• Record fourth quarter and full year net sales, net income and Adjusted EBITDA

• Achieved strong net income margin and double-digit Adjusted EBITDA margin for the second consecutive calendar year

• Ambition 2025 initiatives provided significant contribution to results, with improvements from the bottom quintile branch initiative, accelerated greenfield investments, and M&A

• Methodical and targeted inventory reduction efforts since the second quarter yielded strong fourth quarter cash generation and provided capacity to invest

• Coastal acquisition substantially enhances Beacon value proposition to roofing, waterproofing and restoration contractors with nationwide specialty waterproofing footprint

Beacon (Nasdaq: BECN) (the “Company”, “we”, “our”) announced results today for the fourth quarter and full year ended December 31, 2022 (“2022”).

“We finished the year with strong results including the highest fourth quarter and full year sales, net income and Adjusted EBITDA in Beacon’s history,” said Julian Francis, Beacon’s President & CEO. “In 2022, our 7,000+ team members set financial records by executing against our plan, delivering high caliber service to our customers and progressing on our Ambition 2025 strategy to fully unlock Beacon’s potential. We ramped up growth investments, with 22 acquired branches during the year including our fourth quarter acquisition of Coastal, which substantially expanded our waterproofing and restoration offerings to our customers. We also accelerated greenfield investments, adding 16 locations during the year in key markets creating capacity and expanding our branch footprint. I am pleased to report that we finished the year with strong cash generation and enter 2023 with ample capacity to deploy capital to both growth initiatives and shareholder returns. Looking forward, I am confident that we have the right leadership and values-driven culture to deliver on our multi-year strategic roadmap to help our customers build more.”

Fourth Quarter and Full Year Financial Highlights

References below to “prior year” and “2021” refer to the three or twelve months ended December 31, 2021, as applicable.

Fourth Quarter

Net sales increased 12.2% (14.1% on a per-day basis) compared to the prior year to $1.97 billion, a Company record for fourth quarter net sales. Fourth quarter sales increased compared to the prior year period driven by the successful implementation of price increases. Weighted-average selling price increased approximately 17-18% and estimated volumes decreased approximately 6-7% (4-5% on a per-day basis).

Residential roofing product sales increased 5.1% (6.9% on a per-day basis), non-residential roofing product sales increased 25.2% (27.1% on a per-day basis), and complementary product sales increased 14.0% (15.9% on a per-day basis) compared to the prior year. The three-month periods ended December 31, 2022 and 2021 had 61 and 62 business days, respectively.

Gross margin decreased to 26.2%, from 26.3% in the prior year, as higher average selling prices for our products were largely offset by higher product cost, combined with increased non-residential product sales mix. The increase in operating expense and Adjusted Operating Expense in 2022 was due to increases in payroll and benefit costs and stock-based compensation, primarily due to increased headcount to support new and acquired branches, as well as inflation and higher incentive compensation. Operating expense as a percent of sales was lower in the fourth quarter of 2022, driven by the positive impact from net sales growth combined with the loss on sale of Solar Products in the prior year period. Adjusted Operating expense as a percent of sales was higher as the positive impacts from net sales were more than offset by higher payroll and benefit costs and selling costs.

Net income (loss) from continuing operations was $73.3 million, compared to $68.1 million in the prior year. Adjusted EBITDA was $178.5 million, compared to $174.1 million in the prior year. EPS was $0.88, compared to $0.76 in the prior year. Improvements in fourth quarter results compared to the prior year period were driven primarily by higher net sales and a reduction in the number of shares outstanding.

Year ended December 31, 2022

Net sales increased 23.6% compared to the prior year to $8.43 billion, a Company record. 2022 net sales increased across all three lines of business versus the prior year period, driven largely by the successful implementation of price increases and higher demand for our products. Weighted-average selling price increased approximately 20-21% and estimated volumes increased approximately 1-2%.

Residential roofing product sales increased 17.5%, non-residential roofing product sales increased 41.6%, and complementary product sales increased 17.3% compared to the prior year. The years ended December 31, 2022 and 2021 had 252 and 253 business days, respectively.

Gross margin decreased to 26.5%, from 26.7% in the prior year as price-cost improvement was more than offset by a higher non-residential product sales mix. The increase in operating expense and Adjusted Operating Expense in 2022 was primarily due to increases in payroll and benefit costs, selling costs and general and administrative expenses combined with the effect of acquired branches. Both operating expense as a percent of sales and Adjusted Operating Expense as a percent of sales were lower in 2022, driven by the positive impact from net sales growth.

Net income (loss) from continuing operations was $458.4 million, compared to $241.9 million in the prior year. 2021 results include a loss on debt extinguishment of $60.2 million. Adjusted EBITDA was $910.0 million, compared to $685.9 million in the prior year. EPS was $5.55, compared to $2.69 in the prior year. The improvement compared to the prior year period was largely driven by higher net sales and a reduction in the number of shares outstanding.

In February 2022, Beacon announced the authorization of a share repurchase program, pursuant to which the Company may purchase up to $500 million of its common stock. In 2022, the Company repurchased and retired $388 million of its common stock through a combination of open market repurchases and two previously announced accelerated share repurchase ("ASR") agreements, both of which concluded during 2022. As a result, shares of common stock outstanding decreased to 64.2 million as of December 31, 2022, from 70.4 million as of December 31, 2021.

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

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

Earnings Call

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

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

Forward-Looking Statements

This release contains information about management’s view of the Company’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “believe,” “will likely result,” “outlook,” “project” and other words and expressions of similar meaning. Investors are cautioned not to place undue reliance on forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but not limited to, those set forth in the "Risk Factors" section of the Company’s Form 10-K for the fiscal year ended September 30, 2021 and subsequent filings with the U.S. Securities and Exchange Commission. The Company may not succeed in addressing these and other risks. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. In addition, the forward-looking statements included in this press release represent the Company’s views as of the date of this press release and these views could change. However, while the Company may elect to update these forward-looking statements at some point, the Company specifically disclaims any obligation to do so, other than as required by federal securities laws. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this press release.

About Beacon

Founded in 1928, Beacon is a Fortune 500, publicly traded distributor of building products, including roofing materials and complementary products, such as siding and waterproofing. The Company operates over 480 branches throughout all 50 states in the U.S. and 6 provinces in Canada. Beacon serves an extensive base of nearly 100,000 customers, utilizing its vast branch network and diverse service offerings to provide high-quality products and support throughout the entire business lifecycle. Beacon offers its own private label brand, TRI-BUILT®, and has a proprietary digital account management suite, Beacon PRO+, which allows customers to manage their businesses online. Beacon’s stock is traded on the Nasdaq Global Select Market under the ticker symbol BECN. To learn more about Beacon, please visit www.becn.com.

BEACON ROOFING SUPPLY, INC.

Non-GAAP Financial Measures

(Unaudited; in millions)

Non-GAAP Financial Measures

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

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

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

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

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

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

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

BEACON ROOFING SUPPLY, INC.

Non-GAAP Financial Measures (continued)

(Unaudited; in millions)

Adjusting Items to Non-GAAP Financial Measures

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

• Acquisition costs. Represent certain costs related to historical acquisitions, including: amortization of intangible assets; professional fees, branch integration expenses, travel expenses, employee severance and retention costs, and other personnel expenses classified as selling, general and administrative; gains/losses related to changes in fair value of contingent consideration or holdback liabilities; and amortization of debt issuance costs.

• Restructuring costs. Represent costs stemming from headcount rationalization efforts and certain rebranding costs; impact of the Interior Products and Solar Products divestitures; costs related to changing our fiscal year end; amortization of debt issuance costs; debt refinancing and extinguishment costs; and abandoned lease costs.

• COVID-19 impacts. Represent costs directly related to the COVID-19 pandemic.

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

BEACON ROOFING SUPPLY, INC.

Non-GAAP Financial Measures (continued)

(Unaudited; in millions)

Adjusted Operating Expense

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

Adjusted Net Income (Loss)

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