpaid dividendsthereon.Our obligations to pay regular dividends to the holders of the preferred stock or any required repurchase of the outstanding preferred stock could impact our liquidity and reduce the amount of cash flows available for working capital,capital expe
289、nditures,growth opportunities,acquisitions,and other general corporate purposes.Our obligations to the holders of preferred stock could also limit our ability to obtain additional financing or increase our borrowingcosts,which could have an adverse effect on our financial condition.The preferential
290、rights could also result in divergent interests between the holders of the preferred stock and holders of our common stock.Following the completion of the Allied Acquisition and an 18-month lock-up period,the CD&R Stockholder may sell shares of our common stock issued upon conversion of preferred st
291、ock in the public market,which may cause f fthe market price of our common stock to decrease and therefore make it more difficult to raise equity financing or issue equity as consideration in an acquisition.We will enter into a registration rights agreement with the CD&R Stockholder,which will give
292、this holder(together with its permitted transferees)the right to require us to register all or a portion of its shares under theSecurities Act following the expiration of an 18-month lock-up period.The registration rights for the CD&R Stockholder will allow it to sell its shares without compliance w
293、ith the volume and manner of sale limitations under Rule 144 promulgated under the Securities Act and will facilitate the resale of such securities into the public market.The market value of our common stock could decline as a result of sales by the CD&R Stockholder from time to time.In particular,t
294、he sale of a substantial number of our shares by the CD&R Stockholder within a short period of time,or the perception that such sale might occur,could cause our stock price to decrease,make it more difficult for us to raise funds through future offerings of Beacon common stock or acquire other busin
295、esses using Beacon common stock as rconsideration.Following the consummation of the Allied Acquisition,the CD&R Stockholder will hold a significant equityinterest in us and may exercise significant influence over us,including through its ability to designate up to two directors to our board of direc
296、tors,and its interests as a preferred equity holder may diverge from or even conflict with your interests.After giving effect to the Allied Acquisition,the CD&R Stockholder will beneficially own preferred stock convertible into approximately 14.3%of our outstanding common stock(as of September 30,20
297、17 and assuming no adjustment to the initial conversion price of$41.26 per share)and will become our largest stockholder.As a result,the CD&R Stockholder may have the indirect ability to influence our policy and operations.In addition,inconnection with the Allied Acquisition,we have entered into the
298、 Investment Agreement with the CD&R Stockholder,pursuant to which the CD&R Stockholder will be initially entitled to appoint up to two directors to our board of directors.Notwithstanding that all directors will be subject to fiduciary duties to us and to applicable law,the binterests of the director
299、s designated by the CD&R Stockholder may differ from the interests of our security holders asra whole or of our other directors.With such representation on our board of directors,the CD&R Stockholder will have influence over the appointment of management and any action requiring the vote of our boar
300、d of directors,including significant corporate action such as mergers and sales of substantially all of our assets.The directorscontrolled by the CD&R Stockholder will also be able to make decisions affecting our capital structure,includingdecisions to issue additional capital stock and incur additi
301、onal debt.Additionally,for so long as the CD&R Stockholder owns preferred stock,certain matters will require the approval of the CD&R Stockholder,including(1)amendments or modifications to the Companys charter,by-laws or the certificate of designations governing the 22 preferred stock that would adv
302、ersely affect the preferred stock,(2)authorization,creation,increase in the authorizeddamount of,or issuance of any class or series of senior or parity equity securities or any security convertible into,sharesof senior or parity equity securities,(3)any increase or decrease in the authorized number
303、of preferred shares or the issuance of additional shares of preferred stock,(4)amendments to the Companys debt agreements that would,among other things,adversely affect the Companys ability to pay dividends on the preferred stock,subject to certain exceptions,and(5)the liquidation,dissolution or fil
304、ing of a voluntary petition for bankruptcy or receivership.Theinterests of the CD&R Stockholder as stockholder may not in all cases be aligned with your interests and may even conflict with your interests.The CD&R Stockholder and its affiliates are in the business of making or advising on investment
305、s in companies,including businesses that may directly or indirectly compete with certain portions of our business.In addition,the CD&R Stockholder may have an interest in pursuing acquisitions,divestitures,financings or other transactions that,in their judgment,could enhance their equity investments
306、,even though such a transactionmight involve risks to you.Furthermore,the CD&R Stockholder may in the future own businesses that directly or indirectly compete with us.The CD&R Stockholder may also pursue acquisition opportunities that may becomplementary to our business,and as a result,those acquis
307、ition opportunities may not be available to us.ITEM 1B.UNRESOLVED STAFF COMMENTSNone.ITEM 2.PROPERTIESAs of October 31,2017,we leased 382 facilities including our headquarters and other support facilities,throughout the United States and Canada.These leased facilities range in size from approximatel
308、y 2,000 to 137,000 square feet.In addition,we own 13 sales/warehouse facilities located in Manchester,New Hampshire;Reading,Pennsylvania;Montreal,Quebec(2);Sainte-Foy,Quebec;Delson,Quebec;Trois Rivieres,Quebec;Salisbury,Maryland;Hartford,Connecticut;Cranston,Rhode Island;Lancaster,Pennsylvania;Easto
309、n,Maryland;and Manassas,Virginia.These owned facilities range in size from 11,500 square feet to 68,000 square feet.All of the owned properties are mortgaged to our senior lenders.We believe that our properties are in good operating condition and adequately serve our current business operations.23 A
310、s of October 31,2017,we operated 383 branches,a few with multiple leased facilities or combined facilities,as well as 12 other facilities.The following table summarizes the locations of these branches and facilities:Non-BranchLocationBranchesFacilitiesU.S.State Alabama6Arizona 4Arkansas4California 3
311、1Colorado14Connecticut 41Delaware3Florida 18Georgia121Hawaii 2Idaho1Illinois 8Indiana 6Iowa 2Kansas 4Kentucky 6Louisiana 9Maine4Maryland 152Massachusetts13Michigan9Minnesota 3Mississippi3Missouri10Montana 1Nebraska 7Nevada 1New Hampshire2New Jersey 2New Mexico 1New York 2North Carolina 222Ohio 81Okl
312、ahoma3Oregon 3Pennsylvania 28Rhode Island 1South Carolina 8South Dakota 2Tennessee9Texas 342Utah 5Vermont 1Virginia 122Washington 11West Virginia 424 Non-BranchLocationBranchesFacilitiesWisconsin1Wyoming 2Total United States36111Canadian ProvinceAlberta 3British Columbia4Nova Scotia 1Ontario 61Quebe
313、c 6Saskatchewan2Total Canada 221Total-All 38312ITEM 3.LEGAL PROCEEDINGSFrom time to time,we are involved in lawsuits that are brought against us in the normal course of business.We are not currently a party to any legal proceedings that would be expected,either individually or in the aggregate,to ha
314、ve a material adverse effect on our business or financial condition.ITEM 4.MINE SAFETY DISCLOSURESNot applicable.25 PART IIITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESOur common stock trades on the NASDAQ Global Select Market(the“N
315、ASDAQ”)under the symbol“BECN”.The following table lists quarterly information on the price range of our common stock based on the highnand low reported sale prices for our common stock as reported by NASDAQ for the periods indicated below:HighLow Year Ended September 30,2016:First Quarter$44.01$32.0
316、2 Second Quarter$43.25$32.24 Third Quarter$45.72$40.42 Fourth Quarter$48.96$39.50 Year Ended September 30,2017:$49.32$40.68 Second Quarter$50.61$43.51 Third Quarter$52.12$47.02 Fourth Quarter$51.96$39.57 There were 94 registered holders of record of our common stock as of October 31,2017.dPurchases
317、of Equity Securities by the Issuer and Affiliated PurchasersNo purchases of our equity securities were made by us or any affiliated entity during the fourth quarter of the fiscal year ended September 30,2017.Recent Sales of Unregistered SecuritiesNone.DividendsWe have not paid cash dividends on our
318、common stock and do not anticipate paying dividends in theforeseeable future.Our board of directors currently intends to retain any future earnings for reinvestment in our growing business.Our revolving credit facilities currently prohibit the payment of dividends without the prior written consent o
319、f our lenders.Any future determination to pay dividends will also be at the discretion of our board of directors and will be dependent upon our results of operations and cash flows,our financial position and capital requirements,general business conditions,legal,tax,regulatory and any contractual re
320、strictions on the payment of dividends,and any other factors our board of directors deems relevant.Stock Performance GraphThis stock performance graph shall not be deemed“soliciting material”or to be“filed”with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934,as amended(the“
321、Exchange Act”),or otherwisesubject to the liabilities under that Section,and shall not be deemed to be incorporated by reference into any filing of Beacon Roofing Supply,Inc.under the Securities Act of 1933,as amended,or the Exchange Act.The performance of Beacon Roofing Supply,Inc.s common stock de
322、picted in the stock performance graph represents historical resultsonly,and is not necessarily indicative of future performance.The following graph compares the cumulative total shareholder return on Beacon Roofing Supply,Inc.s common stock(based on market prices)for the last five fiscal years with
323、the cumulative total return on(i)the Nasdaq Index,(ii)the S&P 1500 Trading Companies&Distributors Index and(iii)the S&P 1500 Building Products Index,26 assuming a hypothetical$100 investment in each on September 30,2012 and the re-investment of all dividends.The closing price of our common stock on
324、September 30,2017 was$51.25.Historically,we have utilized the S&P 1500 Buildings Products Index in our comparison of cumulative totalreturn.We believe the S&P 1500 Trading Companies&Distributors Index includes a more representative sample of peer companies to Beacon and provides a better benchmark o
325、f industry performance for the following reasons:?The S&P 1500 Building Products Index includes many manufacturing companies that have different financial and operating characteristics and are not directly comparable to our business.?The S&P 1500 Trading Companies&Distributors Index is comprised of
326、companies that bear more similarities to our business,regardless of the types of products distributed.We expect to utilize the S&P 1500 Trading Companies&Distributors Index in future filings,but for this year we haveincluded the results of both indexes in the stock performance graph below.BasePeriod
327、Company/Index201220132014201520162017Beacon Roofing Supply,Inc.100.00$129.46100.00$89.46129.46$114.0889.46$147.72114.08$179.95147.72Nasdaq Index100.00$122.77100.00148.08122.77 153.99148.08 179.29153.99 221.75179.29S&P 1500 Building Products Index100.00$145.19100.00155.74145.19 196.01155.74262.44196.
328、01 283.70262.44S&P 1500 Trading Companies&Distributors Index100.00$128.37100.00138.57128.37 107.73138.57 126.72107.73144.06126.72Years Ended September 30,INDEXED RETURNS27 ITEM 6.SELECTED FINANCIAL DATAYou should read the following selected financial information together with our financial statement
329、s 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 September 30,2017,September 30,2016 and September 30,2015,and the balance sheet data as of
330、 September 30,2017 and September 30,2016,from our audited financial statements included in this Form 10-K.We have derived the statements of operationsdata for the years ended September 30,2014 and September 30,2013,and the balance sheet data as of September 30,2015,September 30,2014 and September 30
331、,2013,from our audited financial statements not included in thisu uForm 10-K.Consolidated Statement of Operations Data:Year Ended September 30,2017 2016 2015 2014 2013(In thousands,except share and per share amounts)Net sales$4,376,670$4,127,109$2,515,169$2,326,905$2,240,723Cost of products sold 3,3
332、00,7313,114,0401,919,8041,799,065 1,709,326Gross profit 1,075,9391,013,069595,365527,840 531,397Operating expense859,843808,085478,284428,977 401,676Income from operations 216,096204,984117,08198,863 129,721Interest expense,financing costs,and other 52,75158,45211,03710,095 8,247Income before provis
333、ion for income taxes163,345146,532106,04488,768 121,474Provision for income taxes62,48156,61543,76734,922 48,867Net income$100,864$89,917$62,277$53,846$72,607Weighted-average common stock outstanding:Basic60,315,64859,424,37249,578,13049,227,466 48,472,240Diluted 61,344,26360,418,06750,173,47849,947,699 49,385,335Net income per share:Basic$1.67$1.51$1.26$1.09$1.50Diluted$1.64$1.49$1.24$1.08$1.47Ba
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