Company Profile - Beacon Roofing Supply, Inc

Overview

Beacon Roofing Supply, Inc. is one of the largest distributors of residential and non-residential roofing and complementary building products in North America. We currently consist of 12 regional companies in 37 states and 3 Canadian Provinces with 172 locations and more than 2,300 employees. We are known throughout the building supply industry for having quality people, quality service and quality building products.

Beacon’s mission is to be the leading North American supplier to commercial and residential roofing and exterior building contractors through a family of long-established regional suppliers and to add value to our contractor customers' businesses, to our employees' careers, to our investors' assets, and to our suppliers' products.

Our local branches stock a comprehensive product line that caters to their markets. In addition to roofing, local product offerings can include windows, siding, decking, waterproofing and many other external building products. Our status as a leader in our industry allows us to develop strong partnerships with leading brand manufacturers and to stock an unmatched supply of the professional components necessary for the quality, timely completion of our contractor-customers projects.

We provide our customers with a comprehensive array of value-added services which distinguish us from our competition. We have earned a reputation for excellent employees, professionalism and high-quality service. We believe that quality service does not end with the delivery of materials – it ends with the successful completion of the project. As a result, “partnerships” are formed between Beacon branches and our customers that go beyond the industry norm.

Beacon has grown by expanding its existing regions and by making strategic acquisitions. Our business is well-balanced between new and re-roof applications in both residential and commercial markets. A highly scalable platform, a proven business model, results-oriented management and a strong people-focused corporate culture give us a solid foundation for continued growth.

Beacon Roofing Supply is publicly traded on the NASDAQ stock market under the symbol BECN. In June of 2006 Beacon Roofing Supply was named to the NASDAQ Global Select Market.

Culture

To be the leading North American supplier to commercial and residential roofing and exterior building contractors through a family of long-established regional suppliers and to add value to our contractor customers' businesses, to our employees' careers, to our investors' assets, and to our suppliers' products.

Career Opportunities

For current news and updates about Beacon Roofing Supply, Inc. please visit our website.

http://www.beaconroofingsupply.com

Our History

How did Beacon Roofing Supply transform itself from a small regional firm with 32 employees to approximately $1.8 billion company with 172 branches across North America? Believe it or not, the answer is one word: values. A spirit of integrity based on enduring values has guided Beacon’s astounding growth. These values have ensured successful partnerships with suppliers and customers, and they have enabled Beacon to build a workforce that is the best in the industry.

Beacon Sales Company was established in 1928 in Charlestown, Mass., as one of the first distributors of commercial roofing materials in New England. By 1953, the company had outgrown its building in Charlestown, and built a state-of-the-art facility in nearby Somerville. In the 1970s, the company expanded to Worcester, Mass. and Lewiston, Maine.
In 1984, Drew Logie took an equity position in this well-respected company. Drew knew the roofing business inside and out. He had begun as a roofing contractor, worked in sales for a roofing manufacturer, and was a branch manager for a leading distributor of roofing materials. When he took over, Beacon had annual sales of nearly $17 million, virtually all in the commercial roofing segment.

In addition to his broad experience, Drew also had a deep conviction that business success depended on values. His vision was to grow a company of honesty and integrity, rooted in a philosophy of partnership and trust with customers and suppliers. The plan was to do business with the best, most efficient, most demanding contractors, and buy from the best manufacturers. The company would grow by becoming more important to its customers, by providing high-quality products and responsive service at a fair price. And it did. Beacon, for example, was one of the first distributors to outfit its delivery trucks with mechanical equipment such as forklifts, roof-loading conveyors and cable cranes, resulting in efficient deliveries and reducing its contractor customers’ equipment expenses.

Another fundamental value was passion for the entrepreneurial spirit. The goal was to nurture this spirit among branch managers, trusting them with a great deal of autonomy and allowing them to make decisions based on local market conditions.

Drew also focused on strengthening the quality of Beacon’s inside and outside sales staff. To become more results-oriented, the company attracted the best people in the industry by offering them an excellent compensation program, and retained them by rewarding their performance. Drew sought employees with a strong work ethic: enthusiastic employees who were willing to start work every day at 6:00 a.m., serving and advising contractors who took pride in their jobs, and who had the perseverance to aid contractors with their challenging projects.

Shortly after Drew became CEO, David Grace joined the company as Chief Financial Officer. He established financial discipline with state-of-the-art financial controls and an enterprise resource planning system that provided a solid foundation for Beacon’s growth.

Under Drew’s leadership, the company opened new branches and increased sales, diversifying into residential as well as commercial roofing. By 1997, seven branches were generating $72 million in annual sales.

Frugality drove the expansion into residential roofing. The company used resources more efficiently as drivers made residential deliveries after returning from their early-morning commercial deliveries. Beacon’s original move into residential roofing demonstrated to quality manufacturers the benefits of partnering with Beacon. Before affiliating with Beacon, a leading national shingle manufacturer had sold very few shingles in New England. Within a few years of partnering with Beacon, the company became the leading shingle supplier in New England. This resulted from Beacon’s belief in the manufacturer, as well as the credibility of Beacon’s sales force among contractors and builders.

By the late 1990s, Drew realized that for Beacon to remain competitive, it would either have to grow beyond New England or merge with a larger firm. It was time to seek an investment partner to finance Beacon’s continued growth. Beacon received proposals from several potential investors, and the partner of choice was Code, Hennessy & Simmons, a venture capital firm from Chicago. Although Code Hennessy & Simmons had not offered the best price or the most equity, the firm shared Beacon’s vision of acquiring and partnering with high-quality regional distributors. Code Hennessy & Simmons also supported Beacon’s philosophy of rewarding key managers with the opportunity to acquire equity or stock options so they would have a stake in the growing enterprise. Time would show Beacon’s values triumphed over the lure of short-term gains.

In 1998, Beacon embarked on a major program to acquire successful distributors that enjoyed good relationships with contractors. While growing in sales and profits over the years, Beacon gained an industry-wide reputation for integrity. As a result of this reputation, Beacon was usually the sole preferred buyer when a regional distributorship became available for acquisition. The local founding families or managing executives recognized Beacon as a company that would respect the legacies they had established, treat their employees respectfully and compensate them generously.

Central to Beacon’s acquisition philosophy was the retention of local management. Beacon recognized that the team that had built a successful local company was best equipped to lead future growth in that region. Beacon retained key managers by offering them equity in the company and/or stock options, and gave them the autonomy to make business decisions based on their knowledge of the local markets.

As Beacon acquired local companies, often one of the first questions asked was, “Are you going to change our name?” Beacon’s reply was, “No, you’re proud of your company’s name. Your customers respect your name.” For Beacon, maintaining customer relationships is a key ingredient in encouraging local entrepreneurship and keeping talented, ambitious employees.
The first major acquisition was Quality Roofing Supply Company, with sales of $51 million. Then Beacon ventured into Canada with the acquisition of Groupe Bedard, a $27 million, best-of-class roofing distributor in Quebec, and Exeltherm Supply, a $49-million distributor based in Ontario. Beacon increased its size by 67% in 2000 with the acquisition of Best Distributing, a fine company founded in the late 1800s and the dominant roofing distributor in the Carolinas, with sales of $140 million. “Growing by adding Best’s regional and national reputation, its professional employees and its quality customers was a big milestone for Beacon,” recalls Drew. Beacon soon grew by another 60% with the acquisition of The Roof Center, with locations in Maryland and Virginia, and West End Lumber in Texas.

After local and regional companies became affiliated with Beacon, their sales grew and their profitability increased. In some cases, this happened by capitalizing on the new opportunities that became available to them with Beacon’s financial leverage. In other cases, local affiliates refocused on core competencies and shed unprofitable product lines with the aid of Beacon’s branch-level financial discipline.

As Beacon converted its major acquisitions, the company developed an effective integration process. Shortly after acquiring a company, Beacon sends a team of experienced Beacon employees from existing operations to the new firm for several weeks. The team supports the conversion to Beacon management systems, including the common, company-wide information-technology system. This major investment in time and effort is vital in integrating the systems and orienting the new employees to Beacon policies and procedures, as well as its core values, like teamwork.

While the newly acquired companies adopt Beacon systems, they retain their control over local sales and marketing practices. Branch managers know their customers and understand their distinct local markets. Their experience and expertise are fundamental to Beacon’s success. They are entrepreneurs who are recognized and rewarded for their contributions and their adherence to the disciplines of Beacon’s financial controls.
Branch managers can make quick decisions because of Beacon’s flat corporate organizational structure. Generally, there is only one manager — a regional vice president—between a branch manager and the CEO. A lean corporate office staff (with only 1% of company employees) assists the branches in reaching their full potential. This means providing centralized management of corporate-wide functions, such as information systems. Beacon’s open-access information systems deliver comprehensive financial data to branch managers every day.

A benchmarking system enables them to see how their performance stacks up against that of their peers. And, it encourages the sharing of effective practices among the branches at regional meetings.

By 2002, Beacon had surpassed $500 million in revenues and was poised for another new beginning. Early in fiscal 2004, Robert R. Buck joined the company as President and CEO, and the company set its sights on becoming the pre-eminent roofing distributor in North America. Bob came from Cintas Corporation, where he was president of the Uniform Rental Division. Under his stewardship, the division’s annual sales increased over 300% from $600 million to $2.5 billion. Bob spent over 20 years at Cintas. In 1983 he oversaw Cintas’s initial public offering.
Upon joining Beacon, Bob traveled the U.S. and Canada, visiting branches, meeting Beacon’s managers and employees, and getting a feel for the company and the business. As a result, he was able to articulate Beacon’s enduring personal and business values, ensuring an understanding and legacy of how and why people would be the foundation for Beacon’s continued growth and success. He shared these collected values with all employees and developed “Best Environment” materials for use in each Beacon workplace.

To reach its goal of industry leadership, Beacon needed to tap the equity market, and the company first offered stock to the public through an initial public offering (IPO) on September 23, 2004 through the NASDAQ Exchange. Without missing a step, Beacon marched into a new era of growth as a publicly traded company. In 2005, The Wall Street Journal ranked Beacon as the sixth fastest-growing new stock issue behind Google.

Beacon continued to acquire successful distributors across North America and drive organic growth in existing operations. Within three months of the IPO, Beacon acquired Atlanta based JGA Corp., which had sales of $74 million. This was followed by Beacon’s largest acquisition, Shelter Distribution, with sales of $313 million and 50 branches. Also added were ISI, Commercial Supply, Easton Wholesale, Mississippi Roofing, Alabama Roofing, and Southern California’s Pacific Supply. Minnesota’s Roof Depot and RSM Supply in Arkansas, Missouri and Oklahoma were added late in fiscal 2006.

Sales climbed rapidly to surpass $850 million in fiscal 2005 and $1.5 billion in fiscal 2006. In April of 2007, Beacon acquired North Coast Commercial Roofing Systems based in Twinsburg, Ohio which had sales in excess of $250 million. This strategic acquisition moved Beacon into three new states-Ohio, New York and West Virginia. Operations now encompassed 172 branches in 37 states and 3 Canadian provinces.

As Beacon has grown, specialized skills have been added at the corporate level including a sales and marketing department that has the following goals: build sales talent within the organization through sales training programs; aid local sales people in strategic and tactical sales skill development; implement systematic selling processes and disciplines; and aid branches in developing customer relations and new customer acquisition skills.

Beacon has achieved its growth by cultivating the best customers and forging strong partnerships with them. In founder Drew Logie’s words, “We focus not on what our customers can do for us, but what we can do for our customers. We are dedicated to offering high quality products along with responsive service to resolve contractors’ problems quickly and effectively.”

Beacon employees at all levels adhere to the company’s enduring values in their dealings with one another, customers, vendors and other constituents. These values, originated over the years by Drew Logie and formally articulated and institutionalized by Bob Buck, have become embedded in the fabric of the Beacon culture. Consequently, the values have provided the security and motivation that have enabled Beacon’s employees to build a successful company. The strong commitment to these values by Beacon’s employees has given the company a great deal of confidence in its future success and a continued, strong reputation to build on. Or, in Bob Buck’s words, “When a company gets the people part of the equation right, everything else falls into place.”

People

They are THE key to each Beacon distributor's quality of service. And, they are one big reason why each Beacon regional distributor is such an attractive outlet to manufacturers of quality roofing products.

Beacon's added resources make it possible for each distributor to compensate employees quite competitively. The Beacon family's health plan is one of the strongest in the industry. Employees also benefit from 100 percent company-paid life insurance, short-term and long-term disability, as well as 401K plan profit sharing.They receive sales and product training and enjoy opportunities for career advancement.

Our Culture

The foundation of our business is the quality people who staff it and the corporate culture that supports their efforts. Over the years we have developed a corporate culture to share personal and business values across the organization, and to help our company and our associates grow and prosper.

Our personal values are based up these foundational principles:
-Honesty and Integrity in everything we do.
-Loyalty to each other and our company.
-Caring and Compassionate regarding each other.
-Pride in a job well done.
-Morality in our dealing with each other, our customers, vendors and other constituents.

Our business values encompass these traits and characteristics:

-Results Oriented – It is important to deliver on our promises.
-Strong Work Ethic – Something to be admired.
-Perseverance – Setbacks will occur, but this value will keep us focused on achieving our goals.
-Passion – We love our business and our people. Passion for one’s work is key to our success.
-Frugality – We take care of the resources entrusted to us. Waste is not fair to those who trust us.
-Credibility – We deliver on our commitments. We can be counted on!
-Teamwork – We recognize that we depend on each other in all we do.
-Discipline – No shortcuts. Before decisions are made, we have the discipline to research all the facts. We seek good advice before moving ahead.

Our goal is to live by these values each and every day. At Beacon Roofing Supply we believe that quality people create quality service. And, the combination of those two attracts manufactures of quality products. We are fortunate and proud to be able to look forward to the long-term success of our company with this culture.

Contact

Beacon Roofing Supply, Inc.
505 Huntmar Park Dr.
Suite 300
Herndon, VA 20170
Phone: 571-323-3939
FAX: 703-437-1919

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