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Financials for YTD Q3 ended June 2007
Investor Presentation
Robert Buck
Chairman and Chief Executive Officer
David Grace
Chief Financial Officer
Summer 2007
Forward looking statements
This presentation contains “forward-looking statements”. These statements
relate to future events or our future financial performance and involve known
and unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements expressed or implied
by these forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. We caution you not to place undue reliance on forwardlooking statements, which reflect our analysis only and speak only as of the
date of this presentation, and you should refer to the “Risk Factors” section of
our latest Form 10K. We undertake no obligation to update the forwardlooking statements to reflect subsequent events or circumstances.
1
Company Overview
Robert Buck
Chairman and Chief Executive Officer
2
Beacon overview
Founded in 1928, Beacon Roofing Supply, Inc. has grown to be one of the
largest distributors of residential and non-residential roofing materials in
the United States and Canada
 A leader in key metropolitan markets in the Northeast, Mid-Atlantic,
Midwest, Central Plains, Southeast and Southwest regions in the
United States and in Eastern Canada
 178 branches across 34 U.S. states and 3 Canadian provinces
 Over 40,000 customers
 Broad product offering of up to 10,000 SKUs
 Strong historical performance
 FY 2006 Sales of $1,500.6 million (8-year CAGR 45%)
 FY 2006 Operating Income of $100.3 million (8-year CAGR 44%)
 FY 2006 Sales growth of 76%, organic growth of 14.7%
 FY 2006 Operating income growth of 65.2%
 Successfully completed 17 acquisitions since 1997
3
Significant strategic accomplishments
Key accomplishments since IPO
At IPO
Today
Number of branches
66
178
Number of operating states
12
34
7,500
10,000
>18,000
>40,000
5 - 10% (expected)
15% (realized *)
$950mm (opportunity)
>$830mm (realized)
SKU count
Number of customers
Average internal growth
Targeted acquisitions ($sales)
* Through fiscal 2006
 Beacon successfully completed 11 strategic acquisitions since our IPO
 Opened 21 new greenfield locations since the IPO
4
March Across North America
1997
2001
2004
Today
5
Comprehensive assortment of products for all
external residential and commercial building needs
Revenue product mix1
Complete product offering
1 Steep Slope Roofing
System
Non-residential
roofing
36%
Complementary
building
products
23%
2 Underlayment
3 Custom Metals
4 Substrates
5 Wood & vinyl Siding
6 Flat Roof Systems
7 Rigid Insulations
8 Air & Vapor Barriers
9 Pressure Treated Lumber
Residential
roofing
41%
10 Cavity Wall Air & Vapor
Barrier Systems
11 Doors & Windows
1
Reflects existing market net revenue for FY 2006
12 Through Wall Flashings
13 Expansion Joints
14 Below Grade
Waterproofing System
15 Below Grade Drainage
Systems
16 Waterstop
17 Concrete Sealers &
Coatings
 10,000 SKUs offered
 Selected relationships with manufacturers to
achieve substantial volume discounts
 Re-roofing makes up approximately 67% and
79% of residential and non-residential
demand*
18 Ground Barriers
*source – Freedonia October 2006
6
Why invest in Beacon?
 High value-added distributor performing a critical role in the
roofing supply chain
 Market leader in an attractive, growing and fragmented industry
 Highly scalable platform and proven business model with
minimal capital expenditures
 Superior financial performance highlighted by attractive growth
and margins
 Historical 8-year sales CAGR: 45% (1998-2006)
 FY2006 internal sales growth: 14.7%
 Industry leading operating income margins: 6.7% (FY2006)
 Results-oriented management, corporate culture and controls
7
Our Company Values and Culture
8
Critical role in roofing materials supply chain ...
 Manufacturers not capable of servicing
tens of thousands of specialized
contractors
Manufacturers
 On-site and on-time delivery
 Technical support
Over 40,000
roofing
contractors
 Credit to contractors
 Inventory, multiple product lines
 Contractors not capable of dealing
directly with manufacturer
Roofing product distributors will continue to be a critical component of the roofing
material supply chain
9
… reinforced
by high value service offerings to
the contractor
Beacon’s reliability and contractor
focus saves its customers time and
money
 Reliability of distributor is crucial to
contractor profitability
 Delivering on time – Delay on a
commercial site can cost a
contractor $100’s per hour
Customers support Beacon’s value
proposition
Recent customer survey results
Rank Customer priorities
1
Product selection
2
On-time delivery
3
Complete and accurate orders
4
Price
 Product availability – Lack of
specified product can add
substantial cost to contract
 Our contractor focus allows strong
product knowledge and expertise
 Goal is to partner with the
 Big box retailers less of a factor
 Limited product selection
 Retail oriented service and support
 Basic to no product expertise
contractor rather than just supply
10
Large and attractive market
U.S. roofing materials market
Overview
 $12.7 billion industry in the U.S. with a
Non-residential
35%
projected growth rate of 1.9% annually through
2010
 Re-roofing (vs. new construction) accounts for
approximately 70% of roofing expenditures
 Re-roofing makes up approximately 67% and
79% of residential and non-residential demand,
respectively
 Roofing demand has grown every year since
Residential
65%
2005 Total = $12.7bn *
Source: The Freedonia Group – October 2006
1993
 Grown through three years of declining
building construction expenditures (1995,
2001, 2002)
 Almost two-thirds of the U.S. housing stock was
built prior to 1980, with a median age of 30
years
*represents sales by manufacturers
Roofing market is somewhat insulated from swings in the overall
building cycle
11
Re-roofing Concentration Drives Stable Growth
Roofing Demand Compared to Interest Rates
$12.0
9.0%
8.4%
8.5%
$10.0
8.0%
8.0%
$8.0
8.1%
7.3%
7.8%
7.5%
7.6%
7.4%
$6.0
7.0%
7.0%
6.9%
$4.0
6.5%
6.5%
6.2%
$2.0
$7.4
$7.7
$7.9
$8.2
$8.5
$8.8
$9.1
$9.2
$9.4
$9.6
5.8%
5.8%
$10.0
$10.4
6.0%
5.5%
$10.7
$0.0
5.0%
1993
1994
1995
1996
1997
1998
1999
2000
2001
Roofing Demand ($'s in billions)
2002
2003
2004
Home Mortgage Rates

Total roofing demand is very stable

Installed base of existing homes and commercial buildings is large and growing

Re-roofing is not a luxury expenditure, and it is not discretionary

There is virtually no correlation between interest rates and demand for roofing
Source: Global Industry Analysts
2005
12
Re-roofing Concentration Drives Stable Growth
Construction Spending Growth by Category
20.0%
16.0%
12.0%
8.0%
4.0%
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0.0%
-4.0%
-8.0%
-12.0%
-16.0%
Non-Resdiential Construction YoY %
Residential Construction YoY %
Total Roofing Demand YoY %
 Residential new construction activity has been volatile
 Commercial new construction is also volatile and closely follows economic cycles
 Demand for roofing, due to the large installed base of aging structures, remains very
stable and consistent despite the construction cycles
Source: Global Industry Analysts
13
Highly fragmented market is ripe for consolidation
Roofing distributors
Key considerations
 Beacon is among the three largest
roofing distributors in North America
 Although over 1,500 distributors serve
< 5% are
regional
the roofing materials market, fewer
than 5% are regional
 Consolidation driven by customer
demands and needs
Market Share by Revenue
Beacon
6.8%
Total number of roofing distributors > 1,500
Other Top 3
20.1%
Source: IBIS World Pty Ltd.
All Other
72.6%
Source: Company estimate
14
Strong platform for growth and acquisitions
5–10% “organic” average annual growth potential
3–5%
2–5%
New branch
openings
(e.g., Boston/
Houston)
 Targeted number: 6-12
locations per year
 Incremental sales
+
Existing market
growth
 Market plans by
location
 Sales rep productivity
effect: $12–25mm
 EBITDA impact:
Typically breakeven in
year one
 Identify new prospects
 New product offerings
10–15%
+
Acquisitions
1,500+
distributors
15–25%
=
 Compelling customer-driven
rationale for industry
consolidation
Potential
average annual
growth
 Actual sales 8-year
CAGR: 45%
 Acquisition opportunities are
identified and actionable
 Highly fragmented
market
 Over 1,500 players
 Long history of successful
integration
 Margin and revenue
improvement
 Scalable platform
15
Growth through new branch openings
Selective geographic expansion through new branch openings
 Disciplined approach to new branch openings in contiguous markets
 All branches opened by Beacon have been successful
 31 branches opened since 1997
 Low initial investment: $600,000 – $1,000,000
 Rapid breakeven – typically cash flow positive within one year
 New markets are consistently being identified and evaluated
 21 branches have been opened since the IPO
 Others in location identification stage
 Branch managers have been identified
16
Branch opening actual results
Manchester, NH branch opening
Net sales ($ in 000s)
 Date Opened: September 1997
$14,829
Minimal required investment
Trucks
$245,885
Inventory
216,346
Forklifts
41,672
Office equipment
13,372
Total
$517,275
Incremental sales
Estimated sales
transferred
$6,579
11,829
3,579
3,000
3,000
Sep-98
Sep-06
Operating income ($ in 000s)
 Cash flow positive within 8 months
$1,186
$631
Incremental income
Estimated income
transferred
886
331
300
300
Sep-98
Sep-06
17
Knowledgeable and experienced sales and marketing team
319 sales and business
developers
 Extensive coverage
of/visits to local players
 Prospect for new
customers while increasing
sales to existing customers
673 branch managers and
contractor service
representatives
 Manages contractor
logistics including delivery
and product placement
 Provides value-added
technical advice and
product knowledge
47 manufacturer
representatives and product
specialists
 Product specialists who
liaise between
manufacturers and
contractors
 Instrumental in specifying
Beacon-sold products in
construction products
18
Existing market growth
 Significant opportunity to continue leveraging customer relationships to
increase sales
 Sales growth to existing customers of over 10% in 2006 as compared to 2005
 Strong track record of increasing the size and profitability of its customer
base
 Over 4,000 new customers added in 2006
 Over $54 million of incremental sales from these new customers in 2006
Selective product offering and services expansion *
New product
Growth in 2006
2006 Sales ($ millions)
Fiber cement siding
34%
$17.1
Windows & doors
21%
24.9
Composite decking
17%
23.8
Vinyl siding
13%
$60.7
* Represents FY 2006 sales in U.S. existing markets
19
Acquisitions come with significant synergy potential
Revenue
expansion
Sophisticated
uniform IT
platform
Best practices
Large operational
scale
Beacon has a highly scalable business model
20
Acquisition performance
The Roof Center and West End Lumber Acquisitions: Acquired June 2001 ($000s)
Twelve month results at close
Sales
Fiscal 2006 results
$195,868
Sales
Gross margin
26.6%
Gross margin
Operating income
$4,953
Operating income
% margin
2.5%
% margin
$345,033
26.5%
$30,889
8.95%
Growth & Synergies
 Sales CAGR of 11.4%
 Operating income increased by 524% and
operating margin expanded by 645 bps
 41.7% CAGR
21
Financial overview
David Grace
Chief Financial Officer
22
Significant sales growth
Net Sales ($ in millions)
Fiscal years
$2,000
Year-to-Date
$1,500.6
$1,500
$1,152.0
$1,069.4
$1,000
$850.9
$652.9
$549.9
$559.5
2002
2003
$415.1
$500
$224.0
$127.0
$0
1999
2000
2001
2004
2005
2006
Q3
2006
Q3
2007
23
Consistent annual growth in profitability and cash flow
Operating income ($ in millions)
Year-to-Date
Fiscal years
$120
$100.3
$100
$80
$70.5
$60.7
$60
$42.3
$40
$20
$8.5
$10.4
1999
2000
$18.7
$29.4
2001
2002
$43.5
$31.3
$0
2003
PF
2004
2005
2006
Q3
2006
Q3
2007
Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm.
24
Margin Analysis
Gross profit margin
30%
24.7% 25.2% 25.4% 24.3% 24.3% 24.3%
19.7% 22.6%
24.5% 23.1%
15%
0%
2000
2001
2002
2003
2004
2005
5.6%
6.5%
7.1%
2003
PF
2004
PF
2005
2006
YTD
2006
5.8%
6.7%
6.6%
PF
2005
2006
YTD
2007
Operating income margin
8%
4.6%
4.5%
5.3%
2000
2001
2002
3.8%
4%
0%
2005
Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm.
YTD
2006
YTD
2007
25
Financial performance review
($ millions)
FY 2005
FY 2006
YoY
Change
YTD
Q3 2006
YTD
Q3 2007
YoY
Change
Net Sales
$850.9
$1,500.9
76.4%
$1,069.4
$1,152.0
7.7%
Gross Profit
% margin
207.2
24.3%
364.1
24.3%
75.7%
261.8
24.5%
265.7
23.1%
1.5%
Operating Income
% margin
60.7
7.1%
100.3
6.7%
65.2%
70.5
6.6%
43.5
3.8%
(38.4)%
Net Income
% margin
32.9
3.9%
49.3
3.3%
49.8%
34.7
3.2%
14.0
1.2%
(59.8)%
89.9
70.8
(21.3)%
$0.79
$0.31
(60.8)%
Adjusted EBITDA (1)
Diluted EPS
$0.80
$1.12
40.0%
(1) For a reconciliation of Adjusted EBITDA to Net Income, please reference our press
release dated August 8, 2007
26
Financially positioned to deliver on growth
 Ample liquidity
 $150 million U.S. revolving line of credit and CDN $15 million Canadian revolving line of credit,
with initial term loans totaling $350 million, through October 2013
 $113 million available at June 30, 2007 plus approximately $43 million in cash
 Conservative capital structure
 Strong free cash flow
 Net debt/equity ratio of 131% at June 30, 2007
 TTM Debt to Adjusted EBITDA ratio(1) of 3.4 as of June 30, 2007
 Robust financial controls
 Systems integrated
 Sarbanes-Oxley compliant
 Disciplined financial approach
 Average bad debt expense of 0.3% of net sales over the past 5 fiscal years
 Minimal capital expenditures of less than 2% of sales
 $10.8 million in 2005, $19.1 million for FY 2006
(1) Calculated as defined under our credit facilities.
27
Strong and consistent annual financial performance
 Average annual sales growth goal of 5%-10% (excluding
acquisitions)
 Gross margin goals between 23%–25%
 Operating margin goals between 7%-8%
 Capital expenditure goals less than 2% of sales
 FY 2006 highlights
 Sales up 76% YoY
 Operating income up 65% YoY
 Net income up 50% YoY
28
Company of substance
Benchmarking
Fundamentals
Culture
Excellent
Forecasting &
Track Record
Accountability
Routines
29