10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from  to

Commission File Number 000-50924

BEACON ROOFING SUPPLY, INC.

(Exact name of registrant as specified in its charter)

Delaware	36-4173371
(State or other jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

505 Huntmar Park Drive, Suite 300, Herndon, VA 20170

(Address of Principal Executive Offices) (Zip Code)

(571) 323-3939

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 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 submitted electronically and posted on its corporate Web site, if any, every Interactive Data File 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 such files).     Yes   ☒     No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

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 if the registrant has elected not to use the extended transition period for complying with 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 Exchange Act).     Yes  ☐    No  ☒

As of July 31, 2018, 68,111,464 shares of common stock, par value $0.01 per share, of the registrant were outstanding.

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BEACON ROOFING SUPPLY, INC.

FORM 10-Q

For the Quarter Ended June 30, 2018

TABLE OF CONTENTS

Part I.		Financial Information (unaudited)
	Item 1.	Condensed Consolidated Financial Statements
		Consolidated Balance Sheets	4
		Consolidated Statements of Operations	5
		Consolidated Statements of Comprehensive Income	6
		Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition And Results of Operations	32
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
	Item 4.	Controls and Procedures	48
Part II.		Other Information	49
	Item 6.	Exhibits	49
Signatures			50

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BEACON ROOFING SUPPLY, INC.

Consolidated Balance Sheets

(Unaudited; In thousands, except share and per share amounts)

	June 30,			September 30,			June 30,
	2018			2017			2017
Assets
Current assets:
Cash and cash equivalents	$	27,551		$	138,250		$	33,055
Accounts receivable, less allowance of $13,963, $11,829 and $13,253    as of June 30, 2018, September 30, 2017 and June 30,    2017, respectively		1,077,888			704,527			670,977
Inventories, net		1,165,389			551,924			641,425
Prepaid expenses and other current assets		337,589			209,138			221,477
Total current assets		2,608,417			1,603,839			1,566,934
Property and equipment, net		288,708			156,129			156,951
Goodwill		2,321,180			1,251,986			1,256,014
Intangibles, net		1,371,005			429,069			442,962
Other assets, net		1,511			8,534			1,511
Total Assets	$	6,590,821		$	3,449,557		$	3,424,372
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	719,686		$	503,697		$	387,579
Accrued expenses		520,952			261,297			280,315
Current portions of long-term debt		19,714			14,141			13,762
Total current liabilities		1,260,352			779,135			681,656
Borrowings under revolving lines of credit, net		482,489			3,205			449,615
Long-term debt, net		2,494,308			721,268			721,685
Deferred income taxes, net		93,928			138,383			142,116
Long-term obligations under equipment financing and other, net		15,979			23,213			26,025
Other long-term liabilities		6,319			2,547			2,387
Total liabilities		4,353,375			1,667,751			2,023,484
Commitments and contingencies (Note 9)
Convertible preferred stock; $0.01 par value; 400,000 shares authorized, issued and outstanding as of June 30, 2018; none authorized, issued and outstanding as of September 30, 2017 or June 30, 2017	$	399,195		$	-		$	-
Stockholders' equity:
Common stock (voting); $0.01 par value; 100,000,000 shares authorized;    68,105,113 issued and outstanding as of June 30, 2018; 67,700,858    issued and outstanding as of September 30, 2017; 60,361,035 issued    and outstanding at June 30, 2017		681			677			603
Undesignated preferred stock; 5,000,000 shares authorized,    none issued or outstanding		-			-			-
Additional paid-in capital		1,063,137			1,047,506			714,608
Retained earnings		792,502			748,186			703,055
Accumulated other comprehensive loss		(18,069	)		(14,563	)		(17,378	)
Total stockholders' equity		1,838,251			1,781,806			1,400,888
Total Liabilities and Stockholders' Equity	$	6,590,821		$	3,449,557		$	3,424,372

See accompanying Notes to Condensed Consolidated Financial Statements

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BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Operations

(Unaudited; In thousands, except share and per share amounts)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018			2017
Net sales	$	1,934,951	$	1,213,894	$	4,482,555		$	3,086,802
Cost of products sold		1,441,057		916,140		3,380,531			2,333,504
Gross profit		493,894		297,754		1,102,024			753,298
Operating expense:
Selling, general and administrative		323,194		183,600		858,534			538,288
Depreciation		15,811		8,579		41,640			25,122
Amortization		50,076		20,704		105,339			61,116
Total operating expense		389,081		212,883		1,005,513			624,526
Income (loss) from operations		104,813		84,871		96,511			128,772
Interest expense, financing costs, and other		37,348		13,397		99,486			39,239
Income (loss) before provision for income taxes		67,465		71,474		(2,975	)		89,533
Provision for (benefit from) income taxes		18,090		26,815		(53,291	)		33,800
Net income (loss)	$	49,375	$	44,659	$	50,316		$	55,733
Dividends on preferred shares1		6,000		-		12,000			-
Net income (loss) attributable to common shareholders	$	43,375	$	44,659	$	38,316		$	55,733
Weighted-average common stock outstanding:
Basic		68,086,387		60,311,923		67,976,980			60,131,546
Diluted		69,148,143		61,350,843		69,240,040			61,163,591
Net income (loss) per share2:
Basic	$	0.56	$	0.74	$	0.52		$	0.93
Diluted	$	0.55	$	0.73	$	0.51		$	0.91

_____________________

  ¹ For the three months ended June 30, 2018, $6.0 million is comprised entirely of cumulative dividends that are undeclared as of period end. For the nine months ended June 30, 2018, $12.0 million is comprised of the $6.0 million undeclared cumulative dividends as well as an additional $6.0 million of preferred share dividends that had been declared and paid as of period end.

  ² See Note 4 for detailed calculations and further discussion.

See accompanying Notes to Condensed Consolidated Financial Statements

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BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Comprehensive Income

(Unaudited; In thousands)

	Three Months Ended June 30,					Nine Months Ended June 30,
	2018			2017		2018			2017
Net income (loss)	$	49,375		$	44,659	$	50,316		$	55,733
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,535	)		1,730		(3,506	)		891
Total other comprehensive income (loss)		(1,535	)		1,730		(3,506	)		891
Comprehensive income (loss)	$	47,840		$	46,389	$	46,810		$	56,624

See accompanying Notes to Condensed Consolidated Financial Statements

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BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Cash Flows

(Unaudited; In thousands)

	Nine Months Ended June 30,
	2018			2017
Operating Activities
Net income (loss)	$	50,316		$	55,733
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		146,979			86,238
Stock-based compensation		13,133			11,227
Certain interest expense and other financing costs		11,549			3,989
Loss on debt extinguishment		1,726			-
Gain on sale of fixed assets		(1,131	)		(726	)
Deferred income taxes1		(48,855	)		6,625
Changes in operating assets and liabilities, net of the effects of businesses acquired:
Accounts receivable		(52,024	)		(28,309	)
Inventories		(299,881	)		(141,942	)
Prepaid expenses and other assets		(19,511	)		(55,973	)
Accounts payable and accrued expenses		195,948			137,290
Other liabilities		732			21
Net cash provided by (used in) operating activities		(1,019	)		74,173
Investing Activities
Purchases of property and equipment		(34,978	)		(31,882	)
Acquisition of businesses, net		(2,715,429	)		(128,533	)
Proceeds from the sale of assets		750			1,839
Net cash provided by (used in) investing activities		(2,749,657	)		(158,576	)
Financing Activities
Borrowings under revolving lines of credit		2,122,949			1,721,927
Repayments under revolving lines of credit		(1,631,978	)		(1,633,570	)
Borrowings under term loan		970,000			-
Repayments under term loan		(443,425	)		(3,375	)
Borrowings under senior notes		1,300,000			-
Payment of debt issuance costs		(65,788	)		-
Repayments under equipment financing facilities and other		(8,604	)		(7,780	)
Proceeds from issuance of convertible preferred stock		400,000			-
Payment of stock issuance costs		(1,279	)		-
Payment of dividends on preferred stock		(6,000	)		-
Proceeds from issuance of common stock related to equity awards		6,950			9,994
Taxes paid related to net share settlement of equity awards		(3,975	)		(1,172	)
Net cash provided by (used in) financing activities		2,638,850			86,024
Effect of exchange rate changes on cash and cash equivalents		1,127			48
Net increase (decrease) in cash and cash equivalents		(110,699	)		1,669
Cash and cash equivalents, beginning of period		138,250			31,386
Cash and cash equivalents, end of period	$	27,551		$	33,055
Supplemental cash flow information
Cash paid during the period for:
Interest	$	91,662		$	49,656
Income taxes, net of tax refunds		33,751			37,814

_____________________

  ¹ Includes impact of provisional amounts recognized relating to estimated impact of Tax Cuts and Jobs Act of 2017 – see Note 12 for further discussion.

See accompanying Notes to Condensed Consolidated Financial Statements

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BEACON ROOFING SUPPLY, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Company Overview

Beacon Roofing Supply, Inc. (the “Company”) was incorporated in the state of Delaware on August 22, 1997 and is the largest publicly traded distributor of residential and non-residential roofing materials and complementary building products in the United States and Canada.

On January 2, 2018, the Company finalized its acquisition of Allied Building Products Corp., a New Jersey corporation, and an affiliated entity (together “Allied”) for $2.625 billion, subject to certain working capital and other adjustments (see Note 3 for further discussion). Allied engages in the distribution of roofing materials, drywall, ceiling tile, and related accessories in the United States and was a wholly-owned subsidiary of Oldcastle Distribution, Inc.

The Company operates its business under regional and local trade names and, as of June 30, 2018, the Company serviced customers in all 50 states within the United States and 6 provinces in Canada. The Company’s material subsidiaries are Beacon Sales Acquisition, Inc., Allied Building Products, LLC and Beacon Roofing Supply Canada Company.

2. Summary of Significant Accounting Policies

Basis of Presentation

Beacon Roofing Supply, Inc. (the “Company”) prepared the condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the requirements of the Securities and Exchange Commission (“SEC”). As permitted under those rules, certain footnotes or other financial information have been condensed or omitted. Certain prior period amounts have been reclassified to conform to current period presentation. The balance sheet as of June 30, 2017 has been presented for a better understanding of the impact of seasonal fluctuations on the Company’s financial condition.

In management’s opinion, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and nine months ended June 30, 2018 are not necessarily indicative of the results to be expected for the twelve months ending September 30, 2018 (“fiscal year 2018” or “2018”).

The three-month periods ended June 30, 2018 and 2017 each had 64 business days and the nine-month periods ended June 30, 2018 and 2017 each had 189 business days, respectively.

These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in the Company’s fiscal year 2017 (“2017”) Annual Report on Form 10-K for the year ended September 30, 2017.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Significant items subject to such estimates include inventories, purchase price allocations, recoverability of goodwill and intangibles, and income taxes. Actual amounts could differ from those estimates.

Recent Accounting Pronouncements—Adopted

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” This guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The provisions of this standard were effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2016, and early adoption was permitted. The Company adopted this guidance effective October 1, 2017. As a result, the Company now records excess tax benefits (or deficiencies) as income tax benefits (or expenses) in our consolidated statements of operations rather than as additional paid-in-capital in its consolidated balance sheets. ASU 2016-09 allowed for this guidance to be applied prospectively or retrospectively.  The Company elected to apply this guidance prospectively, and recognized $0.1 million and $3.0 million of excess tax benefits in our consolidated statement of operations related to equity award transactions executed in the period for the three and nine months ended June 30, 2018. To align with the prospective treatment in our consolidated statements of operations, the Company now classifies excess tax benefits (or deficiencies) along with

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accrued income taxes in operating activities within our consolidated statements of cash flows. The Company elected to retain its historical approach to accounting for forfeitures and statutory tax withholding requirements, therefore these specific aspects of the new guidance had no impact on its financial statements and related disclosures.

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash.” This guidance standardizes the presentation of changes to restricted cash on the statement of cash flows by requiring that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amount generally described as restricted cash or restricted cash equivalents. The provisions of this standard are effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company adopted this guidance effective October 1, 2017 and applied it retrospectively, and the standard did not have a material impact on the Company’s financial statement and related disclosures.

Recent Accounting Pronouncements—Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, and will replace most existing revenue recognition guidance when it becomes effective. The new standard is effective for public business entities for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted for annual reporting periods beginning after December 15, 2016. The standard permits the use of either the full retrospective or modified retrospective adoption methods. The Company is continuing to perform a detailed evaluation, using a five-step model specified in the guidance, to assess the impacts of the new standard on our legacy and newly acquired businesses, and expects to apply the guidance using the modified retrospective method. Based on the Company’s knowledge of its revenue transactions, the Company does not expect the adoption of this new guidance to have a material impact on its financial statements, but does expect that it will result in additional revenue recognition disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases.” This guidance will replace most existing accounting for lease guidance when it becomes effective. This new standard is effective using the modified retrospective approach for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2018, and early adoption is permitted. In July 2018, the FASB amended the new lease standard which, among other changes, allows a company to elect to adopt ASU 2016-02 using a transition option whereby a cumulative effect adjustment is recorded to the opening balance of its retained earnings on the adoption date. The guidance will require the Company to record a right of use asset and a lease liability for most of the Company’s leases, including those currently treated as operating leases. The Company is in the process of evaluating the impact of the standard and has decided that it will use the practical expedients outlined in the transition guidance. The scope of the overall impact on the Company’s financial statements and related disclosures is still being quantified.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impact that this guidance may have on its financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business.” This guidance is intended to assist entities when evaluating when a set of transferred assets and activities constitutes a business. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Accounting for Goodwill Impairment.” This guidance is intended to introduce a simplified approach to measurement of goodwill impairment, eliminating the need for a hypothetical purchase price allocation and instead measuring impairment by the amount a reporting unit’s carrying value exceeds its fair value. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In May 2017, the FASB issued ASU 2017-09, “Scope of Modification Accounting.” This guidance is intended to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

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In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income.”This guidance is intended to address the accounting treatment for the tax effects on items within accumulated other comprehensive income as a result of the adoption of the Tax Cuts and Jobs Act of 2017 (see Note 12 for further discussion). This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2018, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

3. Acquisitions

Allied Building Products Corp.

On January 2, 2018 (the “Closing Date”), the Company completed its previously announced acquisition (the “Allied Acquisition”) of all the outstanding capital stock of Allied Building Products Corp. and an affiliated entity (together, “Allied”), pursuant to that certain Stock Purchase Agreement, dated August 24, 2017 (the “Stock Purchase Agreement”), among the Company, Oldcastle, Inc., as parent, and Oldcastle Distribution, Inc., as seller, for approximately $2.625 billion in cash, subject to a working capital and certain other adjustments as set forth in the Stock Purchase Agreement (the “Purchase Price”). As of June 30, 2018, the Company recorded a net working capital adjustment of $88.1 million.  

In connection with the Allied Acquisition, on the Closing Date the Company entered into (i) a new term loan agreement with Citibank, N.A., providing for a term loan B facility with an initial commitment of $970.0 million and (ii) an amended and restated credit agreement with Wells Fargo Bank, N.A., providing for a senior secured asset-based revolving credit facility with an initial commitment of $1.30 billion. Base borrowing rates on these facilities are at LIBOR plus 1.25% and LIBOR plus 2.25%, respectively.

In connection with the Allied Acquisition, on the Closing Date, the Company completed the sale of 400,000 shares of Series A Cumulative Convertible Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), with an aggregate liquidation preference of $400.0 million, at a purchase price of $1,000 per share, to CD&R Boulder Holdings, L.P., pursuant to that certain Investment Agreement, dated as of August 24, 2017, with CD&R Boulder Holdings, L.P. and Clayton, Dubilier & Rice Fund IX, L.P. (solely for the purpose of limited provisions therein) (the “Convertible Preferred Stock Purchase”). The $400.0 million in proceeds from the Convertible Preferred Stock Purchase were used to finance, in part, the Purchase Price. The Preferred Stock is convertible perpetual participating preferred stock of the Company, and conversion of the Preferred Stock into $0.01 par value shares of the Company’s common stock will be at a conversion price of $41.26 per share. The Preferred Stock accumulates dividends at a rate of 6.0% per annum (payable in cash or in-kind, subject to certain conditions). The Preferred Stock is not mandatorily redeemable; therefore it is classified on the Company’s consolidated balance sheets as mezzanine equity and recognized at $399.2 million (the $400.0 million proceeds received on the Closing Date, net of $0.8 million of issuance costs).   

Allied’s results of operations have been included with Company’s consolidated results beginning January 2, 2018. Allied distributed products in 208 locations across 31 states as of the date of the close.

The Allied Acquisition has been accounted for as a business combination in accordance with the requirements of ASC 805 Business Combinations. The acquisition price has been allocated among assets acquired and liabilities assumed at fair value based on information currently available, with the excess recorded as goodwill. The goodwill recognized is attributable primarily to expected synergies from the Allied assembled workforce operating the branches as part of a larger network and the value stemming from the addition of both new customers and an established new line of business (interiors). The Company has recorded purchase accounting entries on a preliminary basis for the Allied Acquisition, detailed as follows (in thousands):

	January 2, 2018						January 2, 2018
	(as reported at March 31, 2018)			Adjustments			(as adjusted at June 30, 2018)
Cash	$	19,322		$	(19,153	)	$	169
Accounts receivable		315,485			7,477			322,962
Inventory		322,705			(8,047	)		314,658
Prepaid and other current assets		59,279			15,865			75,144
Property, plant, and equipment		139,528			(168	)		139,360
Goodwill		1,130,635			(61,137	)		1,069,498
Intangible assets		1,037,000			10,000			1,047,000
Current liabilities		(271,252	)		18,204			(253,048	)
Non-current liabilities		(6,820	)		4,175			(2,645	)
Total purchase price	$	2,745,882		$	(32,784	)	$	2,713,098

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The purchase accounting entries above assume the Company will make a Section 338(h)(10) election under the current U.S. tax code. As of June 30, 2018 the Company had not made this election, but expects to do so in in the fourth quarter of fiscal year 2018 and has reflected the impact of this future election in its fiscal year 2018 tax provision accordingly. Upon making the Section 338(h)(10) election, the Company will then determine the amount of Allied goodwill that will become tax deductible. All of the Company’s goodwill plus the indefinite-lived trade name are tested for impairment annually, and all acquired goodwill and intangible assets are subject to review for impairment should future indicators of impairment develop. There were no material contingencies assumed as part of the Allied acquisition.

Net sales from the Allied Acquisition included in the Company’s statements of operations for the nine months ended June 30, 2018 were $1.32 billion. Net income (loss) from the Allied Acquisition included in the Company’s statements of operations for the nine months ended June 30, 2018 was $15.8 million.   

The following table represents the unaudited pro forma consolidated net sales and net income (loss) for the Company for the periods indicated (in thousands):

	Nine Months Ended June 30, 2018		Nine Months Ended June 30, 2017
	(unaudited)
Net sales	$	5,148,204	$	4,958,292
Net income (loss)		11,394		15,654

The above pro forma results have been calculated by combining the historical results of the Company and Allied as if the Allied Acquisition had occurred on the first day of the fiscal year (October 1) for each of the periods presented. The income tax provision used to calculate net income (loss) for the respective periods presented has been adjusted to reflect the effective tax rate for the annual periods as if it had been based on the resulting, combined results. The pro forma results include estimates for intangible asset amortization, depreciation, interest expense and debt issuance costs and are subject to change once final asset values have been determined. No other material pro forma adjustments were deemed necessary to conform to the Company’s accounting policies or for any other situation. The pro forma information is not necessarily indicative of the results that would have been achieved had the transactions occurred on the first day of the fiscal years presented or that may be achieved in the future.

Additional Acquisitions – Fiscal Year 2018

During the nine months ended June 30, 2018, the Company acquired 1 branch from the following acquisition:

• On May 1, 2018, the Company acquired Tri-State Builder’s Supply, a wholesale supplier of roofing, siding, windows, doors and related building products with 1 branch located in Duluth, Minnesota and annual sales of approximately $6 million.

The Company recorded the acquired assets and liabilities related to this transaction at their estimated fair value as of the respective acquisition date, with resulting goodwill of $1.3 million (all of which is deductible for tax purposes) and $0.8 million in intangible assets associated with this acquisition.

Additional Acquisitions – Fiscal Year 2017

During fiscal year 2017, the Company acquired 23 branches from the following five acquisitions:

• On December 16, 2016, the Company purchased certain assets of BJ Supply Company, a distributor of roofing and related building products with 1 branch serving Pennsylvania and New Jersey and annual sales of approximately $4 million. The Company has finalized the acquisition accounting entries for this transaction.

• On January 3, 2017, the Company acquired American Building & Roofing, Inc., a distributor of mainly residential roofing and related building products with 7 branches around Washington State and annual sales of approximately $36 million. The Company has finalized the acquisition accounting entries for this transaction.

• On January 9, 2017, the Company acquired Eco Insulation Supply, a distributor of insulation and related accessories with 1 branch serving Connecticut, Southern New England and the New York City metropolitan area and annual sales of approximately $8 million. The Company has finalized the acquisition accounting entries for this transaction.

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• On March 1, 2017, the Company acquired Acme Building Materials, Inc., a distributor of residential roofing and related building products with 3 branches in Eastern Michigan and annual sales of approximately $13 million. The Company has finalized the acquisition accounting entries for this transaction.

• On May 1, 2017, the Company purchased certain assets of Lowry’s Inc., a distributor of waterproofing and concrete restoration materials with 11 branches operating in California, Arizona, Utah and Hawaii and annual sales of approximately $76 million. The Company has finalized the acquisition accounting entries for this transaction.

The Company recorded the acquired assets and liabilities related to these transactions at their estimated fair values as of the respective acquisition dates, with resulting goodwill of $53.0 million (all of which is deductible for tax purposes) and $47.4 million in intangible assets associated with these other acquisitions.

For those acquisitions where the acquisition accounting entries have yet to be finalized, the Company’s allocation of the purchase price is subject to change on receipt of additional information, including, but not limited to, the finalization of asset valuations (intangible and fixed) and income tax accounting as well as the Company’s continued review of the assumed liabilities that may result in the recognition of changes to the carrying amounts on the opening balance sheet and a related adjustment to goodwill.

4. Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common shareholders by the fully diluted weighted-average number of common shares outstanding during the period.

Holders of Preferred Stock participate in dividends on an as-converted basis when declared on common shares. As a result, Preferred Stock is classified as a participating security and thereby requires the allocation income that would have otherwise been available to common shareholders when calculating net income (loss) per share.

Diluted net income (loss) per share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common shareholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.  

The following table presents the components and calculations of basic and diluted net income (loss) per share for each period presented (in thousands, except share and per share amounts):

	Three Months Ended June 30,					Nine Months Ended June 30,
	2018			2017		2018			2017
Net income (loss)	$	49,375		$	44,659	$	50,316		$	55,733
Dividends on preferred shares		(6,000	)		-		(12,000	)		-
Net income (loss) attributable to common shareholders	$	43,375		$	44,659	$	38,316		$	55,733
Undistributed income allocated to participating securities		(5,406	)		-		(3,293	)		-
Net income (loss) attributable to common shareholders - basic and diluted	$	37,969		$	44,659	$	35,023		$	55,733
Weighted-average common shares outstanding - basic		68,086,387			60,311,923		67,976,980			60,131,546
Effect of common share equivalents		1,061,756			1,038,920		1,263,060			1,032,045
Weighted-average common shares outstanding - diluted		69,148,143			61,350,843		69,240,040			61,163,591
Net income (loss) per share - basic	$	0.56		$	0.74	$	0.52		$	0.93
Net income (loss) per share - diluted	$	0.55		$	0.73	$	0.51		$	0.91

The following table includes the number of shares that may be dilutive common shares in the future. These shares were not included in the computation of diluted net income (loss) per share because the effect was either anti-dilutive or the requisite performance conditions were not met:

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	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Stock options		484,358		247,102		349,281		359,757
Restricted stock units		355,891		-		148,638		82,520
Preferred Stock		9,694,619		-		6,392,056		-

5. Stockholders’ Equity

The following table presents the activity included in stockholders’ equity during the nine months ended June 30, 2018 (in thousands, except share amounts):

											Accumulated
	Common Stock				Additional Paid-in			Retained			Other Comprehensive			Total Stockholders'
	Shares		Amount		Capital			Earnings			Loss			Equity
Balance at September 30, 2017		67,700,858	$	677	$	1,047,506		$	748,186		$	(14,563	)	$	1,781,806
Issuance of common stock, net of shares withheld for taxes		404,255		4		2,972			-			-			2,976
Issuance costs related to secondary offering of common stock		-		-		(474	)		-			-			(474	)
Stock-based compensation		-		-		13,133			-			-			13,133
Other comprehensive income (loss)		-		-		-			-			(3,506	)		(3,506	)
Net income (loss)		-		-		-			50,316			-			50,316
Dividends on preferred shares1		-		-		-			(6,000	)		-			(6,000	)
Balance at June 30, 2018		68,105,113	$	681	$	1,063,137		$	792,502		$	(18,069	)	$	1,838,251

________________________________

¹ Amount represents only dividends that have been declared as of June 30, 2018.

Common Stock

The Company is authorized to issue 100 million shares of common stock. As of June 30, 2018, September 30, 2017, and June 30, 2017 there were 68,105,113, 67,700,858 and 60,361,035 shares of common stock issued and outstanding, respectively.

Accumulated Other Comprehensive Loss

Other comprehensive income (loss) is comprised of certain gains and losses that are excluded from net income under GAAP and instead recorded as a separate element of stockholders’ equity.

The following table summarizes the components of and changes in accumulated other comprehensive loss (in thousands):

	Foreign Currency Translation			Accumulated Other Comprehensive Loss
Balance as of September 30, 2017	$	(14,563	)	$	(14,563	)
Other comprehensive income before reclassifications		(3,506	)		(3,506	)
Reclassifications out of other comprehensive loss		-			-
Balance as of June 30, 2018	$	(18,069	)	$	(18,069	)

6. Stock-based Compensation

On February 9, 2016, the shareholders of the Company approved the Amended and Restated Beacon Roofing Supply, Inc. 2014 Stock Plan (the “2014 Plan”). The 2014 Plan provides for discretionary awards of stock options, stock awards, restricted stock units, and stock appreciation rights (“SARs”) for up to 5,000,000 shares of common stock to selected employees and non-employee directors. The 2014 Plan mandates that all forfeited, expired, and withheld shares, including those from the predecessor plans, be returned to the 2014 Plan and made available for issuance. As of June 30, 2018, there were 3,748,856 shares of common stock available for issuance.

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Prior to the 2014 Plan, the Company maintained the amended and restated Beacon Roofing Supply, Inc. 2004 Stock Plan (the “2004 Plan”). Upon shareholder approval of the 2014 Plan, the Company ceased issuing equity awards from the 2004 Plan and mandated that all future equity awards will be issued from the 2014 Plan.

For all equity awards granted prior to October 1, 2014, in the event of a change in control of the Company, all awards are immediately vested. Beginning in fiscal 2015, equity awards contained a “double trigger” change in control mechanism. Unless an award is continued or assumed by a public company in an equitable manner, an award shall become fully vested immediately prior to a change in control (at 100% of the grant target in the case of a performance-based restricted stock unit award). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award, unless there is a qualifying termination within one-year following the change in control, in which event the award shall immediately become fully vested (at 100% of the grant target in the case of a performance-based restricted stock unit award).

Stock Options

Non-qualified stock options generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in three annual installments over the three-year period following the grant dates.

The fair values of the options granted during the nine months ended June 30, 2018 were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Risk-free interest rate		2.10	%
Expected volatility		26.43	%
Expected life (in years)		5.46
Dividend yield	-

The following table summarizes all stock option activity for the nine months ended June 30, 2018 (in thousands, except share, per share, and time period amounts):

	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value1
Balance as of September 30, 2017		2,084,228		$	28.84		6.1	$	46,714
Granted		276,370			55.17
Exercised		(277,589	)		25.04
Canceled/Forfeited		(54,669	)		40.15
Expired		(1,991	)		15.28
Balance as of June 30, 2018		2,026,349		$	32.66		5.9	$	24,544
Vested and expected to vest after June 30, 2018		2,008,997		$	32.52		5.9	$	24,497
Exercisable as of June 30, 2018		1,470,856		$	27.30		4.9	$	22,871

________________________________

¹ Aggregate intrinsic value as represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.

During the three months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to stock options of $1.0 million and $1.1 million, respectively. During the nine months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to stock options of $2.9 million and $3.7 million, respectively. As of June 30, 2018, there was $5.7 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.9 years.

The following table summarizes additional information on stock options for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,
	2018		2017
Weighted-average fair value of stock options granted	$	15.86	$	14.21
Total grant date fair value of stock options vested		4,172		5,504
Total intrinsic value of stock options exercised		8,995		9,617

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Restricted Stock Units

Restricted stock unit (“RSU”) awards granted to employees are subject to continued employment and generally vest on the third anniversary of the grant date. The Company also grants certain RSU awards to management that contain one or more additional vesting conditions tied directly to a defined performance metric for the Company. The actual number of RSUs that will vest can range from 0% to 200% of the original grant amount, depending upon actual Company performance below or above the established performance metric targets. The Company estimates performance in relation to the defined targets when determining the projected number of RSUs that are expected to vest and calculating the related stock-based compensation expense.

RSUs granted to non-employee directors are subject to continued service and vest on the first anniversary of the grant date (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the non-employee director’s service on the Board has terminated, and for non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director’s termination of service on the board. Beginning in fiscal year 2016, the Company enacted a policy that allows any non-employee directors who have Beacon equity holdings (defined as common stock and outstanding vested equity awards) with a total fair value that is greater than or equal to five times the annual Board cash retainer to elect to have any future RSU grants settle simultaneously with vesting.

The following table summarizes all restricted stock unit activity for the nine months ended June 30, 2018:

	RSUs Outstanding			Weighted- Average Grant Date Fair Value
Balance at September 30, 2017		770,973		$	38.95
Granted		370,190			57.40
Performance awards1		41,440			39.56
Released		(191,703	)		31.91
Canceled/Forfeited		(43,082	)		48.84
Balance at June 30, 2018		947,818		$	47.16
Vested and expected to vest after June 30, 20182		961,213		$	47.22

_________________________________

¹ Additional restricted stock units outstanding as a result of the satisfaction of a performance vesting condition prior to the ascribed time-based vesting condition (release date).

² Amount of restricted stock units vested and expected to vest is larger than the balance outstanding at period end due to the impact of certain restricted stock unit awards with performance vesting condition estimates that are greater than 100% as of June 30, 2018.

During the three months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock units of $4.3 million and $2.6 million, respectively. During the nine months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock units of $10.2 million and $7.7 million, respectively. As of June 30, 2018, there was $23.3 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 1.8 years.

The following table summarizes additional information on RSUs for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,
	2018		2017
Weighted-average fair value of RSUs granted	$	57.40	$	47.31
Total grant date fair value of RSUs vested		6,656		4,552
Total intrinsic value of RSUs released		11,041		5,620

7. Goodwill and Intangible Assets

Goodwill

The following table sets forth the change in the carrying amount of goodwill during the nine months ended June 30, 2018 and 2017, respectively (in thousands):

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Balance at September 30, 2016	$	1,197,565
Acquisitions		58,234
Translation and other adjustments		215
Balance at June 30, 2017	$	1,256,014
Balance at September 30, 2017	$	1,251,986
Acquisitions		1,070,823
Translation and other adjustments		(1,629	)
Balance at June 30, 2018	$	2,321,180

The change in the carrying amount of goodwill for the nine months ended June 30, 2018 and 2017 is primarily attributable to the Company’s acquisitions finalized during the respective periods presented (see Note 3 for further discussion).

Intangible Assets

In connection with transactions finalized during the nine months ended June 30, 2018, the Company recorded intangible assets of $1.05 billion ($920.8 million of customer relationships, $6.6 million of beneficial lease arrangements, and $120.0 million of indefinite-lived trademarks). In connection with transactions finalized during fiscal year 2017, the Company recorded intangible assets of $47.4 million ($42.7 million of customer relationships, $4.6 million of amortizable trademarks, and $0.1 million of beneficial lease arrangements).

The following table summarizes intangible assets by category (in thousands, except time period amounts):

	June 30, 2018			September 30, 2017			June 30, 2017			Weighted- Average Remaining Life1 (Years)
Amortizable intangible assets:
Non-compete agreements	$	2,824		$	2,824		$	2,824			2.73
Customer relationships		1,530,434			610,026			605,326			18.85
Trademarks		10,500			10,500			7,650			7.78
Beneficial lease arrangements		7,644			1,060			960			4.94
Total amortizable intangible assets		1,551,402			624,410			616,760
Accumulated amortization		(373,447	)		(268,391	)		(246,848	)
Total amortizable intangible assets, net	$	1,177,955		$	356,019		$	369,912
Indefinite lived trademarks		193,050			73,050			73,050
Total intangibles, net	$	1,371,005		$	429,069		$	442,962

_________________________________

¹ As of June 30, 2018

For the three months ended June 30, 2018 and 2017, we recorded $50.1 million and $20.7 million of amortization expense relating to the above-listed intangible assets, respectively. For the nine months ended June 30, 2018 and 2017, we recorded $105.3 million and $61.1 million of amortization expense relating to the above-listed intangible assets, respectively. The intangible asset lives range from 5 to 20 years and have a weighted-average remaining life of 18.7 years as of June 30, 2018.

The following table summarizes the estimated future amortization expense for intangible assets (in thousands):

Year Ending September 30,
2018 (July - Sept)	$	25,010
2019		189,302
2020		182,398
2021		153,513
2022		125,948
Thereafter		501,784
	$	1,177,955

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8. Financing Arrangements

The following table summarizes all financing arrangements from the respective periods presented (in thousands):

	June 30,			September 30,			June 30,
	2018			2017			2017
Revolving Lines of Credit:
2020 ABL
U.S. Revolver, expires October 1, 2020 1	$	-		$	-		$	437,285
Canada Revolver, expires October 1, 20202		-			3,205			12,330
2023 ABL
U.S. Revolver, expires January 2, 20233		471,857			-			-
Canada Revolver, expires January 2, 20234		10,632			-			-
Less: current portion		-			-			-
Borrowings under revolving lines of credit, net	$	482,489		$	3,205		$	449,615
Term Loans:
Term Loan, matures October 1, 20225	$	-		$	433,440		$	434,177
Term Loan, matures January 2, 20256		931,332			-			-
Less: current portion		(9,700	)		(4,500	)		(4,500	)
Total long-term borrowings under term loans	$	921,632		$	428,940		$	429,677
Senior Notes:
Senior Notes, mature October 20237		293,287			292,328			292,008
Senior Notes, mature November 20258		1,279,389			-			-
Less: current portion		-			-			-
Total long-term borrowings under Senior Notes	$	1,572,676		$	292,328		$	292,008
Long-term debt, net	$	2,494,308		$	721,268		$	721,685
Equipment Financing Facilities and Other:
Equipment financing facilities, various maturities through September 20219	$	12,288		$	12,898		$	14,314
Capital lease obligations, various maturities through November 202110		13,705			19,956			20,973
Total obligations under equipment financing facilities and other		25,993			32,854			35,287
Less: current portion		(10,014	)		(9,641	)		(9,262	)
Long-term obligations under equipment financing and other, net	$	15,979		$	23,213		$	26,025

________________________________ 

¹ Extinguished on January 2, 2018; Effective rate on borrowings of 3.28% as of June 30, 2017

² Extinguished on January 2, 2018; Effective rate on borrowings of 3.70% as of September 30, 2017 and 3.20% as of June 30, 2017

³ Effective rate on borrowings of 3.78% as of June 30, 2018

⁴ Effective rate on borrowings of 3.95% as of June 30, 2018

⁵ Extinguished on January 2, 2018; Interest rate of 3.50% as of September 30, 2017 and June 30, 2017 

⁶ Interest rate of 4.35% as of June 30, 2018

⁷ Interest rate of 6.38% as of June 30, 2018, September 30, 2017 and June 30, 2017  

⁸ Interest rate of 4.88% as of June 30, 2018

⁹ Fixed interest rates ranging from 2.33% to 3.25% as of June 30, 2018, September 30, 2017, and June 30, 2017

¹⁰ Fixed interest rates ranging from 2.72% to 10.39% as of June 30, 2018 , September 30, 2017, and June 30, 2017

Financing - Allied Acquisition

In connection with the Allied Acquisition, the Company entered into various financing arrangements totaling $3.57 billion, including an asset-based revolving line of credit of $1.30 billion (“2023 ABL”), $525.0 million of which was drawn at closing, and a $970.0 million term loan (“2025 Term Loan”). The Company also raised an additional $1.30 billion through the issuance of senior notes (the “2025 Senior Notes”).

The proceeds from these financing arrangements were used to finance the Allied Acquisition, to refinance or otherwise extinguish all third-party indebtedness, to pay fees and expenses associated with the acquisition, and to provide working capital and funds for other general corporate purposes. The Company capitalized new debt issuance costs totaling approximately $65.8 million related to the 2023 ABL, the 2025 Term Loan and the 2025 Senior Notes.

Since the financing arrangements entered into in connection with the Allied Acquisition had certain lenders who also participated in previous financing arrangements entered into by the Company, portions of the transactions were accounted for as either

17

a debt modification or  a debt extinguishment. In accordance with the accounting for debt modification, the Company expensed $2.0 million of debt issuance costs related to the Allied financing arrangements and recognized a loss on debt extinguishment of $1.7 million.  The remainder of the debt issuance costs will be amortized over the term of the Allied financing arrangements.

2023 ABL

On January 2, 2018, the Company entered into a $1.30 billion asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2023 ABL consists of revolving loans in both the United States (“2023 U.S. Revolver”) in the amount of $1.20 billion and Canada (“2023 Canada Revolver”) in the amount of $100.0 million. The 2023 ABL has a maturity date of January 2, 2023. The 2023 ABL has various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The current unused commitment fees on the 2023 ABL are 0.25% per annum.

There is one financial covenant under the 2023 ABL, which is a Consolidated Fixed Charge Ratio. The Consolidated Fixed Charge Ratio is calculated by dividing consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) by Consolidated Fixed Charges (both as defined in the agreement). Per the covenant, the Company’s Consolidated Fixed Charge Ratio has to be a minimum of 1.00 at the end of each fiscal quarter, calculated on a trailing four quarter basis.

The 2023 ABL is secured by a first priority lien over substantially all of the Company’s and each guarantor’s accounts, chattel paper, deposit accounts, books, records and inventory (as well as intangibles related thereto), subject to certain customary exceptions (the “ABL Priority Collateral”), and a second priority lien over substantially all of the Company’s and each guarantor’s other assets, including all of the equity interests of any subsidiary held by the Company or any guarantor, subject to certain customary exceptions (the “Term Priority Collateral”). The 2023 ABL is guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

As of June 30, 2018, the total balance outstanding on the 2023 ABL, net of $11.3 million of unamortized debt issuance costs,   was $482.5 million. The Company also has outstanding standby letters of credit related to the 2023 U.S. Revolver in the amount of $14.8 million as of June 30, 2018.

2025 Term Loan

On January 2, 2018, the Company entered into a $970.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2025 Term Loan requires quarterly principal payments in the amount of $2.4 million, with the remaining outstanding principal to be paid on its January 2, 2025 maturity date. The interest rate is based on a LIBOR rate (with a floor) plus a fixed spread. The Company has the option of selecting a LIBOR period that determines the rate at which interest can accrue on the Term Loan as well as the period in which interest payments are made.

The 2025 Term Loan is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The Term Loan is guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

As of June 30, 2018, the outstanding balance on the 2025 Term Loan, net of $36.2 million of unamortized debt issuance costs, was $931.3 million.

2025 Senior Notes

On October 25, 2017, Beacon Escrow Corporation, a wholly owned subsidiary of the Company (the “Escrow Issuer”), completed a private offering of $1.30 billion aggregate principal amount of 4.875% Senior Notes due 2025 at an issue price of 100%. The 2025 Senior Notes bear interest at a rate of 4.875% per annum, payable semi-annually in arrears, beginning May 1, 2018. The Company anticipates repaying the 2025 Senior Notes at the maturity date of November 1, 2025. Per the terms of the Escrow Agreement, the net proceeds from the 2025 Senior Notes remained in escrow until they were used to fund a portion of the purchase price of the Allied Acquisition payable at closing on January 2, 2018.  

Upon closing of the Allied Acquisition on January 2, 2018, (i) the Escrow Issuer merged with and into the Company, and the Company assumed all obligations under the 2025 Senior Notes; and (ii) all existing domestic subsidiaries of the Company (including the entities acquired in the Allied Acquisition) became guarantors of the 2025 Senior Notes.

As of June 30, 2018, the outstanding balance on the 2025 Senior Notes, net of $20.6 million of unamortized debt issuance costs, was $1.28 billion.

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Financing - RSG Acquisition

In connection with the Roofing Supply Group (“RSG”) acquisition, the Company entered into various financing arrangements totaling $1.45 billion, including an asset-based revolving line of credit (“2020 ABL”) of $700.0 million ($350.0 million of which was drawn at closing) and a $450.0 million term loan (“2022 Term Loan”). The Company also raised an additional $300.0 million through the issuance of senior notes (the “2023 Senior Notes”).

The proceeds from these financing arrangements were used to provide working capital and funds for other general corporate purposes, to refinance or otherwise extinguish all third-party indebtedness for borrowed money under Company’s and RSG’s existing senior secured credit facilities and RSG’s unsecured senior notes due 2020, to finance the acquisition, and to pay fees and expenses associated with the RSG acquisition. The Company incurred debt issuance costs totaling approximately $31.3 million related to the 2020 ABL, 2022 Term Loan and 2023 Senior Notes.  

2020 ABL

On October 1, 2015, the Company entered into a $700.0 million asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2020 ABL had an original maturity date of October 1, 2020 and consisted of revolving loans in both the United States (“2020 U.S. Revolver”) in the amount of $670.0 million and Canada (“Canada Revolver”) in the amount of $30.0 million. The 2020 ABL had various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The full balance of the 2020 ABL was paid on January 2, 2018 in conjunction with the Allied Acquisition.     

2022 Term Loan

On October 1, 2015, the Company entered into a $450.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2022 Term Loan required quarterly principal payments in the amount of $1.1 million, with the remaining outstanding principal to be paid on its original maturity date of October 1, 2022. The interest rate was based on a LIBOR rate (with a floor) plus a fixed spread. The Company had the option of selecting a LIBOR period that determined the rate at which interest would accrue, as well as the period in which interest payments are made. The full balance of the 2022 Term Loan was paid on January 2, 2018 in conjunction with the Allied Acquisition, including the write-off of $0.7 million in debt issuance costs.    

2023 Senior Notes

On October 1, 2015, the Company raised $300.0 million by issuing senior notes due 2023. The 2023 Senior Notes have a coupon rate of 6.38% per annum and are payable semi-annually in arrears, beginning April 1, 2016. There are early payment provisions in the indenture in which the Company would be subject to “make whole” provisions. The Company anticipates repaying the notes at the maturity date of October 1, 2023.

The 2023 Senior Notes are guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

As of June 30, 2018, the outstanding balance on the 2023 Senior Notes, net of $6.7 million of unamortized debt issuance costs, was $293.3 million.

Equipment Financing Facilities and Other

As of June 30, 2018, the Company had a $12.3 million outstanding under equipment financing facilities, with fixed interest rates ranging from 2.33% to 3.25% and payments due through September 2021.

As of June 30, 2018, the Company had $13.7 million of capital lease obligations outstanding. These leases have interest rates ranging from 2.72% to 10.39% with payments due through November 2021.

9. Commitments and Contingencies

Operating Leases

The Company mostly operates in leased facilities, which are accounted for as operating leases. The leases typically provide for a base rent plus real estate taxes. Certain of the leases provide for escalating rents over the lives of the leases and rent expense is recognized over the terms of those leases on a straight-line basis.

At June 30, 2018, the minimum rental commitments under all non-cancelable operating leases with initial or remaining terms of more than one year were as follows (in thousands):

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Year Ending September 30,
2018 (July - Sept)	$	25,318
2019		98,378
2020		85,759
2021		74,622
2022		55,115
Thereafter		128,317
Total minimum lease payments	$	467,509

For the three months ended June 30, 2018 and 2017, rent expense was $27.7 million and $15.8 million, respectively. For the nine months ended June 30, 2018 and 2017, rent expense was $71.4 million and $44.7 million, respectively. Sublet income was immaterial for each of these periods.

Contingencies

The Company is subject to loss contingencies pursuant to various federal, state and local environmental laws and regulations; however, the Company is not aware of any reasonably possible losses that would have a material impact on its results of operations, financial position, or liquidity. Potential loss contingencies include possible obligations to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical or other substances by the Company or by other parties. In connection with its acquisitions, the Company’s practice is to request indemnification for any and all known material liabilities of significance as of the respective dates of acquisition. Historically, environmental liabilities have not had a material impact on the Company’s results of operations, financial position or liquidity.

The Company is subject to litigation from time to time in the ordinary course of business; however the Company does not expect the results, if any, to have a material adverse impact on its results of operations, financial position or liquidity.

10. Geographic Data

The following tables summarize certain geographic information for the periods presented (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Net sales
U.S.	$	1,883,249	$	1,167,647	$	4,364,128	$	2,977,108
Canada		51,702		46,247		118,427		109,694
Total net sales	$	1,934,951	$	1,213,894	$	4,482,555	$	3,086,802

	June 30,		September 30,		June 30,
	2018		2017		2017
Long-lived assets
U.S.	$	1,455,771	$	507,236	$	515,170
Canada		12,403		13,446		13,204
Total long-lived assets	$	1,468,174	$	520,682	$	528,374

11. Fair Value Measurement

As of June 30, 2018, the carrying amount of cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents at amortized cost, which approximates fair value based upon quoted market prices (Level 1).

As of June 30, 2018, based upon recent trading prices (Level 2 — market approach), the fair value of the Company’s $300.0 million Senior Notes due in 2023 was $311.0 million and the fair value of the $1.30 billion Senior Notes due 2025 was $1.20 billion.

As of June 30, 2018, the fair value of the Company’s term loan and revolving asset-based line of credit approximated the amount outstanding. The Company estimates the fair value of its Senior Secured Credit Facility by discounting the future cash flows of each instrument using estimated market rates of debt instruments with similar maturities and credit profiles (Level 3).

20

12. Income Taxes

On December 22, 2017, the U.S. federal government officially signed into law the Tax Cut and Jobs Act of 2017 (“TCJA”). ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions is for tax years beginning after December 31, 2017, or in the case of certain other provisions, January 1, 2018. Though certain key aspects of the new law are effective January 1, 2018 and have an immediate accounting effect, other significant provisions are not effective or may not result in accounting effects for September 30 fiscal year-end companies until October 1, 2018.

Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. Per SAB 118, the measurement period is deemed to have an earlier end date when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the updated tax law are expected to be recorded at the time a reasonable estimate for all, or a portion, of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.

SAB 118 states, that at each reporting period, companies must disclose the effects of the TCJA for areas where accounting is complete, disclose provisional amounts (or adjustments to provisional amounts) for the effects of the TCJA areas where accounting is not complete but a reasonable estimate has been determined, and confirm areas where a reasonable estimate of the effects cannot yet be made, and therefore taxes are reflected in accordance with law prior to the enactment of the TCJA.

As of June 30, 2018, the Company was able to make the following reasonable estimates on the impact of the corporate taxation changes from the TCJA:

• The Company has a blended federal corporate income tax rate for fiscal year 2018 of 24.5%. This transitional tax rate stems from Section 15 of the Internal Revenue Code that states if the tax rate changes in during a tax year, the tax rate for the full year is calculated using the prior and revised tax rates on a proportional basis using the number of days under each legislated rate. For 2019, the Company will have a federal corporate income tax rate of 21%.

• The Company initially remeasured all its deferred tax assets and liabilities based on the revised corporate income tax rate (21%). Due to the Company’s status as a non-calendar year-end filer, it was required to perform additional analysis to distinguish those deferred taxes that will be realized during fiscal year 2018 at the blended federal corporate income tax rate of 24.5% from those that will be realized in future years at the revised rate.  As a result, the Company recognized a provisional decrease of its deferred tax liabilities and related income tax benefit of $1.2 million and $50.1 million in its consolidated statement of operations for the three and nine months ended June 30, 2018, respectively. The Company will continue to refine its deferred tax remeasurement calculation and assess the related impact, which potentially could result in additional adjustments.

• The Company estimated the impact of the mandatory repatriation transition tax on the net accumulated earnings and profits of the Company’s foreign subsidiary, Beacon Roofing Supply Canada Company (“BRSCC”). As a result, the Company recognized a provisional expense of $0.9 million for the one-time transition tax liability in its consolidated statement of operations during the first quarter of fiscal year 2018. The Company has not yet finalized its calculation of the repatriation transition tax, as it continues to analyze of the amount of BRSCC earnings held in cash and other specified assets that had been previously deferred from U.S. federal taxation.

State conformity to the TCJA law changes has not been communicated by the state and local jurisdictions at this time; therefore, the Company has not made any provisional adjustments related to the potential impact in its financial statements. The Company will continue to account for items where a reasonable estimate of the impact could not be assessed as of June 30, 2018 under the guidance that was in effect immediately prior to the enactment of the TCJA, ASC 740, Accounting for Income Taxes.  

13. Supplemental Guarantor Information

The 2023 Senior Notes and 2025 Senior Notes are guaranteed jointly and severally by all of the United States subsidiaries of the Company (collectively, the “Guarantors”), and not by the Canadian subsidiaries of the Company. Such guarantees are full and unconditional. Supplemental condensed consolidating financial information of the Company, including such information for the Guarantors, is presented below. The information is presented in accordance with the requirements of Rule 3-10 under the SEC’s Regulation S-X. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the non-guarantor subsidiaries operated as independent entities. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the consolidating financial information contained herein provides a

21

more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups.

22

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	June 30, 2018
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	50,563	$	3,698	$	(26,710	)	$	27,551
Accounts receivable, net		-		1,046,751		32,277		(1,140	)		1,077,888
Inventories, net		-		1,132,228		33,161		-			1,165,389
Prepaid expenses and other current assets		44,662		286,478		6,449		-			337,589
Total current assets		44,662		2,516,020		75,585		(27,850	)		2,608,417
Intercompany receivable, net		-		1,290,785		-		(1,290,785	)		-
Investments in consolidated subsidiaries		5,981,419		-		-		(5,981,419	)		-
Deferred income taxes, net		19,702		-		-		(19,702	)		-
Property and equipment, net		14,046		264,610		10,052		-			288,708
Goodwill		-		2,291,635		29,545		-			2,321,180
Intangibles, net		-		1,368,653		2,352		-			1,371,005
Other assets, net		1,242		269		-		-			1,511
Total Assets	$	6,061,071	$	7,731,972	$	117,534	$	(7,319,756	)	$	6,590,821
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	42,884	$	688,336	$	16,316	$	(27,850	)	$	719,686
Accrued expenses		24,416		490,987		5,549		-			520,952
Current portions of long-term debt		9,700		10,014		-		-			19,714
Total current liabilities		77,000		1,189,337		21,865		(27,850	)		1,260,352
Intercompany payable, net		1,251,503		-		39,282		(1,290,785	)		-
Borrowings under revolving lines of credit, net		-		471,857		10,632		-			482,489
Long-term debt, net		2,494,308		-		-		-			2,494,308
Deferred income taxes, net		-		113,454		176		(19,702	)		93,928
Long-term obligations under equipment financing and other, net		-		15,979		-		-			15,979
Other long-term liabilities		814		5,428		77		-			6,319
Total liabilities		3,823,625		1,796,055		72,032		(1,338,337	)		4,353,375
Convertible preferred stock		399,195		-		-		-			399,195
Total stockholders' equity		1,838,251		5,935,917		45,502		(5,981,419	)		1,838,251
Total Liabilities and Stockholders' Equity	$	6,061,071	$	7,731,972	$	117,534	$	(7,319,756	)	$	6,590,821

23

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	September 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	149,799	$	1,582	$	(13,131	)	$	138,250
Accounts receivable, net		-		663,034		42,633		(1,140	)		704,527
Inventories, net		-		527,226		24,698		-			551,924
Prepaid expenses and other current assets		4,195		198,817		6,126		-			209,138
Total current assets		4,195		1,538,876		75,039		(14,271	)		1,603,839
Intercompany receivable, net		-		655,372		-		(655,372	)		-
Investments in consolidated subsidiaries		3,160,273		-		-		(3,160,273	)		-
Deferred income taxes, net		30,822		-		-		(30,822	)		-
Property and equipment, net		6,610		138,955		10,564		-			156,129
Goodwill		-		1,220,812		31,174		-			1,251,986
Intangibles, net		-		426,187		2,882		-			429,069
Other assets, net		2,912		5,622		-		-			8,534
Total Assets	$	3,204,812	$	3,985,824	$	119,659	$	(3,860,738	)	$	3,449,557
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	27,174	$	468,891	$	21,903	$	(14,271	)	$	503,697
Accrued expenses		51,183		204,173		5,941		-			261,297
Current portions of long-term obligations		4,500		9,641		-		-			14,141
Total current liabilities		82,857		682,705		27,844		(14,271	)		779,135
Intercompany payable, net		618,881		-		36,491		(655,372	)		-
Borrowings under revolving lines of credit, net		-		-		3,205		-			3,205
Long-term debt, net		721,268		-		-		-			721,268
Deferred income taxes, net		-		168,209		996		(30,822	)		138,383
Long-term obligations under equipment financing and other, net		-		23,147		66		-			23,213
Other long-term liabilities				2,547		-		-			2,547
Total liabilities		1,423,006		876,608		68,602		(700,465	)		1,667,751
Total stockholders' equity		1,781,806		3,109,216		51,057		(3,160,273	)		1,781,806
Total Liabilities and Stockholders' Equity	$	3,204,812	$	3,985,824	$	119,659	$	(3,860,738	)	$	3,449,557

24

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	June 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	34,583	$	7,314	$	(8,842	)	$	33,055
Accounts receivable, net		1,327		640,796		29,994		(1,140	)		670,977
Inventories, net		-		608,367		33,058		-			641,425
Prepaid expenses and other current assets		30,158		185,633		5,686		-			221,477
Total current assets		31,485		1,469,379		76,052		(9,982	)		1,566,934
Intercompany receivable, net		-		1,037,846		-		(1,037,846	)		-
Investments in consolidated subsidiaries		3,070,328		-		-		(3,070,328	)		-
Deferred income taxes, net		58,230		-		-		(58,230	)		-
Property and equipment, net		6,541		140,126		10,284		-			156,951
Goodwill		-		1,226,034		29,980		-			1,256,014
Intangibles, net		-		440,042		2,920		-			442,962
Other assets, net		1,242		269		-		-			1,511
Total Assets	$	3,167,826	$	4,313,696	$	119,236	$	(4,176,386	)	$	3,424,372
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	23,839	$	354,696	$	19,026	$	(9,982	)	$	387,579
Accrued expenses		18,174		257,387		4,754		-			280,315
Current portions of long-term obligations		4,500		9,262		-		-			13,762
Total current liabilities		46,513		621,345		23,780		(9,982	)		681,656
Intercompany payable, net		998,740		-		39,106		(1,037,846	)		-
Borrowings under revolving lines of credit		-		437,285		12,330		-			449,615
Long-term debt, net		721,685		-		-		-			721,685
Deferred income taxes, net		-		199,746		600		(58,230	)		142,116
Long-term obligations under equipment financing and other, net		-		25,978		47		-			26,025
Other long-term liabilities		-		2,387		-		-			2,387
Total liabilities		1,766,938		1,286,741		75,863		(1,106,058	)		2,023,484
Total stockholders' equity		1,400,888		3,026,955		43,373		(3,070,328	)		1,400,888
Total Liabilities and Stockholders' Equity	$	3,167,826	$	4,313,696	$	119,236	$	(4,176,386	)	$	3,424,372

25

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Operations

(Unaudited; In thousands)

	Three Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net sales	$	-		$	1,883,249	$	51,702	$	-		$	1,934,951
Cost of products sold		-			1,401,045		40,012		-			1,441,057
Gross profit		-			482,204		11,690		-			493,894
Operating expense:
Selling, general and administrative		1,776			313,034		8,384		-			323,194
Depreciation		411			14,967		433		-			15,811
Amortization		-			49,947		129		-			50,076
Total operating expense		2,187			377,948		8,946		-			389,081
Intercompany charges (income)		(7,521	)		7,521		-		-			-
Income (loss) from operations		5,334			96,735		2,744		-			104,813
Interest expense, financing costs, and other		33,416			3,594		338		-			37,348
Intercompany interest expense (income)		(6,809	)		6,427		382		-			-
Income (loss) before provision for income taxes		(21,273	)		86,714		2,024		-			67,465
Provision for (benefit from) income taxes		(6,848	)		24,356		582		-			18,090
Income (loss) before equity in net income of subsidiaries		(14,425	)		62,358		1,442		-			49,375
Equity in net income of subsidiaries		63,800			-		-		(63,800	)		-
Net income (loss)	$	49,375		$	62,358	$	1,442	$	(63,800	)	$	49,375

	Three Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net sales	$	-		$	1,167,647	$	46,247	$	-		$	1,213,894
Cost of products sold		-			880,325		35,815		-			916,140
Gross profit		-			287,322		10,432		-			297,754
Operating expense:
Selling, general and administrative		72			176,094		7,434		-			183,600
Depreciation		335			7,823		421		-			8,579
Amortization		-			20,561		143		-			20,704
Total operating expense		407			204,478		7,998		-			212,883
Intercompany charges (income)		(12,549	)		11,987		562		-			-
Income (loss) from operations		12,142			70,857		1,872		-			84,871
Interest expense, financing costs, and other		9,610			3,586		201		-			13,397
Intercompany interest expense (income)		(6,724	)		6,724		-		-			-
Income (loss) before provision for income taxes		9,256			60,547		1,671		-			71,474
Provision for (benefit from) income taxes		3,473			22,883		459		-			26,815
Income (loss) before equity in net income of subsidiaries		5,783			37,664		1,212		-			44,659
Equity in net income of subsidiaries		38,876			-		-		(38,876	)		-
Net income (loss)	$	44,659		$	37,664	$	1,212	$	(38,876	)	$	44,659

26

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Operations

(Unaudited; In thousands)

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net sales	$	-		$	4,364,128		$	118,427		$	-		$	4,482,555
Cost of products sold		-			3,288,086			92,445			-			3,380,531
Gross profit		-			1,076,042			25,982			-			1,102,024
Operating expense:
Selling, general and administrative		4,315			828,987			25,232			-			858,534
Depreciation		1,310			39,015			1,315			-			41,640
Amortization		-			104,946			393			-			105,339
Total operating expense		5,625			972,948			26,940			-			1,005,513
Intercompany charges (income)		(8,105	)		8,105			-			-			-
Income (loss) from operations		2,480			94,989			(958	)		-			96,511
Interest expense, financing costs, and other		90,712			8,226			548			-			99,486
Intercompany interest expense (income)		(17,698	)		16,552			1,146			-			-
Income (loss) before provision for income taxes		(70,534	)		70,211			(2,652	)		-			(2,975	)
Provision for (benefit from) income taxes		(11,796	)		(40,891	)		(604	)		-			(53,291	)
Income (loss) before equity in net income of subsidiaries		(58,738	)		111,102			(2,048	)		-			50,316
Equity in net income of subsidiaries		109,054			-			-			(109,054	)		-
Net income (loss)	$	50,316		$	111,102		$	(2,048	)	$	(109,054	)	$	50,316

	Nine Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net sales	$	-		$	2,977,108	$	109,694		$	-		$	3,086,802
Cost of products sold		-			2,248,454		85,050			-			2,333,504
Gross profit		-			728,654		24,644			-			753,298
Operating expense:
Selling, general and administrative		15,006			501,503		21,779			-			538,288
Depreciation		1,057			22,812		1,253			-			25,122
Amortization		-			60,684		432			-			61,116
Total operating expense		16,063			584,999		23,464			-			624,526
Intercompany charges (income)		(37,057	)		35,379		1,678			-			-
Income (loss) from operations		20,994			108,276		(498	)		-			128,772
Interest expense, financing costs, and other		28,947			9,044		1,248			-			39,239
Intercompany interest expense (income)		(17,406	)		17,406		-			-			-
Income (loss) before provision for income taxes		9,453			81,826		(1,746	)		-			89,533
Provision for (benefit from) income taxes		3,063			31,217		(480	)		-			33,800
Income (loss) before equity in net income of subsidiaries		6,390			50,609		(1,266	)		-			55,733
Equity in net income of subsidiaries		49,343			-		-			(49,343	)		-
Net income (loss)	$	55,733		$	50,609	$	(1,266	)	$	(49,343	)	$	55,733

27

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Comprehensive Income

(Unaudited; In thousands)

	Three Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	49,375		$	62,358	$	1,442		$	(63,800	)	$	49,375
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,535	)		-		(1,535	)		1,535			(1,535	)
Total other comprehensive income (loss)		(1,535	)		-		(1,535	)		1,535			(1,535	)
Comprehensive income (loss)	$	47,840		$	62,358	$	(93	)	$	(62,265	)	$	47,840

	Three Months Ended June 30, 2017
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net income (loss)	$	44,659	$	37,664	$	1,212	$	(38,876	)	$	44,659
Other comprehensive income (loss):
Foreign currency translation adjustment		1,730		-		1,730		(1,730	)		1,730
Total other comprehensive income (loss)		1,730		-		1,730		(1,730	)		1,730
Comprehensive income (loss)	$	46,389	$	37,664	$	2,942	$	(40,606	)	$	46,389

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	50,316		$	111,102	$	(2,048	)	$	(109,054	)	$	50,316
Other comprehensive income (loss):
Foreign currency translation adjustment		(3,506	)		-		(3,506	)		3,506			(3,506	)
Total other comprehensive income (loss)		(3,506	)		-		(3,506	)		3,506			(3,506	)
Comprehensive income (loss)	$	46,810		$	111,102	$	(5,554	)	$	(105,548	)	$	46,810

	Nine Months Ended June 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	55,733	$	50,609	$	(1,266	)	$	(49,343	)	$	55,733
Other comprehensive income (loss):
Foreign currency translation adjustment		891		-		891			(891	)		891
Total other comprehensive income (loss)		891		-		891			(891	)		891
Comprehensive income (loss)	$	56,624	$	50,609	$	(375	)	$	(50,234	)	$	56,624

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BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Cash Flows

(Unaudited; In thousands)

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net cash provided by (used in) operating activities	$	(68,803	)	$	93,178		$	(8,308	)	$	(17,086	)	$	(1,019	)
Investing Activities
Purchases of property and equipment		(8,721	)		(24,901	)		(1,356	)		-			(34,978	)
Acquisition of businesses, net		(2,715,429	)		-			-			-			(2,715,429	)
Proceeds from the sale of assets		-			724			26			-			750
Intercompany activity		628,948			-			-			(628,948	)		-
Net cash provided by (used in) investing activities		(2,095,202	)		(24,177	)		(1,330	)		(628,948	)		(2,749,657	)
Financing Activities
Borrowings under revolving lines of credit		-			2,082,972			39,977			-			2,122,949
Repayments under revolving lines of credit		-			(1,599,839	)		(32,139	)		-			(1,631,978	)
Borrowings under term loan		970,000			-			-			-			970,000
Repayments under term loan		(443,425	)		-			-			-			(443,425	)
Repayments under equipment financing facilities and other		-			(8,604	)		-			-			(8,604	)
Borrowings under senior notes		1,300,000			-			-			-			1,300,000
Payment of debt issuance costs		(58,266	)		(7,522	)		-			-			(65,788	)
Proceeds from issuance of convertible preferred stock		400,000			-			-			-			400,000
Payment of stock issuance costs		(1,279	)		-			-			-			(1,279	)
Payment of dividends on preferred stock		(6,000	)		-			-			-			(6,000	)
Proceeds from issuance of common stock related to equity awards		6,950			-			-			-			6,950
Taxes paid related to net share settlement of equity awards		(3,975	)		-			-			-			(3,975	)
Intercompany activity		-			(635,244	)		2,789			632,455			-
Net cash provided by (used in) financing activities		2,164,005			(168,237	)		10,627			632,455			2,638,850
Effect of exchange rate changes on cash and cash equivalents		-			-			1,127			-			1,127
Net increase (decrease) in cash and cash equivalents		-			(99,236	)		2,116			(13,579	)		(110,699	)
Cash and cash equivalents, beginning of period		-			149,799			1,582			(13,131	)		138,250
Cash and cash equivalents, end of period	$	-		$	50,563		$	3,698		$	(26,710	)	$	27,551

29

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Cash Flows

(Unaudited; In thousands)

	Nine Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net cash provided by (used in) operating activities	$	(33,267	)	$	108,649		$	(2,064	)	$	855		$	74,173
Investing Activities
Purchases of property and equipment		(2,972	)		(27,522	)		(1,388	)		-			(31,882	)
Acquisition of businesses		(128,533	)		-			-			-			(128,533	)
Proceeds from the sale of assets		-			1,828			11			-			1,839
Intercompany activity		159,325			-			-			(159,325	)		-
Net cash provided by (used in) investing activities		27,820			(25,694	)		(1,377	)		(159,325	)		(158,576	)
Financing Activities
Borrowings under revolving lines of credit		-			1,705,434			16,493			-			1,721,927
Repayments under revolving lines of credit		-			(1,624,574	)		(8,996	)		-			(1,633,570	)
Repayments under term loan		(3,375	)		-			-			-			(3,375	)
Repayments under equipment financing facilities and other		-			(7,780	)		-			-			(7,780	)
Proceeds from issuance of common stock		9,994			-			-			-			9,994
Taxes paid related to net share settlement of equity awards		(1,172	)		-			-			-			(1,172	)
Intercompany activity		-			(158,899	)		334			158,565			-
Net cash provided by (used in) financing activities		5,447			(85,819	)		7,831			158,565			86,024
Effect of exchange rate changes on cash and cash equivalents		-			-			48			-			48
Net increase (decrease) in cash and cash equivalents		-			(2,864	)		4,438			95			1,669
Cash and cash equivalents, beginning of period		-			37,447			2,876			(8,937	)		31,386
Cash and cash equivalents, end of period	$	-		$	34,583		$	7,314		$	(8,842	)	$	33,055

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14. Subsequent Events

On July 16, 2018, the Company acquired Atlas Supply, Inc., the Pacific Northwest’s leading distributor of sealants, coatings, adhesives and related waterproofing products, with six branches operating in Seattle, Tacoma, Spokane, and Mountlake Terrace in Washington, as well as locations in Portland, Oregon and Boise, Idaho, and annual sales of approximately $37 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with Management’s Discussion and Analysis included in our 2017 Annual Report on Form 10-K and our Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this document. Unless otherwise indicated, references to “2018” refer to the three and nine months ended June 30, 2018being discussed and references to “2017” refer to the three and nine months ended June 30, 2017being discussed. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

Overview

We are the 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, waterproofing systems, wallboard and acoustical ceiling tiles. We are among the oldest and most established distributors in the industry. We purchase products from a large number of manufacturers and then distribute these goods to a customer base consisting of contractors and, to a lesser extent, general contractors, retailers, and building materials suppliers.

As of June 30, 2018, we operated556 branches in50 states throughout the United States and 6 provinces in Canada. We stock one of the most extensive assortments of high quality branded products in the industry, with approximately 70,000 SKUs available across our branch network, enabling us to deliver products to serve over 100,000 customers on a timely basis.

On January 2, 2018, we finalized acquisition of Allied Building Products Corp., a New Jersey corporation, and an affiliated entity (together “Allied”) for $2.625 billion, subject to certain working capital and other adjustments. Allied is one of the country’s largest exterior and interior building products distributors and is headquartered in East Rutherford, New Jersey. Allied distributes products in 208 locations across 31 states in the U.S. and has a strong presence in New York, New Jersey, Florida, California, Hawaii and the upper Midwest. We believe the acquisition of Allied was a strategically and financially compelling transaction that expanded our geographic footprint, enhanced our scale and market position, diversified our product offerings, and will provide new growth opportunities and increase our long-term profitability.

Effective execution of both the sales and operating plans enables us to grow beyond the relative strength of the markets we serve. Our business model is a bottom-up approach, where each of our branches uses its regional knowledge and experience to assist with the development of a marketing plan and stocking a product mix that is best suited for its respective market. Local alignment with overall strategic goals provides the foundation for significant ownership of results at the branch level.

Our distinctive operational model combined with significant branch level autonomy differentiates us from the competition. We provide our customers with value-added services, including, but not limited to, job site delivery, custom designed tapered roofing systems, metal fabrication, and trade credit. We consider customer relations and our employees’ knowledge of roofing and building materials to be vital to our ability to increase customer loyalty and maintain customer satisfaction. Our customers’ business success can be enhanced when they are supported by our efficient and effective distribution network. We invest significant resources in professional development, management skills, product knowledge and operational proficiency. We pride ourselves on providing these capabilities developed on a foundation of continuous improvement driving service excellence, productivity and efficiencies.

We seek opportunities to expand our business operations through both acquisitions and organic growth (opening branches, growing sales with existing customers, adding new customers and introducing new products). Our main acquisition strategy is to target market leaders that do business in geographic areas that we currently do not service or that complement our existing regional operations. In addition to our acquisition of Allied, our recent success in delivering on our growth strategy is highlighted by the following:

• On December 16, 2016, we purchased certain assets of BJ Supply Company, a distributor of roofing and related building products with 1 branch serving Pennsylvania and New Jersey and annual sales of approximately $4 million.

• On January 3, 2017, we acquired American Building & Roofing, Inc., a distributor of mainly residential roofing and related building products with 7 branches around Washington State and annual sales of approximately $36 million.

• On January 9, 2017, we acquired Eco Insulation Supply, a distributor of insulation and related accessories with 1 branch serving Connecticut, Southern New England and the New York City metropolitan area and annual sales of approximately $8 million.

• On March 1, 2017, we acquired Acme Building Materials, Inc., a distributor of residential roofing and related building products with 3 branches in Eastern Michigan and annual sales of approximately $13 million.

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• On May 1, 2017, we purchased certain assets of Lowry’s Inc., a distributor of waterproofing and concrete restoration materials with 11 branches operating in California, Arizona, Utah and Hawaii and annual sales of approximately $76 million.

• On May 1, 2018, we acquired Tri-State Builder’s Supply, a wholesale supplier of roofing, siding, windows, doors and related building products with 1 branch located in Duluth, Minnesota and annual sales of approximately $6 million.

• On July 16, 2018, we acquired Atlas Supply, Inc., the Pacific Northwest’s leading distributor of sealants, coatings, adhesives and related waterproofing products, with 6 branches operating in Seattle, Tacoma, and Mountlake Terrace in Washington, as well as locations in Portland, Oregon and Boise, Idaho, and annual sales of approximately $37 million.

In addition, we opened three new branch in fiscal year 2018 and four new branches in fiscal year 2017. These new branch locations allow us to penetrate deeper into our existing markets and establish a greater presence. Although new greenfield locations impact our operating cost structure slightly in the near-term, we believe they are strategically located within markets that possess strong dynamics, thereby presenting us with an opportunity to quickly establish our presence and gain local market share.  

Results of Operations

Comparison of the Three Months Ended June 30, 2018 and 2017

The following tables set forth consolidated statement of operations data and such data as a percentage of total net sales for the periods presented (in thousands):

	Three Months Ended June 30,
	2018		2017
Net sales	$	1,934,951	$	1,213,894
Cost of products sold		1,441,057		916,140
Gross profit		493,894		297,754
Operating expense:
Selling, general and administrative		323,194		183,600
Depreciation		15,811		8,579
Amortization		50,076		20,704
Total operating expense		389,081		212,883
Income (loss) from operations		104,813		84,871
Interest expense, financing costs, and other		37,348		13,397
Income (loss) before provision for income taxes		67,465		71,474
Provision for (benefit from) income taxes		18,090		26,815
Net income (loss)	$	49,375	$	44,659
Dividends on preferred shares		6,000		-
Net income (loss) attributable to common shareholders	$	43,375	$	44,659

	Three Months Ended June 30,
	2018			2017
Net sales		100.0	%		100.0	%
Cost of products sold		74.5	%		75.5	%
Gross profit		25.5	%		24.5	%
Operating expense:
Selling, general and administrative		16.7	%		15.1	%
Depreciation		0.8	%		0.7	%
Amortization		2.6	%		1.7	%
Total operating expense		20.1	%		17.5	%
Income (loss) from operations		5.4	%		7.0	%
Interest expense, financing costs, and other		1.9	%		1.1	%
Income (loss) before provision for income taxes		3.5	%		5.9	%
Provision for (benefit from) income taxes		0.9	%		2.2	%
Net income (loss)		2.6	%		3.7	%
Dividends on preferred shares		0.4	%		0.0	%
Net income (loss) attributable to common shareholders		2.2	%		3.7	%

In managing our business, we consider all growth, including the opening of new branches, to be organic growth unless it results from an acquisition. When we refer to growth in existing markets or organic growth, we include growth from existing and newly

33

opened branches but exclude growth from acquired branches until they have been under our ownership for at least four full fiscal quarters at the start of the fiscal reporting period. We believe the existing market information is useful to investors because it helps explain organic growth or decline. When we refer to regions, we are referring to our geographic regions. When we refer to our net product costs, we are referring to our invoice cost less the impact of short-term buying programs (also referred to as “special buys” given the manner in which they are offered).

As of June 30, 2018, we had a total of 556 branches in operation. Our existing market calculations include 335 branches and exclude 221 branches because they were acquired after the start of the third quarter of fiscal year 2017.

The following table summarizes our results of operations by market type (existing and acquired) for the periods presented (in thousands):

	Existing Markets						Acquired Markets						Consolidated
	Three Months Ended June 30,
	2018			2017			2018			2017			2018			2017
Net sales	$	1,123,839		$	1,102,317		$	811,112		$	111,577		$	1,934,951		$	1,213,894
Gross profit	$	277,128		$	267,900		$	216,766		$	29,854		$	493,894		$	297,754
Gross margin		24.7	%		24.3	%		26.7	%		26.8	%		25.5	%		24.5	%
Operating expense (1)	$	202,139		$	191,348		$	186,942		$	21,535		$	389,081		$	212,883
Operating expense as a % of net sales		18.0	%		17.4	%		23.0	%		19.3	%		20.1	%		17.5	%
Operating income (loss)	$	74,989		$	76,551		$	29,824		$	8,320		$	104,813		$	84,871
Operating margin		6.7	%		6.9	%		3.7	%		7.5	%		5.4	%		7.0	%

 ___________________________________

¹ During 2018 and 2017, we recorded amortization expense related to intangible assets recorded under purchase accounting of $50.1 million ($35.7 million from acquired markets) and $20.7 million ($3.5 million from acquired markets), respectively. In addition, total operating expense for 2018 and 2017 included non-recurring charges of $10.0 million (none from acquired markets) and $2.0 million (none from acquired markets), respectively, for the recognition of costs related to acquisitions.

Net Sales

Consolidated net sales increased $721.1 million, or 59.4%, to $1.93 billion in 2018, up from $1.21 billion in 2017. Existing market sales increased $21.5 million, or 2.0%, over the same comparative period. We believe the increase in our 2018 existing market sales was influenced primarily by the following factors:

• higher pricing across all product lines;

• high demand in Florida related to hurricane Irma; and

• strong growth in Northern markets following harsh winter weather in the region;

partially offset by:  

• below-average hail demand and decreased storm activity in the western markets compared to the prior year.

Existing markets net sales by geographical region increased (decreased) from 2017 to 2018 as follows: Northeast 15.0%; Mid-Atlantic 10.0%; Southeast 9.6%; Southwest (6.3%); Midwest (14.0%); West (4.4%); and Canada 11.8%. Net sales within our acquired markets were $811.1 million in 2018, an increase from 2017 due to the impact from recent acquisitions.

We estimate the impact of inflation or deflation on our sales and gross profit by looking at changes in our average selling prices and gross margins (discussed below). Average overall selling prices in existing markets were up approximately 5% in 2018 compared to 2017, driven primarily by price increases across all product lines.

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Product line sales for our existing markets were as follows (in thousands):

	Three Months Ended June 30,
	2018					2017					Change
	Net Sales		%			Net Sales		%			$			%
Residential roofing products	$	589,507		52.5	%	$	607,341		55.1	%	$	(17,834	)		(2.9	%)
Non-residential roofing products		346,410		30.8	%		317,880		28.8	%		28,530			9.0	%
Complementary building products		187,922		16.7	%		177,096		16.1	%		10,826			6.1	%
Total existing market sales	$	1,123,839		100.0	%	$	1,102,317		100.0	%	$	21,522			2.0	%

For 2018, our acquired markets recognized sales of $235.0 million, $137.1 million and $439.0 million in residential roofing products, non-residential roofing products and complementary building products, respectively. The combination of our 2018 existing market sales of $1.12 billion plus the sales from acquired markets of $811.1 million equals our total 2018 sales of $1.93 billion. We believe the existing market information is useful to investors because it helps explain organic growth or decline.

Gross Profit

Gross profit and gross margin for our consolidated and existing markets were as follows (in thousands):

	Three Months Ended June 30,						Change1
	2018			2017			$		%
Gross profit - consolidated	$	493,894		$	297,754		$	196,140		65.9	%
Gross profit - existing markets		277,128			267,900			9,228		3.4	%
Gross margin - consolidated		25.5	%		24.5	%	N/A			1.0	%
Gross margin - existing markets		24.7	%		24.3	%	N/A			0.4	%

 ________________________________

¹ Percentage changes for dollar amounts represent the ratable increase or decrease from period-to-period. Percentage changes for percentages represent the net period-to-period change in basis points

Our consolidated gross profit increased $196.1 million, or 65.9%, to $493.9 million in 2018. Existing market gross profit increased $9.2 million,or 3.4%, over the same comparative period and gross profit within our acquired markets was $216.8 million. Consolidated gross margins were 25.5% in 2018, a 1.0% increase from the prior year, and existing market gross margins increased 0.4% over the comparative periods, to 24.7%.

The increase in existing market gross margin was primarily driven by a price increase of approximately 5%, partially offset by a product cost increase of approximately 4-5% across all products over the comparative period and a shift in mix to product lines with lower gross margins. Consolidated gross margin was slightly higher than existing market gross margin, primarily due to the positive impact of recent acquisitions.

Consolidated direct sales (products shipped by our vendors directly to our customers), which typically have substantially lower gross margins (and operating expense) compared to our warehouse sales, represented 12.4% and 14.9% of our net sales in 2018 and 2017, respectively.

Operating Expense

Operating expense for consolidated and existing markets was as follows (in thousands):

	Three Months Ended June 30,						Change1
	2018			2017			$		%
Operating expense - consolidated	$	389,081		$	212,883		$	176,198		82.8	%
Operating expense - existing markets		202,139			191,348			10,791		5.6	%
% of net sales - consolidated		20.1	%		17.5	%	N/A			2.6	%
% of net sales - existing markets		18.0	%		17.4	%	N/A			0.6	%

 ________________________________

¹ Percentage changes for dollar amounts represent the ratable increase or decrease from period-to-period. Percentage changes for percentages represent the net period-to-period change in basis points

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Operating expense in our existing markets increased by $10.8 million, or 5.6% in 2018, to $202.1 million, as compared to $191.3 million in 2017, while operating expense within our acquired markets was $186.9 million in 2018. The following factors were the leading causes of the increase in operating expense in our existing markets:

• an increase in general and administrative expense of $9.7 million due to one-time costs incurred as part of the Allied acquisition; and

• an increase in stock compensation expense of $2.7 million due to a greater number of outstanding awards and higher grant date fair market values for awards granted in fiscal year 2018;

partially offset by:

• a decrease in amortization expense of $2.8 million due to the scheduled declining run-rate of intangible asset amortization related to the RSG acquisition.

During 2018 and 2017, we recorded amortization expense related to the intangible assets recorded under purchase accounting within our existing markets of $14.4 million and $17.2 million, respectively. Our existing markets operating expense as a percentage of the related net sales in 2018 was 18.0%, compared to 17.4% in 2017.

Interest Expense, Financing Costs and Other

Interest expense, financing costs and other expense was $37.3 million in 2018, as compared to $13.4 million in 2017. The primary driver of this increase is the additional interest costs related to the higher average outstanding debt balance over the comparative periods.

Income Taxes

There was an income tax provision of $18.1 million in 2018, as compared to a $26.8 million income tax provision in 2017. This decrease was primarily driven by the reduction of the federal corporate income tax rate from 35% to a blended rate of 24.5% as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (see Note 12 in the Notes to the Condensed Consolidated Financial Statements for further discussion). Consequently, the effective tax rate before discrete items decreased to 29.5% in 2018, compared to 38.8% in 2017. We expect our fiscal year 2018 effective tax rate, excluding any discrete items, will be approximately 29.0-30.0%.

Net Income (Loss)/Net Income (Loss) Per Share

Net income was $49.4 million in 2018, as compared to a net income of $44.7 million in 2017. There were $6.0 million of dividends on preferred shares in 2018 and none in 2017, making net income attributable to common shareholders of $43.4 million in 2018, as compared to net income attributable to common shareholders of $44.7 million in 2017.  We calculate net income (loss) per share by dividing net income (loss), less dividends on preferred shares and adjustments for participating securities, by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by utilizing the most dilutive result after applying and comparing the two-class method and if-converted method (see Note 4 in the Notes to the Condensed Consolidated Financial Statements for further discussion).  

The following table presents the all the components utilized to calculate basic and diluted net income (loss) per share (in thousands, except share and per share amounts):

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	Three Months Ended June 30,
	2018			2017
Net income (loss)	$	49,375		$	44,659
Dividends on preferred shares		(6,000	)		-
Net income (loss) attributable to common shareholders		43,375		$	44,659
Undistributed income allocated to participating securities		(5,406	)		-
Net income (loss) attributable to common shareholders - basic and diluted (if-converted method)	$	37,969		$	44,659
Undistributed income allocated to participating securities		5,406			-
Re-allocation of undistributed income to preferred shares		(5,334	)		-
Net income (loss) attributable to common shareholders - diluted (two-class method)	$	38,041		$	44,659
Weighted-average common shares outstanding - basic		68,086,387			60,311,923
Effect of common share equivalents		1,061,756			1,038,920
Weighted-average common shares outstanding - diluted (if-converted and two-class method)		69,148,143			61,350,843
Net income (loss) per share - basic	$	0.56		$	0.74
Net income (loss) per share - diluted (two-class method)		0.55			0.73
Net income (loss) per share - diluted (if-converted method)		0.55			0.73

Comparison of the Nine Months Ended June 30, 2018 and 2017

The following tables set forth consolidated statement of operations data and such data as a percentage of total net sales for the periods presented (in thousands):  

	Nine Months Ended June 30,
	2018			2017
Net sales	$	4,482,555		$	3,086,802
Cost of products sold		3,380,531			2,333,504
Gross profit		1,102,024			753,298
Operating expense:
Selling, general and administrative		858,534			538,288
Depreciation		41,640			25,122
Amortization		105,339			61,116
Total operating expense		1,005,513			624,526
Income (loss) from operations		96,511			128,772
Interest expense, financing costs, and other		99,486			39,239
Income (loss) before provision for income taxes		(2,975	)		89,533
Provision for (benefit from) income taxes		(53,291	)		33,800
Net income (loss)	$	50,316		$	55,733
Dividends on preferred shares		12,000			-
Net income (loss) attributable to common shareholders	$	38,316		$	55,733

	Nine Months Ended June 30,
	2018			2017
Net sales		100.0	%		100.0	%
Cost of products sold		75.4	%		75.6	%
Gross profit		24.6	%		24.4	%
Operating expense:
Selling, general and administrative		19.2	%		17.4	%
Depreciation		0.9	%		0.8	%
Amortization		2.3	%		2.0	%
Total operating expense		22.4	%		20.2	%
Income (loss) from operations		2.2	%		4.2	%
Interest expense, financing costs, and other		2.2	%		1.3	%
Income (loss) before provision for income taxes		0.0	%		2.9	%
Provision for (benefit from) income taxes		(1.1	%)		1.1	%
Net income (loss)		1.1	%		1.8	%
Dividends on preferred shares		0.2	%		0.0	%
Net income (loss) attributable to common shareholders		0.9	%		1.8	%

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In managing our business, we consider all growth, including the opening of new branches, to be organic growth unless it results from an acquisition. When we refer to growth in existing markets or organic growth, we include growth from existing and newly opened branches but exclude growth from acquired branches until they have been under our ownership for at least four full fiscal quarters at the start of the fiscal reporting period. We believe the existing market information is useful to investors because it helps explain organic growth or decline. When we refer to regions, we are referring to our geographic regions. When we refer to our net product costs, we are referring to our invoice cost less the impact of short-term buying programs (also referred to as “special buys” given the manner in which they are offered).

As of June 30, 2018, we had a total of 556 branches in operation. Our existing market calculations include 325 branches and excluded 231 branches because they were acquired after the start of fiscal year 2017.

The following table summarizes our results of operations by market type (existing and acquired) for the periods presented (in thousands):  

	Existing Markets						Acquired Markets						Consolidated
	Nine Months Ended June 30,
	2018			2017			2018			2017			2018			2017
Net sales	$	2,911,830		$	2,811,814		$	1,570,725		$	274,988		$	4,482,555		$	3,086,802
Gross profit	$	691,628		$	680,381		$	410,396		$	72,917		$	1,102,024		$	753,298
Gross margin		23.8	%		24.2	%		26.1	%		26.5	%		24.6	%		24.4	%
Operating expense (1)	$	609,649		$	560,248		$	395,864		$	64,278		$	1,005,513		$	624,526
Operating expense as a % of net sales		20.9	%		19.9	%		25.2	%		23.4	%		22.4	%		20.2	%
Operating income (loss)	$	81,980		$	120,133		$	14,531		$	8,639		$	96,511		$	128,772
Operating margin		2.8	%		4.3	%		0.9	%		3.1	%		2.2	%		4.2	%

____________________________________

¹ During 2018 and 2017, we recorded amortization expense related to intangible assets recorded under purchase accounting of $105.4 million ($63.5 million from acquired markets) and $61.1 million ($10.7 million from acquired markets), respectively. In addition, total operating expense for 2018 and 2017 included non-recurring charges of $43.8 million ($0.1 million from acquired markets) and $4.7 million (none from acquired markets), respectively, for the recognition of costs related to acquisitions.

Net Sales

Consolidated net sales increased $1.40 billion, or 45.2%, to $4.48 billion in 2018, up from $3.09 billion in 2017. Existing market sales increased $100.0 million, or 3.6%, over the same comparative period. We believe the increase in our 2018 existing market sales was influenced primarily by the following factors:

• higher pricing across all product lines;

• high demand in Florida and Texas following Hurricanes Irma and Harvey; and

• increased sales volume within non-residential roofing and complementary product lines;

partially offset by:  

• below-average hail demand and decreased storm activity in the western markets compared to the prior year.

Existing markets net sales by geographical region increased (decreased) from 2017 to 2018 as follows: Northeast 7.2%; Mid-Atlantic 1.0%; Southeast 15.6%; Southwest (2.6%); Midwest (7.6%); West 12.0%; and Canada 8.0%. Net sales within our acquired markets were $1.57 billion in 2018, an increase from 2017 due to the impact from recent acquisitions.

We estimate the impact of inflation or deflation on our sales and gross profit by looking at changes in our average selling prices and gross margins (discussed below). Average overall selling prices in existing markets were up over 2% in 2018 compared to 2017, driven primarily by price increases across all product lines and highlighted by an increase in complementary product pricing of approximately 5%.

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Product line sales for our existing markets were as follows (in thousands):

	Nine Months Ended June 30,
	2018					2017					Change
	Net Sales		%			Net Sales		%			$		%
Residential roofing products	$	1,540,356		52.9	%	$	1,527,375		54.3	%	$	12,981		0.8	%
Non-residential roofing products		879,558		30.2	%		836,279		29.7	%		43,279		5.2	%
Complementary building products		491,916		16.9	%		448,160		16.0	%		43,756		9.8	%
Total existing market sales	$	2,911,830		100.0	%	$	2,811,814		100.0	%	$	100,016		3.6	%

For 2018, our acquired markets recognized sales of $454.8 million, $265.5 million and $850.4 million in residential roofing products, non-residential roofing products and complementary building products, respectively. The combination of our 2018 existing market sales of $2.91 billion plus the sales from acquired markets of $1.57 billion equals our total 2018 sales of $4.48 billion. We believe the existing market information is useful to investors because it helps explain organic growth or decline.

Gross Profit

Gross profit and gross margin for our consolidated and existing markets were as follows (in thousands):

	Nine Months Ended June 30,						Change1
	2018			2017			$		%
Gross profit - consolidated	$	1,102,024		$	753,298		$	348,726		46.3	%
Gross profit - existing markets		691,628			680,381			11,247		1.7	%
Gross margin - consolidated		24.6	%		24.4	%	N/A			0.2	%
Gross margin - existing markets		23.8	%		24.2	%	N/A			(0.4	%)

 _________________________________

¹ Percentage changes for dollar amounts represent the ratable increase or decrease from period-to-period. Percentage changes for percentages represent the net period-to-period change in basis points.

Our consolidated gross profit increased $348.7 million, or 46.3%, to $1.10 billion in 2018. Existing market gross profit increased $11.2 million,or 1.7%, over the same comparative period and gross profit within our acquired markets was $410.4 million. Consolidated gross margins were 24.6% in 2018, a 0.2% increase from the prior year, and existing market gross margins decreased 0.4% over the comparative periods, to 23.8%.

The decrease in existing market gross margin was primarily driven by a product cost increase of approximately 3%, partially offset by a price increase slightly less than 3% across all products over the comparative period. Consolidated gross margin was slightly higher than existing market gross margin, primarily due to the positive impact of recent acquisitions.

Consolidated direct sales (products shipped by our vendors directly to our customers), which typically have substantially lower gross margins (and operating expense) compared to our warehouse sales, represented 13.2% and 15.5% of our net sales in 2018 and 2017, respectively.

Operating Expense

Operating expense for consolidated and existing markets was as follows (in thousands):

	Nine Months Ended June 30,						Change1
	2018			2017			$		%
Operating expense - consolidated	$	1,005,513		$	624,526		$	380,987		61.0	%
Operating expense - existing markets		609,649			560,248			49,401		8.8	%
% of net sales - consolidated		22.4	%		20.2	%	N/A			2.2	%
% of net sales - existing markets		20.9	%		19.9	%	N/A			1.0	%

 ________________________________

¹ Percentage changes for dollar amounts represent the ratable increase or decrease from period-to-period. Percentage changes for percentages represent the net period-to-period change in basis points.

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Operating expense in our existing markets increased by $49.4 million, or 8.8% in 2018, to $609.6 million, as compared to $560.2 million in 2017, while operating expense within our acquired markets was $395.9 million in 2018. The following factors were the leading causes of the increase in operating expense in our existing markets:

• an increase in general and administrative expense of $37.5 million due to related to one-time costs incurred as part of the Allied acquisition;

• an increase in payroll and employee benefit costs of $12.6 million due to higher insurance costs, and higher salaries and wages from annual merit increases as well as additional headcount; and

• an increase in stock compensation expense of $4.4 million due to a greater number of outstanding awards and higher grant date fair market values for awards granted in fiscal year 2018;

partially offset by:

• a decrease in amortization expense of $8.6 million due to the scheduled declining run-rate of intangible asset amortization related to the RSG acquisition.

During 2018 and 2017, we recorded amortization expense related to the intangible assets recorded under purchase accounting within our existing markets of $41.8 million and $50.4 million, respectively. Our existing markets operating expense as a percentage of the related net sales in 2018 was 20.9%, compared to 19.9% in 2017.

Interest Expense, Financing Costs and Other

Interest expense, financing costs and other expense was $99.5 million in 2018, as compared to $39.2 million in 2017. The primary driver of this increase is the additional interest costs related to the higher average outstanding debt balance over the comparative periods.

Income Taxes

There was an income tax benefit of $53.3 million in 2018, as compared to a $33.8 million income tax provision in 2017. The 2018 tax benefit was primarily due to the net $49.1 million beneficial impact recognized in 2018 as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (see Note 12 in the Notes to the Condensed Consolidated Financial Statements for further discussion). The effective tax rate before discrete items decreased to 29.5% in 2018, compared to 38.8% in 2017. This decrease was primarily driven by the reduction of the federal corporate income tax rate from 35% to a blended rate of 24.5%. We expect our fiscal year 2018 effective tax rate, excluding any discrete items, will be approximately 29.0-30.0%.

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Net Income (Loss)/Net Income (Loss) Per Share

Net income was $50.3 million in 2018, as compared to a net income of $55.7 million in 2017. There were $12.0 million of dividends on preferred shares in 2018 and none in 2017, making net income attributable to common shareholders of $38.3 million in 2018, as compared to net income attributable to shareholders of $55.7 million in 2017.  We calculate net income (loss) per share by dividing net income (loss), less dividends on preferred shares and adjustments for participating securities, by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by utilizing the most dilutive result after applying and comparing the two-class method and if-converted method (see Note 4 in the Notes to the Condensed Consolidated Financial Statements for further discussion).  

The following table presents the all the components utilized to determine basic and diluted net income (loss) per share (in thousands, except share and per share amounts):

	Nine Months Ended June 30,
	2018			2017
Net income (loss)	$	50,316		$	55,733
Dividends on preferred shares		(12,000	)		-
Net income (loss) attributable to common shareholders		38,316			55,733
Undistributed income allocated to participating securities		(3,293	)
Net income (loss) attributable to common shareholders - basic and diluted (if-converted method)	$	35,023		$	55,733
Undistributed income allocated to participating securities		3,293			-
Re-allocation of undistributed income to preferred shares		(3,238	)		-
Net income (loss) attributable to common shareholders - diluted (two-class method)	$	35,078		$	55,733
Weighted-average common shares outstanding, basic		67,976,980			60,131,546
Effect of common share equivalents		1,263,060			1,032,045
Weighted-average common shares outstanding - diluted (if-converted and two-class method)		69,240,040			61,163,591
Net income (loss) per share - basic	$	0.52		$	0.93
Net income (loss) per share - diluted (two-class method)		0.51			0.91
Net income (loss) per share - diluted (if-converted method)		0.51			0.91

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 generally accepted accounting principles in the United States (“GAAP”), specifically:

• Adjusted Net Income (Loss)/Adjusted EPS

• Adjusted EBITDA

We define Adjusted Net Income (Loss) as net income that excludes non-recurring acquisition costs, the amortization of intangibles, business restructuring costs, and the non-recurring effects of tax reform. Adjusted net income per share (“Adjusted EPS”) is calculated by dividing the Adjusted Net Income (Loss) for the period by the weighted-average diluted shares outstanding for the period after assuming the full conversion of the participating Preferred Stock.

We define Adjusted EBITDA as net income plus interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, non-recurring acquisition costs, and business restructuring costs. EBITDA is a measure commonly used in the distribution industry.

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

We believe these non-GAAP measures are useful because they allow investors to better understand year-over-year changes in underlying operating performance. We believe that these non-GAAP measures provide investors and analysts with a measure of operating results unaffected by differences in capital structures and capital investment cycles among otherwise comparable companies. Further, we believe these measures are useful to investors because they improve comparability of results of operations since they eliminate the impact of purchase accounting adjustments that can render operating results non-comparable between periods. However, our calculations of these non-GAAP measures may not align with similarly titled measures reported by other companies.  

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Although we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared in accordance with GAAP. You should not consider any of these measures as a substitute alongside other financial performance measures presented in accordance with GAAP.

The following table presents a reconciliation of net income, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Net Income (Loss)/Adjusted EPS for each of the periods indicated (in thousands, except per share amounts):

Adjusted Net Income (Loss)/Adjusted EPS

	Three Months Ended June 30,										Nine Months Ended June 30,
	2018						2017				2018						2017
	Amount			Per Share1			Amount		Per Share1		Amount			Per Share2			Amount		Per Share2
Net income (loss)	$	49,375		$	0.63		$	44,659	$	0.73	$	50,316		$	0.67		$	55,733	$	0.91
Acquisition costs3		45,191			0.57			14,614		0.24		121,429			1.60			42,987		0.70
Effects of tax reform4		(1,166	)		(0.02	)		-		-		(49,149	)		(0.65	)		-		-
Adjusted Net Income (Loss)	$	93,400		$	1.18		$	59,273	$	0.97	$	122,596		$	1.62		$	98,720	$	1.61

¹ Per share amounts are calculated using the diluted weighted-average common stock outstanding totals for each respective period after assuming the full conversion of the participating Preferred Stock. The weighted-average share count utilized in the 2018 calculation of Adjusted EPS is 78,842,762. This amount is the 69,148,143 diluted weighted-average shares outstanding plus the assumed conversion of 9,694,619 weighted-average shares of participating Preferred Stock, which were excluded from the GAAP net income (loss) per share calculation for the period due to their anti-dilutive nature. The weighted-average share count utilized in the 2017 calculation of Adjusted EPS is 61,350,843.

² Per share amounts are calculated using the diluted weighted-average common stock outstanding totals for each respective period after assuming the full conversion of the participating Preferred Stock. The weighted-average share count utilized in the 2018 calculation of Adjusted EPS is 75,632,096. This amount is the 69,240,040 diluted weighted-average shares outstanding plus the assumed conversion of 6,392,056 weighted-average shares of participating Preferred Stock, which were excluded from the GAAP net income (loss) per share calculation for the period due to their anti-dilutive nature. The weighted-average share count utilized in the 2017 calculation of Adjusted EPS is 61,163,591.

³ Acquisition costs for the three months ended June 30, 2018 include $13.5 million of non-recurring charges related to acquisitions and $50.1 million of amortization expense related to intangibles, both net of $18.4 million in tax in total. Acquisition costs for the three months ended June 30, 2017  include $3.1 million of non-recurring charges related to acquisitions and $20.7 million of amortization expense related to intangibles, both net of $9.2 million in tax in total. Acquisition costs for the nine months ended June 30, 2018  include $65.9 million of non-recurring charges related to acquisitions and $105.4 million of amortization expense related to intangibles, both net of $49.9 million in tax in total. Acquisition costs for the nine months ended June 30, 2017  include $9.0 million of non-recurring charges related to acquisitions and $61.1 million of amortization expense related to intangibles, both net of $27.1 million in tax in total.

⁴ Impact of the Tax Cuts and Jobs Act of 2017 – see Note 12 in the Notes to the Condensed Consolidated Financial Statements for further discussion.

The following table presents a reconciliation of net income, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated (in thousands):

Adjusted EBITDA

	Three Months Ended June 30,						Nine Months Ended June 30,
	2018			2017			2018			2017
Net income (loss)	$	49,375		$	44,659		$	50,316		$	55,733
Acquisition costs1		9,957			1,971			43,827			4,715
Interest expense, net		39,055			13,614			104,334			40,098
Income taxes		18,090			26,815			(53,291	)		33,800
Depreciation and amortization		65,887			29,283			146,979			86,238
Stock-based compensation		5,298			3,653			13,133			11,227
Adjusted EBITDA	$	187,662		$	119,995		$	305,298		$	231,811
Adjusted EBITDA as a % of net sales		9.7	%		9.9	%		6.8	%		7.5	%

 ___________________________________

¹ Acquisition costs reflect non-recurring charges related to acquisitions (excluding the impact of tax) that are not embedded in other balances of the table. Certain portions of the total acquisition costs incurred are included in interest expense, income taxes, depreciation and amortization, and stock-based compensation.

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Seasonality and Quarterly Fluctuations

In 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 our branches in the northern and mid-western U.S. and in Canada. We have historically incurred low net income levels or net losses during the second quarter when our sales are substantially lower.

We generally experience an increase in inventory, accounts receivable and accounts payable during the third and fourth quarters of the year as a result of the seasonality of our business. Our peak cash usage generally occurs during the third quarter, primarily because accounts payable terms offered by our suppliers typically have due dates in April, May and June, while our peak accounts receivable collections typically occur from June through November.

We generally experience a slowing of our accounts receivable collections during our second quarter, mainly due to the inability of some of our customers to conduct their businesses effectively in inclement weather in certain divisions. We continue to attempt to collect those receivables, which require payment under our standard terms. We do not provide material concessions to our customers during this quarter of the year.

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.

Certain Quarterly Financial Data

The following table sets forth certain unaudited quarterly data for fiscal year 2018 (ending June 30, 2018) and fiscal year 2017 which, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of this data. Results of any one or more quarters are not necessarily indicative of results for an entire fiscal year or of continuing trends (in thousands, except per share amounts):

	2018							2017
	Qtr 1		Qtr 2			Qtr 3		Qtr 1		Qtr 2			Qtr 3		Qtr 4
Net sales	$	1,121,979	$	1,425,625		$	1,934,951	$	1,002,184	$	870,724		$	1,213,894	$	1,289,868
Gross profit		269,753		338,377			493,894		251,067		204,477			297,754		322,641
Income (loss) from operations		49,096		(57,398	)		104,813		46,957		(3,056	)		84,871		87,324
Net income (loss)		67,596		(66,655	)		49,375		20,430		(9,356	)		44,659		45,131
Dividends on preferred shares		-		6,000			6,000		-		-			-		-
Net income (loss) attributable to common shareholders	$	67,596	$	(72,655	)	$	43,375	$	20,430	$	(9,356	)	$	44,659	$	45,131
Net income (loss) per share - basic	$	1.00	$	(1.07	)	$	0.56	$	0.34	$	(0.16	)	$	0.74	$	0.74
Net income (loss) per share - diluted	$	0.98	$	(1.07	)	$	0.55	$	0.33	$	(0.16	)	$	0.73	$	0.73

Liquidity

Liquidity is defined as the current amount of readily available cash and the ability to generate adequate amounts of cash to meet the current needs for cash. We assess our liquidity in terms of our cash and cash equivalents on hand and the ability to generate cash to fund our operating activities, taking into consideration available borrowings and the seasonal nature of our business.

Our principal sources of liquidity as of June 30, 2018were our cash and cash equivalents of $27.6 million and our available borrowings of $725.3 million under our asset based lending revolving credit facility.

Significant factors which could affect future liquidity include the following:

• the adequacy of available bank lines of credit;

• the ability to attract long-term capital with satisfactory terms;

• cash flows generated from operating activities;

• acquisitions; and

• capital expenditures.

Our primary capital needs are for working capital obligations and other general corporate purposes, including acquisitions and capital expenditures. Our primary sources of working capital are cash from operations and cash equivalents supplemented by bank

43

borrowings. In the past, we have financed larger acquisitions initially through increased bank borrowings and the issuance of common stock or preferred stock. We then repay any such borrowings with cash flows from operations. We have funded most of our capital expenditures with cash on hand or through increased bank borrowings, including equipment financing, and then have reduced those obligations with cash flows from operations.

We believe we have adequate current liquidity and availability of capital to fund our present operations, meet our commitments on our existing debt and fund anticipated growth, including expansion in existing and targeted market areas. We seek potential acquisitions from time to time and hold discussions with certain acquisition candidates. If suitable acquisition opportunities or working capital needs arise that require additional financing, we believe that our financial position and earnings history provide a sufficient base for obtaining additional financing resources at reasonable rates and terms. We may also choose to issue additional shares of common stock or preferred stock in order to raise funds.

The following table summarizes our cash flows for the periods indicated (in thousands):

	Nine Months Ended June 30,
	2018			2017
Net cash provided by (used in) operating activities	$	(1,019	)	$	74,173
Net cash provided by (used in) investing activities		(2,749,657	)		(158,576	)
Net cash provided by (used in) financing activities		2,638,850			86,024
Effect of exchange rate changes on cash and cash equivalents		1,127			48
Net increase (decrease) in cash and cash equivalents	$	(110,699	)	$	1,669

Operating Activities

Net cash used in operating activities was $1.0 million in 2018, compared to $74.2 million provided by operating activities in 2017. Cash from operations decreased $75.2 million due to an incremental cash outflow of $85.8 million stemming from changes to our net working capital, mainly driven by increases in both inventory and accounts payable. This decrease was partially offset by an increase in net income after adjustments for non-cash items of $10.6 million.

Investing Activities

Net cash used in investing activities was $2.75 billion in 2018, compared to $158.6 million in 2017. The $2.59 billion of additional investing cash flow spend was primarily due to the acquisitions finalized in 2018, primarily driven by the acquisition of Allied Building Products Corp, which closed on January 2, 2018.

Financing Activities

Net cash provided by financing activities was $2.64 billionin 2018, compared to $86.0 million in 2017. The financing cash flow increase of $2.55 billion was primarily due to the net increase in outstanding debt resulting from the new financing arrangements that we entered into in connection with the Allied Acquisition (see Note 8 in the Notes to the Consolidated Financial Statements) as well as the $400.0 million in gross proceeds received from the Preferred Stock issuance (see Note 3 in the Notes to the Consolidated Financial Statements).

Capital Resources

As of June 30, 2018, we had access to the following financing arrangements:

• an asset-based revolving line of credit in the United States;

• an asset-based revolving line of credit in Canada;

• a term loan; and

• two separate senior notes instruments

Financing - Allied Acquisition

In connection with the Allied Acquisition, we entered into various financing arrangements totaling $3.57 billion, including an asset-based revolving line of credit of $1.30 billion (“2023 ABL”), $525.0 million of which was drawn at closing, and a $970.0 million term loan (“2025 Term Loan”). We also raised an additional $1.30 billion through the issuance of senior notes (the “2025 Senior Notes”).

The proceeds from these financing arrangements were used to finance the Allied Acquisition, to refinance or otherwise extinguish all third-party indebtedness, to pay fees and expenses associated with the acquisition, and to provide working capital and

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funds for other general corporate purposes. We capitalized new debt issuance costs totaling approximately $65.8 million related to the 2023 ABL, the 2025 Term Loan and the 2025 Senior Notes.

Since the financing arrangements entered into in connection with the Allied Acquisition had certain lenders who also participated in our previous financing arrangements, portions of the transactions were accounted for as either a debt modification or a debt extinguishment. In accordance with the accounting for debt modification, we expensed $2.0 million of debt issuance costs related to the Allied financing arrangements and recognized a loss on debt extinguishment of $1.7 million. The remainder of the debt issuance costs will be amortized over the term of the Allied financing arrangements.

2023 ABL

On January 2, 2018, we entered into a $1.30 billion asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2023 ABL consists of revolving loans in both the United States (“2023 U.S. Revolver”) in the amount of $1.20 billion and Canada (“2023 Canada Revolver”) in the amount of $100.0 million. The 2023 ABL has a maturity date of January 2, 2023. The 2023 ABL has various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The current unused commitment fees on the 2023 ABL are 0.25% per annum.

There is one financial covenant under the 2023 ABL, which is a Consolidated Fixed Charge Ratio. The Consolidated Fixed Charge Ratio is calculated by dividing consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) by Consolidated Fixed Charges (both as defined in the agreement). Per the covenant, our Consolidated Fixed Charge Ratio has to be a minimum of 1.00 at the end of each fiscal quarter, calculated on a trailing four quarter basis.

The 2023 ABL is secured by a first priority lien over substantially all of our and each guarantor’s accounts, chattel paper, deposit accounts, books, records and inventory (as well as intangibles related thereto), subject to certain customary exceptions (the “ABL Priority Collateral”), and a second priority lien over substantially all of our and each guarantor’s other assets, including all of the equity interests of any subsidiary held by us or any guarantor, subject to certain customary exceptions (the “Term Priority Collateral”). The 2023 ABL is guaranteed jointly, severally, fully and unconditionally by our active United States subsidiaries.

As of June 30, 2018, the total balance outstanding on the 2023 ABL, net of $11.3 million of unamortized debt issuance costs, was $482.5 million. We also have outstanding standby letters of credit related to the 2023 U.S. Revolver in the amount of $14.8 million as of June 30, 2018.

2025 Term Loan

On January 2, 2018, we entered into a $970.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2025 Term Loan requires quarterly principal payments in the amount of $2.4 million, with the remaining outstanding principal to be paid on its maturity date of January 2, 2025. The interest rate is based on a LIBOR rate (with a floor) plus a fixed spread. We have the option of selecting a LIBOR period that determines the rate at which interest can accrue on the Term Loan as well as the period in which interest payments are made.

The 2025 Term Loan is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The Term Loan is guaranteed jointly, severally, fully and unconditionally by our active United States subsidiaries.

As of June 30, 2018, the outstanding balance on the 2025 Term Loan, net of $36.2 million of unamortized debt issuance costs, was $931.3 million.

2025 Senior Notes

On October 25, 2017, Beacon Escrow Corporation, our wholly-owned subsidiary (the “Escrow Issuer”), completed a private offering of $1.30 billion aggregate principal amount of 4.875% Senior Notes due 2025 at an issue price of 100%. The 2025 Senior Notes bear interest at a rate of 4.875% per annum, payable semi-annually in arrears, beginning May 1, 2018. We anticipate repaying the 2025 Senior Notes at the maturity date of November 1, 2025. Per the terms of the Escrow Agreement, the net proceeds from the 2025 Senior Notes remained in escrow until they were used to fund a portion of the purchase price of the Allied Acquisition payable at closing on January 2, 2018.  

Upon closing of the Allied Acquisition on January 2, 2018, (i) the Escrow Issuer merged with and into us, and we assumed all obligations under the 2025 Senior Notes; and (ii) all our existing domestic subsidiaries (including the entities acquired in the Allied Acquisition) became guarantors of the 2025 Senior Notes.

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As of June 30, 2018, the outstanding balance on the 2025 Senior Notes, net of $20.6 million of debt issuance costs, was $1.28 billion.

Financing - RSG Acquisition

In connection with the Roofing Supply Group (“RSG”) acquisition, we entered into various financing arrangements totaling $1.45 billion, including an asset-based revolving line of credit (“2020 ABL”) of $700.0 million ($350.0 million of which was drawn at closing) and a $450.0 million term loan (“2022 Term Loan”). We also raised an additional $300.0 million through the issuance of senior notes (the “2023 Senior Notes”).

The proceeds from these financing arrangements were used to provide working capital and funds for other general corporate purposes, to refinance or otherwise extinguish all third-party indebtedness, to finance the acquisition, and to pay fees and expenses associated with the RSG acquisition. We incurred debt issuance costs totaling approximately $31.3 million related to the 2020 ABL, 2022 Term Loan, and 2023 Senior Notes.

2020 ABL

On October 1, 2015, we entered into a $700.0 million asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2020 ABL had an original maturity date of October 1, 2020 and consisted of revolving loans in both the United States (“2020 U.S. Revolver”) in the amount of $670.0 million and Canada (“Canada Revolver”) in the amount of $30.0 million. The 2020 ABL had various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The full balance of the 2020 ABL was paid on January 2, 2018 in conjunction with the Allied Acquisition.  

2022 Term Loan

On October 1, 2015, we entered into a $450.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2022 Term Loan required quarterly principal payments in the amount of $1.1 million, with the remaining outstanding principal to be paid on its original maturity date of October 1, 2022. The interest rate was based on a LIBOR rate (with a floor) plus a fixed spread. We had the option of selecting a LIBOR period that determines the rate at which interest would accrue, as well as the period in which interest payments are made. The full balance of the 2022 Term Loan was paid on January 2, 2018 in conjunction with the Allied Acquisition, including the write-off of $0.7 million in debt issuance costs.  

2023 Senior Notes

On October 1, 2015, we raised $300.0 million by issuing senior notes due 2023. The 2023 Senior Notes have a coupon rate of 6.38% per annum and are payable semi-annually in arrears, beginning April 1, 2016. There are early payment provisions in the indenture in which we would be subject to “make whole” provisions. We anticipate repaying the notes at the maturity date of October 1, 2023.

The 2023 Senior Notes are guaranteed jointly, severally, fully and unconditionally by our active United States subsidiaries.

As of June 30, 2018, the outstanding balance on the 2023 Senior Notes, net of $6.7 million of unamortized debt issuance costs, was $293.3 million.

Equipment Financing Facilities and Other

As of June 30, 2018, we had $12.3 million outstanding under equipment financing facilities, with fixed interest rates ranging from 2.33% to 3.25% and payments due through September 2021.

As of June 30, 2018, we had $13.7 million of capital lease obligations outstanding. These leases have interest rates ranging from 2.72% to 10.39% with payments due through November 2021.

46

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

Our disclosure and analysis in this report contains forward-looking information that involves risks and uncertainties. Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of future performance, statements of management’s plans and objectives, future contracts, and forecasts of trends and other matters. You can identify these statements 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. No assurance can be given that the results in any forward-looking statements will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act.

Certain factors that may affect our business and could cause actual results to differ materially from those expressed in any forward-looking statements include those set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.

47

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of its 2017 Annual Report on Form 10-K have not changed materially during the nine month period ended June 30, 2018.

Item  4. Controls and Procedures

As of June 30, 2018, management, including the CEO and CFO, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Act”)). Based on that evaluation, management, including the CEO and CFO, concluded that as of June 30, 2018, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

On January 2, 2018, we completed our acquisition of Allied Building Products Corp. and an affiliated entity ("Allied"). In conducting our assessment of the effectiveness of our internal controls over financial reporting during the quarter, management has elected to exclude Allied from our controls assessment for the remainder of fiscal year 2018, as permitted under existing SEC staff guidance. We are currently in the process of integrating and assessing Allied’s historical internal controls over financial reporting with those of the rest of the Company. The integration may lead to changes in future periods, but we do not expect these changes to materially affect our internal controls over financial reporting.  

Including the Allied acquisition, there has been no change to our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

48

Part II. OTHER INFORMATION

Item 6. Exhibits

			Incorporated by Reference
Exhibit Number		Description		Form	File No.	Exhibit	Filing Date
31.1*	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
31.2*	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)
32.1*	Certification pursuant to 18 U.S.C. Section 1350
101*	101.INS XBRL Instance
	101.SCH XBRL Taxonomy Extension Schema
		101.CAL XBRL Taxonomy Extension Calculation
		101.LAB XBRL Taxonomy Extension Labels
		101.CAL XBRL Taxonomy Extension Calculation
		101.PRE XBRL Taxonomy Extension Presentation
		101.LAB XBRL Taxonomy Extension Labels
		101.DEF XBRL Taxonomy Extension Definition

* Filed herewith

Pursuant to Rule 405 of Regulation S-T, the following interactive data files formatted in Extensible Business Reporting Language (XBRL) are attached as Exhibit 101 to this Quarterly Report on Form 10-Q: (i) the Consolidated Balance Sheets as of June 30, 2018; September 30, 2017; and June 30, 2017, (ii) the Consolidated Statements of Operations for the three and nine months ended June 30, 2018 and June 30, 2017, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, 2018 and June 30, 2017, (iv) the Consolidated Statements of Cash Flows for the nine months ended June 30, 2018 and June 30, 2017, and (v) the Notes to Condensed Consolidated Financial Statements.

49

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BEACON ROOFING SUPPLY, INC.
Date: August 8, 2018	BY:	/s/ JOSEPH M. NOWICKI
		Joseph M. Nowicki
		Executive Vice President & Chief Financial Officer

50

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul M. Isabella, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Beacon Roofing Supply, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2018	/s/ PAUL M. ISABELLA
	Paul M. Isabella
	President & Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph M. Nowicki, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Beacon Roofing Supply, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2018	/s/ JOSEPH M. NOWICKI
	Joseph M. Nowicki
	Executive Vice President & Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of Beacon Roofing Supply, Inc. (the “Company”) for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Paul M. Isabella, as President & Chief Executive Officer of the Company, and Joseph M. Nowicki, as Executive Vice President & Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2018	/s/ PAUL M. ISABELLA
	Paul M. Isabella
	President & Chief Executive Officer
	/s/ JOSEPH M. NOWICKI
	Joseph M. Nowicki
	Executive Vice President & Chief Financial Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906 has been provided to Beacon Roofing Supply, Inc. and will be retained by Beacon Roofing Supply, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	BECN
Entity Registrant Name	BEACON ROOFING SUPPLY INC
Entity Central Index Key	0001124941
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		68,111,464

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Current assets:
Cash and cash equivalents	$ 27,551	$ 138,250	$ 33,055
Accounts receivable, less allowance of $13,963, $11,829 and $13,253 as of June 30, 2018, September 30, 2017 and June 30, 2017, respectively	1,077,888	704,527	670,977
Inventories, net	1,165,389	551,924	641,425
Prepaid expenses and other current assets	337,589	209,138	221,477
Total current assets	2,608,417	1,603,839	1,566,934
Property and equipment, net	288,708	156,129	156,951
Goodwill	2,321,180	1,251,986	1,256,014
Intangibles, net	1,371,005	429,069	442,962
Other assets, net	1,511	8,534	1,511
Total Assets	6,590,821	3,449,557	3,424,372
Current liabilities:
Accounts payable	719,686	503,697	387,579
Accrued expenses	520,952	261,297	280,315
Current portions of long-term debt	19,714	14,141	13,762
Total current liabilities	1,260,352	779,135	681,656
Borrowings under revolving lines of credit, net	482,489	3,205	449,615
Long-term debt, net	2,494,308	721,268	721,685
Deferred income taxes, net	93,928	138,383	142,116
Long-term obligations under equipment financing and other, net	15,979	23,213	26,025
Other long-term liabilities	6,319	2,547	2,387
Total liabilities	4,353,375	1,667,751	2,023,484
Commitments and contingencies (Note 9)
Convertible preferred stock; $0.01 par value; 400,000 shares authorized, issued and outstanding as of June 30, 2018; none authorized, issued and outstanding as of September 30, 2017 or June 30, 2017	399,195
Stockholders' equity:
Common stock (voting); $0.01 par value; 100,000,000 shares authorized; 68,105,113 issued and outstanding as of June 30, 2018; 67,700,858 issued and outstanding as of September 30, 2017; 60,361,035 issued and outstanding at June 30, 2017	681	677	603
Undesignated preferred stock; 5,000,000 shares authorized, none issued or outstanding	0	0	0
Additional paid-in capital	1,063,137	1,047,506	714,608
Retained earnings	792,502	748,186	703,055
Accumulated other comprehensive loss	(18,069)	(14,563)	(17,378)
Total stockholders' equity	1,838,251	1,781,806	1,400,888
Total Liabilities and Stockholders' Equity	$ 6,590,821	$ 3,449,557	$ 3,424,372

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Statement Of Financial Position [Abstract]
Accounts receivable, allowances	$ 13,963	$ 11,829	$ 13,253
Convertible preferred stock, par value	$ 0.01
Convertible preferred stock, shares authorized	400,000	0	0
Convertible preferred stock, shares issued	400,000	0	0
Convertible preferred stock, shares outstanding	400,000	0	0
Common stock (voting), par value	$ 0.01	$ 0.01	$ 0.01
Common stock (voting), shares authorized	100,000,000	100,000,000	100,000,000
Common Stock (Voting), issued	68,105,113	67,700,858	60,361,035
Common Stock (voting), outstanding	68,105,113	67,700,858	60,361,035
Undesignated Preferred Stock, shares authorized	5,000,000	5,000,000	5,000,000
Undesignated Preferred Stock, issued	0	0	0
Undesignated Preferred Stock, outstanding	0	0	0

XML

Consolidated Statements of Operations - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Net sales		$ 1,934,951	$ 1,213,894	$ 4,482,555	$ 3,086,802
Cost of products sold		1,441,057	916,140	3,380,531	2,333,504
Gross profit		493,894	297,754	1,102,024	753,298
Operating expense:
Selling, general and administrative		323,194	183,600	858,534	538,288
Depreciation		15,811	8,579	41,640	25,122
Amortization		50,076	20,704	105,339	61,116
Total operating expense		389,081	212,883	1,005,513	624,526
Income (loss) from operations		104,813	84,871	96,511	128,772
Interest expense, financing costs, and other		37,348	13,397	99,486	39,239
Income (loss) before provision for income taxes		67,465	71,474	(2,975)	89,533
Provision for (benefit from) income taxes		18,090	26,815	(53,291)	33,800
Net income (loss)		49,375	44,659	50,316	55,733
Dividends on preferred shares	[1]	6,000	0	12,000	0
Net income (loss) attributable to common shareholders		$ 43,375	$ 44,659	$ 38,316	$ 55,733
Weighted-average common stock outstanding:
Basic		68,086,387	60,311,923	67,976,980	60,131,546
Diluted		69,148,143	61,350,843	69,240,040	61,163,591
Net income (loss) per share:
Basic	[2]	$ 0.56	$ 0.74	$ 0.52	$ 0.93
Diluted	[2]	$ 0.55	$ 0.73	$ 0.51	$ 0.91

[1] For the three months ended June 30, 2018, $6.0 million is comprised entirely of cumulative dividends that are undeclared as of period end. For the nine months ended June 30, 2018, $12.0 million is comprised of the $6.0 million undeclared cumulative dividends as well as an additional $6.0 million of preferred share dividends that had been declared and paid as of period end.

[2] See Note 4 for detailed calculations and further discussion.

XML

Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
		Jun. 30, 2018	Jun. 30, 2018
Income Statement [Abstract]
Cumulative preferred share dividends undeclared		$ 6,000	$ 6,000
Dividends on preferred shares	[1]	$ 6,000	12,000
Preferred share dividends declared and paid			$ 6,000

[1] For the three months ended June 30, 2018, $6.0 million is comprised entirely of cumulative dividends that are undeclared as of period end. For the nine months ended June 30, 2018, $12.0 million is comprised of the $6.0 million undeclared cumulative dividends as well as an additional $6.0 million of preferred share dividends that had been declared and paid as of period end.

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)	$ 49,375	$ 44,659	$ 50,316	$ 55,733
Other comprehensive income (loss):
Foreign currency translation adjustment	(1,535)	1,730	(3,506)	891
Total other comprehensive income (loss)	(1,535)	1,730	(3,506)	891
Comprehensive income (loss)	$ 47,840	$ 46,389	$ 46,810	$ 56,624

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands		9 Months Ended
		Jun. 30, 2018	Jun. 30, 2017
Operating Activities
Net income (loss)		$ 50,316	$ 55,733
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		146,979	86,238
Stock-based compensation		13,133	11,227
Certain interest expense and other financing costs		11,549	3,989
Loss on debt extinguishment		1,726	0
Gain on sale of fixed assets		(1,131)	(726)
Deferred income taxes	[1]	(48,855)	6,625
Changes in operating assets and liabilities, net of the effects of businesses acquired:
Accounts receivable		(52,024)	(28,309)
Inventories		(299,881)	(141,942)
Prepaid expenses and other assets		(19,511)	(55,973)
Accounts payable and accrued expenses		195,948	137,290
Other liabilities		732	21
Net cash provided by (used in) operating activities		(1,019)	74,173
Investing Activities
Purchases of property and equipment		(34,978)	(31,882)
Acquisition of businesses, net		(2,715,429)	(128,533)
Proceeds from the sale of assets		750	1,839
Net cash provided by (used in) investing activities		(2,749,657)	(158,576)
Financing Activities
Borrowings under revolving lines of credit		2,122,949	1,721,927
Repayments under revolving lines of credit		(1,631,978)	(1,633,570)
Borrowings under term loan		970,000	0
Repayments under term loan		(443,425)	(3,375)
Borrowings under senior notes		1,300,000	0
Payment of debt issuance costs		(65,788)	0
Repayments under equipment financing facilities and other		(8,604)	(7,780)
Proceeds from issuance of convertible preferred stock		400,000	0
Payment of stock issuance costs		(1,279)	0
Payment of dividends on preferred stock		(6,000)	0
Proceeds from issuance of common stock related to equity awards		6,950	9,994
Taxes paid related to net share settlement of equity awards		(3,975)	(1,172)
Net cash provided by (used in) financing activities		2,638,850	86,024
Effect of exchange rate changes on cash and cash equivalents		1,127	48
Net increase (decrease) in cash and cash equivalents		(110,699)	1,669
Cash and cash equivalents, beginning of period		138,250	31,386
Cash and cash equivalents, end of period		27,551	33,055
Cash paid during the period for:
Interest		91,662	49,656
Income taxes, net of tax refunds		$ 33,751	$ 37,814

[1] Includes impact of provisional amounts recognized relating to estimated impact of Tax Cuts and Jobs Act of 2017 – see Note 12 for further discussion

XML

Company Overview

9 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Company Overview

1. Company Overview

Beacon Roofing Supply, Inc. (the “Company”) was incorporated in the state of Delaware on August 22, 1997 and is the largest publicly traded distributor of residential and non-residential roofing materials and complementary building products in the United States and Canada.

On January 2, 2018, the Company finalized its acquisition of Allied Building Products Corp., a New Jersey corporation, and an affiliated entity (together “Allied”) for $2.625 billion, subject to certain working capital and other adjustments (see Note 3 for further discussion). Allied engages in the distribution of roofing materials, drywall, ceiling tile, and related accessories in the United States and was a wholly-owned subsidiary of Oldcastle Distribution, Inc.

The Company operates its business under regional and local trade names and, as of June 30, 2018, the Company serviced customers in all 50 states within the United States and 6 provinces in Canada. The Company’s material subsidiaries are Beacon Sales Acquisition, Inc., Allied Building Products, LLC and Beacon Roofing Supply Canada Company.

XML

Summary of Significant Accounting Policies

9 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

Beacon Roofing Supply, Inc. (the “Company”) prepared the condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the requirements of the Securities and Exchange Commission (“SEC”). As permitted under those rules, certain footnotes or other financial information have been condensed or omitted. Certain prior period amounts have been reclassified to conform to current period presentation. The balance sheet as of June 30, 2017 has been presented for a better understanding of the impact of seasonal fluctuations on the Company’s financial condition.

In management’s opinion, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and nine months ended June 30, 2018 are not necessarily indicative of the results to be expected for the twelve months ending September 30, 2018 (“fiscal year 2018” or “2018”).

The three-month periods ended June 30, 2018 and 2017 each had 64 business days and the nine-month periods ended June 30, 2018 and 2017 each had 189 business days, respectively.

These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in the Company’s fiscal year 2017 (“2017”) Annual Report on Form 10-K for the year ended September 30, 2017.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Significant items subject to such estimates include inventories, purchase price allocations, recoverability of goodwill and intangibles, and income taxes. Actual amounts could differ from those estimates.

Recent Accounting Pronouncements—Adopted

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” This guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The provisions of this standard were effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2016, and early adoption was permitted. The Company adopted this guidance effective October 1, 2017. As a result, the Company now records excess tax benefits (or deficiencies) as income tax benefits (or expenses) in our consolidated statements of operations rather than as additional paid-in-capital in its consolidated balance sheets. ASU 2016-09 allowed for this guidance to be applied prospectively or retrospectively.  The Company elected to apply this guidance prospectively, and recognized $0.1 million and $3.0 million of excess tax benefits in our consolidated statement of operations related to equity award transactions executed in the period for the three and nine months ended June 30, 2018. To align with the prospective treatment in our consolidated statements of operations, the Company now classifies excess tax benefits (or deficiencies) along with accrued income taxes in operating activities within our consolidated statements of cash flows. The Company elected to retain its historical approach to accounting for forfeitures and statutory tax withholding requirements, therefore these specific aspects of the new guidance had no impact on its financial statements and related disclosures.

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash.” This guidance standardizes the presentation of changes to restricted cash on the statement of cash flows by requiring that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amount generally described as restricted cash or restricted cash equivalents. The provisions of this standard are effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company adopted this guidance effective October 1, 2017 and applied it retrospectively, and the standard did not have a material impact on the Company’s financial statement and related disclosures.

Recent Accounting Pronouncements—Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, and will replace most existing revenue recognition guidance when it becomes effective. The new standard is effective for public business entities for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted for annual reporting periods beginning after December 15, 2016. The standard permits the use of either the full retrospective or modified retrospective adoption methods. The Company is continuing to perform a detailed evaluation, using a five-step model specified in the guidance, to assess the impacts of the new standard on our legacy and newly acquired businesses, and expects to apply the guidance using the modified retrospective method. Based on the Company’s knowledge of its revenue transactions, the Company does not expect the adoption of this new guidance to have a material impact on its financial statements, but does expect that it will result in additional revenue recognition disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases.” This guidance will replace most existing accounting for lease guidance when it becomes effective. This new standard is effective using the modified retrospective approach for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2018, and early adoption is permitted. In July 2018, the FASB amended the new lease standard which, among other changes, allows a company to elect to adopt ASU 2016-02 using a transition option whereby a cumulative effect adjustment is recorded to the opening balance of its retained earnings on the adoption date. The guidance will require the Company to record a right of use asset and a lease liability for most of the Company’s leases, including those currently treated as operating leases. The Company is in the process of evaluating the impact of the standard and has decided that it will use the practical expedients outlined in the transition guidance. The scope of the overall impact on the Company’s financial statements and related disclosures is still being quantified.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impact that this guidance may have on its financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business.” This guidance is intended to assist entities when evaluating when a set of transferred assets and activities constitutes a business. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Accounting for Goodwill Impairment.” This guidance is intended to introduce a simplified approach to measurement of goodwill impairment, eliminating the need for a hypothetical purchase price allocation and instead measuring impairment by the amount a reporting unit’s carrying value exceeds its fair value. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In May 2017, the FASB issued ASU 2017-09, “Scope of Modification Accounting.” This guidance is intended to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income.” This guidance is intended to address the accounting treatment for the tax effects on items within accumulated other comprehensive income as a result of the adoption of the Tax Cuts and Jobs Act of 2017 (see Note 12 for further discussion). This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2018, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

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Acquisitions

9 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Acquisitions

3. Acquisitions

Allied Building Products Corp.

On January 2, 2018 (the “Closing Date”), the Company completed its previously announced acquisition (the “Allied Acquisition”) of all the outstanding capital stock of Allied Building Products Corp. and an affiliated entity (together, “Allied”), pursuant to that certain Stock Purchase Agreement, dated August 24, 2017 (the “Stock Purchase Agreement”), among the Company, Oldcastle, Inc., as parent, and Oldcastle Distribution, Inc., as seller, for approximately $2.625 billion in cash, subject to a working capital and certain other adjustments as set forth in the Stock Purchase Agreement (the “Purchase Price”). As of June 30, 2018, the Company recorded a net working capital adjustment of $88.1 million.  

In connection with the Allied Acquisition, on the Closing Date the Company entered into (i) a new term loan agreement with Citibank, N.A., providing for a term loan B facility with an initial commitment of $970.0 million and (ii) an amended and restated credit agreement with Wells Fargo Bank, N.A., providing for a senior secured asset-based revolving credit facility with an initial commitment of $1.30 billion. Base borrowing rates on these facilities are at LIBOR plus 1.25% and LIBOR plus 2.25%, respectively.

In connection with the Allied Acquisition, on the Closing Date, the Company completed the sale of 400,000 shares of Series A Cumulative Convertible Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), with an aggregate liquidation preference of $400.0 million, at a purchase price of $1,000 per share, to CD&R Boulder Holdings, L.P., pursuant to that certain Investment Agreement, dated as of August 24, 2017, with CD&R Boulder Holdings, L.P. and Clayton, Dubilier & Rice Fund IX, L.P. (solely for the purpose of limited provisions therein) (the “Convertible Preferred Stock Purchase”). The $400.0 million in proceeds from the Convertible Preferred Stock Purchase were used to finance, in part, the Purchase Price. The Preferred Stock is convertible perpetual participating preferred stock of the Company, and conversion of the Preferred Stock into $0.01 par value shares of the Company’s common stock will be at a conversion price of $41.26 per share. The Preferred Stock accumulates dividends at a rate of 6.0% per annum (payable in cash or in-kind, subject to certain conditions). The Preferred Stock is not mandatorily redeemable; therefore it is classified on the Company’s consolidated balance sheets as mezzanine equity and recognized at $399.2 million (the $400.0 million proceeds received on the Closing Date, net of $0.8 million of issuance costs).   

Allied’s results of operations have been included with Company’s consolidated results beginning January 2, 2018. Allied distributed products in 208 locations across 31 states as of the date of the close.

The Allied Acquisition has been accounted for as a business combination in accordance with the requirements of ASC 805 Business Combinations. The acquisition price has been allocated among assets acquired and liabilities assumed at fair value based on information currently available, with the excess recorded as goodwill. The goodwill recognized is attributable primarily to expected synergies from the Allied assembled workforce operating the branches as part of a larger network and the value stemming from the addition of both new customers and an established new line of business (interiors). The Company has recorded purchase accounting entries on a preliminary basis for the Allied Acquisition, detailed as follows (in thousands):

	January 2, 2018						January 2, 2018
	(as reported at March 31, 2018)			Adjustments			(as adjusted at June 30, 2018)
Cash	$	19,322		$	(19,153	)	$	169
Accounts receivable		315,485			7,477			322,962
Inventory		322,705			(8,047	)		314,658
Prepaid and other current assets		59,279			15,865			75,144
Property, plant, and equipment		139,528			(168	)		139,360
Goodwill		1,130,635			(61,137	)		1,069,498
Intangible assets		1,037,000			10,000			1,047,000
Current liabilities		(271,252	)		18,204			(253,048	)
Non-current liabilities		(6,820	)		4,175			(2,645	)
Total purchase price	$	2,745,882		$	(32,784	)	$	2,713,098

The purchase accounting entries above assume the Company will make a Section 338(h)(10) election under the current U.S. tax code. As of June 30, 2018 the Company had not made this election, but expects to do so in in the fourth quarter of fiscal year 2018 and has reflected the impact of this future election in its fiscal year 2018 tax provision accordingly. Upon making the Section 338(h)(10) election, the Company will then determine the amount of Allied goodwill that will become tax deductible. All of the Company’s goodwill plus the indefinite-lived trade name are tested for impairment annually, and all acquired goodwill and intangible assets are subject to review for impairment should future indicators of impairment develop. There were no material contingencies assumed as part of the Allied acquisition.

Net sales from the Allied Acquisition included in the Company’s statements of operations for the nine months ended June 30, 2018 were $1.32 billion. Net income (loss) from the Allied Acquisition included in the Company’s statements of operations for the nine months ended June 30, 2018 was $15.8 million.   

The following table represents the unaudited pro forma consolidated net sales and net income (loss) for the Company for the periods indicated (in thousands):

	Nine Months Ended June 30, 2018		Nine Months Ended June 30, 2017
	(unaudited)
Net sales	$	5,148,204	$	4,958,292
Net income (loss)		11,394		15,654

The above pro forma results have been calculated by combining the historical results of the Company and Allied as if the Allied Acquisition had occurred on the first day of the fiscal year (October 1) for each of the periods presented. The income tax provision used to calculate net income (loss) for the respective periods presented has been adjusted to reflect the effective tax rate for the annual periods as if it had been based on the resulting, combined results. The pro forma results include estimates for intangible asset amortization, depreciation, interest expense and debt issuance costs and are subject to change once final asset values have been determined. No other material pro forma adjustments were deemed necessary to conform to the Company’s accounting policies or for any other situation. The pro forma information is not necessarily indicative of the results that would have been achieved had the transactions occurred on the first day of the fiscal years presented or that may be achieved in the future.

Additional Acquisitions – Fiscal Year 2018

During the nine months ended June 30, 2018, the Company acquired 1 branch from the following acquisition:

• On May 1, 2018, the Company acquired Tri-State Builder’s Supply, a wholesale supplier of roofing, siding, windows, doors and related building products with 1 branch located in Duluth, Minnesota and annual sales of approximately $6 million.

The Company recorded the acquired assets and liabilities related to this transaction at their estimated fair value as of the respective acquisition date, with resulting goodwill of $1.3 million (all of which is deductible for tax purposes) and $0.8 million in intangible assets associated with this acquisition.

Additional Acquisitions – Fiscal Year 2017

During fiscal year 2017, the Company acquired 23 branches from the following five acquisitions:

• On December 16, 2016, the Company purchased certain assets of BJ Supply Company, a distributor of roofing and related building products with 1 branch serving Pennsylvania and New Jersey and annual sales of approximately $4 million. The Company has finalized the acquisition accounting entries for this transaction.

• On January 3, 2017, the Company acquired American Building & Roofing, Inc., a distributor of mainly residential roofing and related building products with 7 branches around Washington State and annual sales of approximately $36 million. The Company has finalized the acquisition accounting entries for this transaction.

• On January 9, 2017, the Company acquired Eco Insulation Supply, a distributor of insulation and related accessories with 1 branch serving Connecticut, Southern New England and the New York City metropolitan area and annual sales of approximately $8 million. The Company has finalized the acquisition accounting entries for this transaction.

• On March 1, 2017, the Company acquired Acme Building Materials, Inc., a distributor of residential roofing and related building products with 3 branches in Eastern Michigan and annual sales of approximately $13 million. The Company has finalized the acquisition accounting entries for this transaction.

• On May 1, 2017, the Company purchased certain assets of Lowry’s Inc., a distributor of waterproofing and concrete restoration materials with 11 branches operating in California, Arizona, Utah and Hawaii and annual sales of approximately $76 million. The Company has finalized the acquisition accounting entries for this transaction.

The Company recorded the acquired assets and liabilities related to these transactions at their estimated fair values as of the respective acquisition dates, with resulting goodwill of $53.0 million (all of which is deductible for tax purposes) and $47.4 million in intangible assets associated with these other acquisitions.

For those acquisitions where the acquisition accounting entries have yet to be finalized, the Company’s allocation of the purchase price is subject to change on receipt of additional information, including, but not limited to, the finalization of asset valuations (intangible and fixed) and income tax accounting as well as the Company’s continued review of the assumed liabilities that may result in the recognition of changes to the carrying amounts on the opening balance sheet and a related adjustment to goodwill.

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Net Income (Loss) Per Share

9 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

4. Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common shareholders by the fully diluted weighted-average number of common shares outstanding during the period.

Holders of Preferred Stock participate in dividends on an as-converted basis when declared on common shares. As a result, Preferred Stock is classified as a participating security and thereby requires the allocation income that would have otherwise been available to common shareholders when calculating net income (loss) per share.

Diluted net income (loss) per share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common shareholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.  

The following table presents the components and calculations of basic and diluted net income (loss) per share for each period presented (in thousands, except share and per share amounts):

	Three Months Ended June 30,					Nine Months Ended June 30,
	2018			2017		2018			2017
Net income (loss)	$	49,375		$	44,659	$	50,316		$	55,733
Dividends on preferred shares		(6,000	)		-		(12,000	)		-
Net income (loss) attributable to common shareholders	$	43,375		$	44,659	$	38,316		$	55,733
Undistributed income allocated to participating securities		(5,406	)		-		(3,293	)		-
Net income (loss) attributable to common shareholders - basic and diluted	$	37,969		$	44,659	$	35,023		$	55,733
Weighted-average common shares outstanding - basic		68,086,387			60,311,923		67,976,980			60,131,546
Effect of common share equivalents		1,061,756			1,038,920		1,263,060			1,032,045
Weighted-average common shares outstanding - diluted		69,148,143			61,350,843		69,240,040			61,163,591
Net income (loss) per share - basic	$	0.56		$	0.74	$	0.52		$	0.93
Net income (loss) per share - diluted	$	0.55		$	0.73	$	0.51		$	0.91

The following table includes the number of shares that may be dilutive common shares in the future. These shares were not included in the computation of diluted net income (loss) per share because the effect was either anti-dilutive or the requisite performance conditions were not met:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Stock options		484,358		247,102		349,281		359,757
Restricted stock units		355,891		-		148,638		82,520
Preferred Stock		9,694,619		-		6,392,056		-

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Stockholders' Equity

9 Months Ended

Jun. 30, 2018

Equity [Abstract]

Stockholders' Equity

5. Stockholders’ Equity

The following table presents the activity included in stockholders’ equity during the nine months ended June 30, 2018 (in thousands, except share amounts):

											Accumulated
	Common Stock				Additional Paid-in			Retained			Other Comprehensive			Total Stockholders'
	Shares		Amount		Capital			Earnings			Loss			Equity
Balance at September 30, 2017		67,700,858	$	677	$	1,047,506		$	748,186		$	(14,563	)	$	1,781,806
Issuance of common stock, net of shares withheld for taxes		404,255		4		2,972			-			-			2,976
Issuance costs related to secondary offering of common stock		-		-		(474	)		-			-			(474	)
Stock-based compensation		-		-		13,133			-			-			13,133
Other comprehensive income (loss)		-		-		-			-			(3,506	)		(3,506	)
Net income (loss)		-		-		-			50,316			-			50,316
Dividends on preferred shares1		-		-		-			(6,000	)		-			(6,000	)
Balance at June 30, 2018		68,105,113	$	681	$	1,063,137		$	792,502		$	(18,069	)	$	1,838,251

________________________________

¹ Amount represents only dividends that have been declared as of June 30, 2018.

Common Stock

The Company is authorized to issue 100 million shares of common stock. As of June 30, 2018, September 30, 2017, and June 30, 2017 there were 68,105,113, 67,700,858 and 60,361,035 shares of common stock issued and outstanding, respectively.

Accumulated Other Comprehensive Loss

Other comprehensive income (loss) is comprised of certain gains and losses that are excluded from net income under GAAP and instead recorded as a separate element of stockholders’ equity.

The following table summarizes the components of and changes in accumulated other comprehensive loss (in thousands):

	Foreign Currency Translation			Accumulated Other Comprehensive Loss
Balance as of September 30, 2017	$	(14,563	)	$	(14,563	)
Other comprehensive income before reclassifications		(3,506	)		(3,506	)
Reclassifications out of other comprehensive loss		-			-
Balance as of June 30, 2018	$	(18,069	)	$	(18,069	)

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Stock-based Compensation

9 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

6. Stock-based Compensation

On February 9, 2016, the shareholders of the Company approved the Amended and Restated Beacon Roofing Supply, Inc. 2014 Stock Plan (the “2014 Plan”). The 2014 Plan provides for discretionary awards of stock options, stock awards, restricted stock units, and stock appreciation rights (“SARs”) for up to 5,000,000 shares of common stock to selected employees and non-employee directors. The 2014 Plan mandates that all forfeited, expired, and withheld shares, including those from the predecessor plans, be returned to the 2014 Plan and made available for issuance. As of June 30, 2018, there were 3,748,856 shares of common stock available for issuance.

Prior to the 2014 Plan, the Company maintained the amended and restated Beacon Roofing Supply, Inc. 2004 Stock Plan (the “2004 Plan”). Upon shareholder approval of the 2014 Plan, the Company ceased issuing equity awards from the 2004 Plan and mandated that all future equity awards will be issued from the 2014 Plan.

For all equity awards granted prior to October 1, 2014, in the event of a change in control of the Company, all awards are immediately vested. Beginning in fiscal 2015, equity awards contained a “double trigger” change in control mechanism. Unless an award is continued or assumed by a public company in an equitable manner, an award shall become fully vested immediately prior to a change in control (at 100% of the grant target in the case of a performance-based restricted stock unit award). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award, unless there is a qualifying termination within one-year following the change in control, in which event the award shall immediately become fully vested (at 100% of the grant target in the case of a performance-based restricted stock unit award).

Stock Options

Non-qualified stock options generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in three annual installments over the three-year period following the grant dates.

The fair values of the options granted during the nine months ended June 30, 2018 were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Risk-free interest rate		2.10	%
Expected volatility		26.43	%
Expected life (in years)		5.46
Dividend yield	-

The following table summarizes all stock option activity for the nine months ended June 30, 2018 (in thousands, except share, per share, and time period amounts):

	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value1
Balance as of September 30, 2017		2,084,228		$	28.84		6.1	$	46,714
Granted		276,370			55.17
Exercised		(277,589	)		25.04
Canceled/Forfeited		(54,669	)		40.15
Expired		(1,991	)		15.28
Balance as of June 30, 2018		2,026,349		$	32.66		5.9	$	24,544
Vested and expected to vest after June 30, 2018		2,008,997		$	32.52		5.9	$	24,497
Exercisable as of June 30, 2018		1,470,856		$	27.30		4.9	$	22,871

________________________________

¹ Aggregate intrinsic value as represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.

During the three months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to stock options of $1.0 million and $1.1 million, respectively. During the nine months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to stock options of $2.9 million and $3.7 million, respectively. As of June 30, 2018, there was $5.7 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.9 years.

The following table summarizes additional information on stock options for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,
	2018		2017
Weighted-average fair value of stock options granted	$	15.86	$	14.21
Total grant date fair value of stock options vested		4,172		5,504
Total intrinsic value of stock options exercised		8,995		9,617

Restricted Stock Units

Restricted stock unit (“RSU”) awards granted to employees are subject to continued employment and generally vest on the third anniversary of the grant date. The Company also grants certain RSU awards to management that contain one or more additional vesting conditions tied directly to a defined performance metric for the Company. The actual number of RSUs that will vest can range from 0% to 200% of the original grant amount, depending upon actual Company performance below or above the established performance metric targets. The Company estimates performance in relation to the defined targets when determining the projected number of RSUs that are expected to vest and calculating the related stock-based compensation expense.

RSUs granted to non-employee directors are subject to continued service and vest on the first anniversary of the grant date (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the non-employee director’s service on the Board has terminated, and for non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director’s termination of service on the board. Beginning in fiscal year 2016, the Company enacted a policy that allows any non-employee directors who have Beacon equity holdings (defined as common stock and outstanding vested equity awards) with a total fair value that is greater than or equal to five times the annual Board cash retainer to elect to have any future RSU grants settle simultaneously with vesting.

The following table summarizes all restricted stock unit activity for the nine months ended June 30, 2018:

	RSUs Outstanding			Weighted- Average Grant Date Fair Value
Balance at September 30, 2017		770,973		$	38.95
Granted		370,190			57.40
Performance awards1		41,440			39.56
Released		(191,703	)		31.91
Canceled/Forfeited		(43,082	)		48.84
Balance at June 30, 2018		947,818		$	47.16
Vested and expected to vest after June 30, 20182		961,213		$	47.22

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¹ Additional restricted stock units outstanding as a result of the satisfaction of a performance vesting condition prior to the ascribed time-based vesting condition (release date).

² Amount of restricted stock units vested and expected to vest is larger than the balance outstanding at period end due to the impact of certain restricted stock unit awards with performance vesting condition estimates that are greater than 100% as of June 30, 2018.

During the three months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock units of $4.3 million and $2.6 million, respectively. During the nine months ended June 30, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock units of $10.2 million and $7.7 million, respectively. As of June 30, 2018, there was $23.3 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 1.8 years.

The following table summarizes additional information on RSUs for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,
	2018		2017
Weighted-average fair value of RSUs granted	$	57.40	$	47.31
Total grant date fair value of RSUs vested		6,656		4,552
Total intrinsic value of RSUs released		11,041		5,620

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Goodwill and Intangible Assets

9 Months Ended

Jun. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

Goodwill

The following table sets forth the change in the carrying amount of goodwill during the nine months ended June 30, 2018 and 2017, respectively (in thousands):

Balance at September 30, 2016	$	1,197,565
Acquisitions		58,234
Translation and other adjustments		215
Balance at June 30, 2017	$	1,256,014
Balance at September 30, 2017	$	1,251,986
Acquisitions		1,070,823
Translation and other adjustments		(1,629	)
Balance at June 30, 2018	$	2,321,180

The change in the carrying amount of goodwill for the nine months ended June 30, 2018 and 2017 is primarily attributable to the Company’s acquisitions finalized during the respective periods presented (see Note 3 for further discussion).

Intangible Assets

In connection with transactions finalized during the nine months ended June 30, 2018, the Company recorded intangible assets of $1.05 billion ($920.8 million of customer relationships, $6.6 million of beneficial lease arrangements, and $120.0 million of indefinite-lived trademarks). In connection with transactions finalized during fiscal year 2017, the Company recorded intangible assets of $47.4 million ($42.7 million of customer relationships, $4.6 million of amortizable trademarks, and $0.1 million of beneficial lease arrangements).

The following table summarizes intangible assets by category (in thousands, except time period amounts):

	June 30, 2018			September 30, 2017			June 30, 2017			Weighted- Average Remaining Life1 (Years)
Amortizable intangible assets:
Non-compete agreements	$	2,824		$	2,824		$	2,824			2.73
Customer relationships		1,530,434			610,026			605,326			18.85
Trademarks		10,500			10,500			7,650			7.78
Beneficial lease arrangements		7,644			1,060			960			4.94
Total amortizable intangible assets		1,551,402			624,410			616,760
Accumulated amortization		(373,447	)		(268,391	)		(246,848	)
Total amortizable intangible assets, net	$	1,177,955		$	356,019		$	369,912
Indefinite lived trademarks		193,050			73,050			73,050
Total intangibles, net	$	1,371,005		$	429,069		$	442,962

_________________________________

¹ As of June 30, 2018

For the three months ended June 30, 2018 and 2017, we recorded $50.1 million and $20.7 million of amortization expense relating to the above-listed intangible assets, respectively. For the nine months ended June 30, 2018 and 2017, we recorded $105.3 million and $61.1 million of amortization expense relating to the above-listed intangible assets, respectively. The intangible asset lives range from 5 to 20 years and have a weighted-average remaining life of 18.7 years as of June 30, 2018.

The following table summarizes the estimated future amortization expense for intangible assets (in thousands):

Year Ending September 30,
2018 (July - Sept)	$	25,010
2019		189,302
2020		182,398
2021		153,513
2022		125,948
Thereafter		501,784
	$	1,177,955

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Financing Arrangements

9 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Financing Arrangements

8. Financing Arrangements

The following table summarizes all financing arrangements from the respective periods presented (in thousands):

	June 30,			September 30,			June 30,
	2018			2017			2017
Revolving Lines of Credit:
2020 ABL
U.S. Revolver, expires October 1, 2020 1	$	-		$	-		$	437,285
Canada Revolver, expires October 1, 20202		-			3,205			12,330
2023 ABL
U.S. Revolver, expires January 2, 20233		471,857			-			-
Canada Revolver, expires January 2, 20234		10,632			-			-
Less: current portion		-			-			-
Borrowings under revolving lines of credit, net	$	482,489		$	3,205		$	449,615
Term Loans:
Term Loan, matures October 1, 20225	$	-		$	433,440		$	434,177
Term Loan, matures January 2, 20256		931,332			-			-
Less: current portion		(9,700	)		(4,500	)		(4,500	)
Total long-term borrowings under term loans	$	921,632		$	428,940		$	429,677
Senior Notes:
Senior Notes, mature October 20237		293,287			292,328			292,008
Senior Notes, mature November 20258		1,279,389			-			-
Less: current portion		-			-			-
Total long-term borrowings under Senior Notes	$	1,572,676		$	292,328		$	292,008
Long-term debt, net	$	2,494,308		$	721,268		$	721,685
Equipment Financing Facilities and Other:
Equipment financing facilities, various maturities through September 20219	$	12,288		$	12,898		$	14,314
Capital lease obligations, various maturities through November 202110		13,705			19,956			20,973
Total obligations under equipment financing facilities and other		25,993			32,854			35,287
Less: current portion		(10,014	)		(9,641	)		(9,262	)
Long-term obligations under equipment financing and other, net	$	15,979		$	23,213		$	26,025

________________________________ 

¹ Extinguished on January 2, 2018; Effective rate on borrowings of 3.28% as of June 30, 2017

² Extinguished on January 2, 2018; Effective rate on borrowings of 3.70% as of September 30, 2017 and 3.20% as of June 30, 2017

³ Effective rate on borrowings of 3.78% as of June 30, 2018

⁴ Effective rate on borrowings of 3.95% as of June 30, 2018

⁵ Extinguished on January 2, 2018; Interest rate of 3.50% as of September 30, 2017 and June 30, 2017 

⁶ Interest rate of 4.35% as of June 30, 2018

⁷ Interest rate of 6.38% as of June 30, 2018, September 30, 2017 and June 30, 2017

⁸ Interest rate of 4.88% as of June 30, 2018

⁹ Fixed interest rates ranging from 2.33% to 3.25% as of June 30, 2018, September 30, 2017, and June 30, 2017

¹⁰ Fixed interest rates ranging from 2.72% to 10.39% as of June 30, 2018 , September 30, 2017, and June 30, 2017

Financing - Allied Acquisition

In connection with the Allied Acquisition, the Company entered into various financing arrangements totaling $3.57 billion, including an asset-based revolving line of credit of $1.30 billion (“2023 ABL”), $525.0 million of which was drawn at closing, and a $970.0 million term loan (“2025 Term Loan”). The Company also raised an additional $1.30 billion through the issuance of senior notes (the “2025 Senior Notes”).

The proceeds from these financing arrangements were used to finance the Allied Acquisition, to refinance or otherwise extinguish all third-party indebtedness, to pay fees and expenses associated with the acquisition, and to provide working capital and funds for other general corporate purposes. The Company capitalized new debt issuance costs totaling approximately $65.8 million related to the 2023 ABL, the 2025 Term Loan and the 2025 Senior Notes.

Since the financing arrangements entered into in connection with the Allied Acquisition had certain lenders who also participated in previous financing arrangements entered into by the Company, portions of the transactions were accounted for as either a debt modification or  a debt extinguishment. In accordance with the accounting for debt modification, the Company expensed $2.0 million of debt issuance costs related to the Allied financing arrangements and recognized a loss on debt extinguishment of $1.7 million.  The remainder of the debt issuance costs will be amortized over the term of the Allied financing arrangements.

2023 ABL

On January 2, 2018, the Company entered into a $1.30 billion asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2023 ABL consists of revolving loans in both the United States (“2023 U.S. Revolver”) in the amount of $1.20 billion and Canada (“2023 Canada Revolver”) in the amount of $100.0 million. The 2023 ABL has a maturity date of January 2, 2023. The 2023 ABL has various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The current unused commitment fees on the 2023 ABL are 0.25% per annum.

There is one financial covenant under the 2023 ABL, which is a Consolidated Fixed Charge Ratio. The Consolidated Fixed Charge Ratio is calculated by dividing consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) by Consolidated Fixed Charges (both as defined in the agreement). Per the covenant, the Company’s Consolidated Fixed Charge Ratio has to be a minimum of 1.00 at the end of each fiscal quarter, calculated on a trailing four quarter basis.

The 2023 ABL is secured by a first priority lien over substantially all of the Company’s and each guarantor’s accounts, chattel paper, deposit accounts, books, records and inventory (as well as intangibles related thereto), subject to certain customary exceptions (the “ABL Priority Collateral”), and a second priority lien over substantially all of the Company’s and each guarantor’s other assets, including all of the equity interests of any subsidiary held by the Company or any guarantor, subject to certain customary exceptions (the “Term Priority Collateral”). The 2023 ABL is guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

As of June 30, 2018, the total balance outstanding on the 2023 ABL, net of $11.3 million of unamortized debt issuance costs,   was $482.5 million. The Company also has outstanding standby letters of credit related to the 2023 U.S. Revolver in the amount of $14.8 million as of June 30, 2018.

2025 Term Loan

On January 2, 2018, the Company entered into a $970.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2025 Term Loan requires quarterly principal payments in the amount of $2.4 million, with the remaining outstanding principal to be paid on its January 2, 2025 maturity date. The interest rate is based on a LIBOR rate (with a floor) plus a fixed spread. The Company has the option of selecting a LIBOR period that determines the rate at which interest can accrue on the Term Loan as well as the period in which interest payments are made.

The 2025 Term Loan is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The Term Loan is guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

As of June 30, 2018, the outstanding balance on the 2025 Term Loan, net of $36.2 million of unamortized debt issuance costs, was $931.3 million.

2025 Senior Notes

On October 25, 2017, Beacon Escrow Corporation, a wholly owned subsidiary of the Company (the “Escrow Issuer”), completed a private offering of $1.30 billion aggregate principal amount of 4.875% Senior Notes due 2025 at an issue price of 100%. The 2025 Senior Notes bear interest at a rate of 4.875% per annum, payable semi-annually in arrears, beginning May 1, 2018. The Company anticipates repaying the 2025 Senior Notes at the maturity date of November 1, 2025. Per the terms of the Escrow Agreement, the net proceeds from the 2025 Senior Notes remained in escrow until they were used to fund a portion of the purchase price of the Allied Acquisition payable at closing on January 2, 2018.  

Upon closing of the Allied Acquisition on January 2, 2018, (i) the Escrow Issuer merged with and into the Company, and the Company assumed all obligations under the 2025 Senior Notes; and (ii) all existing domestic subsidiaries of the Company (including the entities acquired in the Allied Acquisition) became guarantors of the 2025 Senior Notes.

As of June 30, 2018, the outstanding balance on the 2025 Senior Notes, net of $20.6 million of unamortized debt issuance costs, was $1.28 billion.

Financing - RSG Acquisition

In connection with the Roofing Supply Group (“RSG”) acquisition, the Company entered into various financing arrangements totaling $1.45 billion, including an asset-based revolving line of credit (“2020 ABL”) of $700.0 million ($350.0 million of which was drawn at closing) and a $450.0 million term loan (“2022 Term Loan”). The Company also raised an additional $300.0 million through the issuance of senior notes (the “2023 Senior Notes”).

The proceeds from these financing arrangements were used to provide working capital and funds for other general corporate purposes, to refinance or otherwise extinguish all third-party indebtedness for borrowed money under Company’s and RSG’s existing senior secured credit facilities and RSG’s unsecured senior notes due 2020, to finance the acquisition, and to pay fees and expenses associated with the RSG acquisition. The Company incurred debt issuance costs totaling approximately $31.3 million related to the 2020 ABL, 2022 Term Loan and 2023 Senior Notes.

2020 ABL

On October 1, 2015, the Company entered into a $700.0 million asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2020 ABL had an original maturity date of October 1, 2020 and consisted of revolving loans in both the United States (“2020 U.S. Revolver”) in the amount of $670.0 million and Canada (“Canada Revolver”) in the amount of $30.0 million. The 2020 ABL had various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The full balance of the 2020 ABL was paid on January 2, 2018 in conjunction with the Allied Acquisition.     

2022 Term Loan

On October 1, 2015, the Company entered into a $450.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2022 Term Loan required quarterly principal payments in the amount of $1.1 million, with the remaining outstanding principal to be paid on its original maturity date of October 1, 2022. The interest rate was based on a LIBOR rate (with a floor) plus a fixed spread. The Company had the option of selecting a LIBOR period that determined the rate at which interest would accrue, as well as the period in which interest payments are made. The full balance of the 2022 Term Loan was paid on January 2, 2018 in conjunction with the Allied Acquisition, including the write-off of $0.7 million in debt issuance costs.    

2023 Senior Notes

On October 1, 2015, the Company raised $300.0 million by issuing senior notes due 2023. The 2023 Senior Notes have a coupon rate of 6.38% per annum and are payable semi-annually in arrears, beginning April 1, 2016. There are early payment provisions in the indenture in which the Company would be subject to “make whole” provisions. The Company anticipates repaying the notes at the maturity date of October 1, 2023.

The 2023 Senior Notes are guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

As of June 30, 2018, the outstanding balance on the 2023 Senior Notes, net of $6.7 million of unamortized debt issuance costs, was $293.3 million.

Equipment Financing Facilities and Other

As of June 30, 2018, the Company had a $12.3 million outstanding under equipment financing facilities, with fixed interest rates ranging from 2.33% to 3.25% and payments due through September 2021.

As of June 30, 2018, the Company had $13.7 million of capital lease obligations outstanding. These leases have interest rates ranging from 2.72% to 10.39% with payments due through November 2021.

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Commitments and Contingencies

9 Months Ended

Jun. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Operating Leases

The Company mostly operates in leased facilities, which are accounted for as operating leases. The leases typically provide for a base rent plus real estate taxes. Certain of the leases provide for escalating rents over the lives of the leases and rent expense is recognized over the terms of those leases on a straight-line basis.

At June 30, 2018, the minimum rental commitments under all non-cancelable operating leases with initial or remaining terms of more than one year were as follows (in thousands):

Year Ending September 30,
2018 (July - Sept)	$	25,318
2019		98,378
2020		85,759
2021		74,622
2022		55,115
Thereafter		128,317
Total minimum lease payments	$	467,509

For the three months ended June 30, 2018 and 2017, rent expense was $27.7 million and $15.8 million, respectively. For the nine months ended June 30, 2018 and 2017, rent expense was $71.4 million and $44.7 million, respectively. Sublet income was immaterial for each of these periods.

Contingencies

The Company is subject to loss contingencies pursuant to various federal, state and local environmental laws and regulations; however, the Company is not aware of any reasonably possible losses that would have a material impact on its results of operations, financial position, or liquidity. Potential loss contingencies include possible obligations to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical or other substances by the Company or by other parties. In connection with its acquisitions, the Company’s practice is to request indemnification for any and all known material liabilities of significance as of the respective dates of acquisition. Historically, environmental liabilities have not had a material impact on the Company’s results of operations, financial position or liquidity.

The Company is subject to litigation from time to time in the ordinary course of business; however the Company does not expect the results, if any, to have a material adverse impact on its results of operations, financial position or liquidity.

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Geographic Data

9 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Geographic Data

10. Geographic Data

The following tables summarize certain geographic information for the periods presented (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Net sales
U.S.	$	1,883,249	$	1,167,647	$	4,364,128	$	2,977,108
Canada		51,702		46,247		118,427		109,694
Total net sales	$	1,934,951	$	1,213,894	$	4,482,555	$	3,086,802

	June 30,		September 30,		June 30,
	2018		2017		2017
Long-lived assets
U.S.	$	1,455,771	$	507,236	$	515,170
Canada		12,403		13,446		13,204
Total long-lived assets	$	1,468,174	$	520,682	$	528,374

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Fair Value Measurement

9 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

11. Fair Value Measurement

As of June 30, 2018, the carrying amount of cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents at amortized cost, which approximates fair value based upon quoted market prices (Level 1).

As of June 30, 2018, based upon recent trading prices (Level 2 — market approach), the fair value of the Company’s $300.0 million Senior Notes due in 2023 was $311.0 million and the fair value of the $1.30 billion Senior Notes due 2025 was $1.20 billion.

As of June 30, 2018, the fair value of the Company’s term loan and revolving asset-based line of credit approximated the amount outstanding. The Company estimates the fair value of its Senior Secured Credit Facility by discounting the future cash flows of each instrument using estimated market rates of debt instruments with similar maturities and credit profiles (Level 3).

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Income Taxes

9 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

On December 22, 2017, the U.S. federal government officially signed into law the Tax Cut and Jobs Act of 2017 (“TCJA”). ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions is for tax years beginning after December 31, 2017, or in the case of certain other provisions, January 1, 2018. Though certain key aspects of the new law are effective January 1, 2018 and have an immediate accounting effect, other significant provisions are not effective or may not result in accounting effects for September 30 fiscal year-end companies until October 1, 2018.

Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. Per SAB 118, the measurement period is deemed to have an earlier end date when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the updated tax law are expected to be recorded at the time a reasonable estimate for all, or a portion, of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.

SAB 118 states, that at each reporting period, companies must disclose the effects of the TCJA for areas where accounting is complete, disclose provisional amounts (or adjustments to provisional amounts) for the effects of the TCJA areas where accounting is not complete but a reasonable estimate has been determined, and confirm areas where a reasonable estimate of the effects cannot yet be made, and therefore taxes are reflected in accordance with law prior to the enactment of the TCJA.

As of June 30, 2018, the Company was able to make the following reasonable estimates on the impact of the corporate taxation changes from the TCJA:

• The Company has a blended federal corporate income tax rate for fiscal year 2018 of 24.5%. This transitional tax rate stems from Section 15 of the Internal Revenue Code that states if the tax rate changes in during a tax year, the tax rate for the full year is calculated using the prior and revised tax rates on a proportional basis using the number of days under each legislated rate. For 2019, the Company will have a federal corporate income tax rate of 21%.

• The Company initially remeasured all its deferred tax assets and liabilities based on the revised corporate income tax rate (21%). Due to the Company’s status as a non-calendar year-end filer, it was required to perform additional analysis to distinguish those deferred taxes that will be realized during fiscal year 2018 at the blended federal corporate income tax rate of 24.5% from those that will be realized in future years at the revised rate.  As a result, the Company recognized a provisional decrease of its deferred tax liabilities and related income tax benefit of $1.2 million and $50.1 million in its consolidated statement of operations for the three and nine months ended June 30, 2018, respectively. The Company will continue to refine its deferred tax remeasurement calculation and assess the related impact, which potentially could result in additional adjustments.

• The Company estimated the impact of the mandatory repatriation transition tax on the net accumulated earnings and profits of the Company’s foreign subsidiary, Beacon Roofing Supply Canada Company (“BRSCC”). As a result, the Company recognized a provisional expense of $0.9 million for the one-time transition tax liability in its consolidated statement of operations during the first quarter of fiscal year 2018. The Company has not yet finalized its calculation of the repatriation transition tax, as it continues to analyze of the amount of BRSCC earnings held in cash and other specified assets that had been previously deferred from U.S. federal taxation.

State conformity to the TCJA law changes has not been communicated by the state and local jurisdictions at this time; therefore, the Company has not made any provisional adjustments related to the potential impact in its financial statements. The Company will continue to account for items where a reasonable estimate of the impact could not be assessed as of June 30, 2018 under the guidance that was in effect immediately prior to the enactment of the TCJA, ASC 740, Accounting for Income Taxes.  

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Supplemental Guarantor Information

9 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Supplemental Guarantor Information

13. Supplemental Guarantor Information

The 2023 Senior Notes and 2025 Senior Notes are guaranteed jointly and severally by all of the United States subsidiaries of the Company (collectively, the “Guarantors”), and not by the Canadian subsidiaries of the Company. Such guarantees are full and unconditional. Supplemental condensed consolidating financial information of the Company, including such information for the Guarantors, is presented below. The information is presented in accordance with the requirements of Rule 3-10 under the SEC’s Regulation S-X. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the non-guarantor subsidiaries operated as independent entities. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups.

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	June 30, 2018
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	50,563	$	3,698	$	(26,710	)	$	27,551
Accounts receivable, net		-		1,046,751		32,277		(1,140	)		1,077,888
Inventories, net		-		1,132,228		33,161		-			1,165,389
Prepaid expenses and other current assets		44,662		286,478		6,449		-			337,589
Total current assets		44,662		2,516,020		75,585		(27,850	)		2,608,417
Intercompany receivable, net		-		1,290,785		-		(1,290,785	)		-
Investments in consolidated subsidiaries		5,981,419		-		-		(5,981,419	)		-
Deferred income taxes, net		19,702		-		-		(19,702	)		-
Property and equipment, net		14,046		264,610		10,052		-			288,708
Goodwill		-		2,291,635		29,545		-			2,321,180
Intangibles, net		-		1,368,653		2,352		-			1,371,005
Other assets, net		1,242		269		-		-			1,511
Total Assets	$	6,061,071	$	7,731,972	$	117,534	$	(7,319,756	)	$	6,590,821
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	42,884	$	688,336	$	16,316	$	(27,850	)	$	719,686
Accrued expenses		24,416		490,987		5,549		-			520,952
Current portions of long-term debt		9,700		10,014		-		-			19,714
Total current liabilities		77,000		1,189,337		21,865		(27,850	)		1,260,352
Intercompany payable, net		1,251,503		-		39,282		(1,290,785	)		-
Borrowings under revolving lines of credit, net		-		471,857		10,632		-			482,489
Long-term debt, net		2,494,308		-		-		-			2,494,308
Deferred income taxes, net		-		113,454		176		(19,702	)		93,928
Long-term obligations under equipment financing and other, net		-		15,979		-		-			15,979
Other long-term liabilities		814		5,428		77		-			6,319
Total liabilities		3,823,625		1,796,055		72,032		(1,338,337	)		4,353,375
Convertible preferred stock		399,195		-		-		-			399,195
Total stockholders' equity		1,838,251		5,935,917		45,502		(5,981,419	)		1,838,251
Total Liabilities and Stockholders' Equity	$	6,061,071	$	7,731,972	$	117,534	$	(7,319,756	)	$	6,590,821

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	September 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	149,799	$	1,582	$	(13,131	)	$	138,250
Accounts receivable, net		-		663,034		42,633		(1,140	)		704,527
Inventories, net		-		527,226		24,698		-			551,924
Prepaid expenses and other current assets		4,195		198,817		6,126		-			209,138
Total current assets		4,195		1,538,876		75,039		(14,271	)		1,603,839
Intercompany receivable, net		-		655,372		-		(655,372	)		-
Investments in consolidated subsidiaries		3,160,273		-		-		(3,160,273	)		-
Deferred income taxes, net		30,822		-		-		(30,822	)		-
Property and equipment, net		6,610		138,955		10,564		-			156,129
Goodwill		-		1,220,812		31,174		-			1,251,986
Intangibles, net		-		426,187		2,882		-			429,069
Other assets, net		2,912		5,622		-		-			8,534
Total Assets	$	3,204,812	$	3,985,824	$	119,659	$	(3,860,738	)	$	3,449,557
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	27,174	$	468,891	$	21,903	$	(14,271	)	$	503,697
Accrued expenses		51,183		204,173		5,941		-			261,297
Current portions of long-term obligations		4,500		9,641		-		-			14,141
Total current liabilities		82,857		682,705		27,844		(14,271	)		779,135
Intercompany payable, net		618,881		-		36,491		(655,372	)		-
Borrowings under revolving lines of credit, net		-		-		3,205		-			3,205
Long-term debt, net		721,268		-		-		-			721,268
Deferred income taxes, net		-		168,209		996		(30,822	)		138,383
Long-term obligations under equipment financing and other, net		-		23,147		66		-			23,213
Other long-term liabilities				2,547		-		-			2,547
Total liabilities		1,423,006		876,608		68,602		(700,465	)		1,667,751
Total stockholders' equity		1,781,806		3,109,216		51,057		(3,160,273	)		1,781,806
Total Liabilities and Stockholders' Equity	$	3,204,812	$	3,985,824	$	119,659	$	(3,860,738	)	$	3,449,557

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	June 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	34,583	$	7,314	$	(8,842	)	$	33,055
Accounts receivable, net		1,327		640,796		29,994		(1,140	)		670,977
Inventories, net		-		608,367		33,058		-			641,425
Prepaid expenses and other current assets		30,158		185,633		5,686		-			221,477
Total current assets		31,485		1,469,379		76,052		(9,982	)		1,566,934
Intercompany receivable, net		-		1,037,846		-		(1,037,846	)		-
Investments in consolidated subsidiaries		3,070,328		-		-		(3,070,328	)		-
Deferred income taxes, net		58,230		-		-		(58,230	)		-
Property and equipment, net		6,541		140,126		10,284		-			156,951
Goodwill		-		1,226,034		29,980		-			1,256,014
Intangibles, net		-		440,042		2,920		-			442,962
Other assets, net		1,242		269		-		-			1,511
Total Assets	$	3,167,826	$	4,313,696	$	119,236	$	(4,176,386	)	$	3,424,372
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	23,839	$	354,696	$	19,026	$	(9,982	)	$	387,579
Accrued expenses		18,174		257,387		4,754		-			280,315
Current portions of long-term obligations		4,500		9,262		-		-			13,762
Total current liabilities		46,513		621,345		23,780		(9,982	)		681,656
Intercompany payable, net		998,740		-		39,106		(1,037,846	)		-
Borrowings under revolving lines of credit		-		437,285		12,330		-			449,615
Long-term debt, net		721,685		-		-		-			721,685
Deferred income taxes, net		-		199,746		600		(58,230	)		142,116
Long-term obligations under equipment financing and other, net		-		25,978		47		-			26,025
Other long-term liabilities		-		2,387		-		-			2,387
Total liabilities		1,766,938		1,286,741		75,863		(1,106,058	)		2,023,484
Total stockholders' equity		1,400,888		3,026,955		43,373		(3,070,328	)		1,400,888
Total Liabilities and Stockholders' Equity	$	3,167,826	$	4,313,696	$	119,236	$	(4,176,386	)	$	3,424,372

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Operations

(Unaudited; In thousands)

	Three Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net sales	$	-		$	1,883,249	$	51,702	$	-		$	1,934,951
Cost of products sold		-			1,401,045		40,012		-			1,441,057
Gross profit		-			482,204		11,690		-			493,894
Operating expense:
Selling, general and administrative		1,776			313,034		8,384		-			323,194
Depreciation		411			14,967		433		-			15,811
Amortization		-			49,947		129		-			50,076
Total operating expense		2,187			377,948		8,946		-			389,081
Intercompany charges (income)		(7,521	)		7,521		-		-			-
Income (loss) from operations		5,334			96,735		2,744		-			104,813
Interest expense, financing costs, and other		33,416			3,594		338		-			37,348
Intercompany interest expense (income)		(6,809	)		6,427		382		-			-
Income (loss) before provision for income taxes		(21,273	)		86,714		2,024		-			67,465
Provision for (benefit from) income taxes		(6,848	)		24,356		582		-			18,090
Income (loss) before equity in net income of subsidiaries		(14,425	)		62,358		1,442		-			49,375
Equity in net income of subsidiaries		63,800			-		-		(63,800	)		-
Net income (loss)	$	49,375		$	62,358	$	1,442	$	(63,800	)	$	49,375

	Three Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net sales	$	-		$	1,167,647	$	46,247	$	-		$	1,213,894
Cost of products sold		-			880,325		35,815		-			916,140
Gross profit		-			287,322		10,432		-			297,754
Operating expense:
Selling, general and administrative		72			176,094		7,434		-			183,600
Depreciation		335			7,823		421		-			8,579
Amortization		-			20,561		143		-			20,704
Total operating expense		407			204,478		7,998		-			212,883
Intercompany charges (income)		(12,549	)		11,987		562		-			-
Income (loss) from operations		12,142			70,857		1,872		-			84,871
Interest expense, financing costs, and other		9,610			3,586		201		-			13,397
Intercompany interest expense (income)		(6,724	)		6,724		-		-			-
Income (loss) before provision for income taxes		9,256			60,547		1,671		-			71,474
Provision for (benefit from) income taxes		3,473			22,883		459		-			26,815
Income (loss) before equity in net income of subsidiaries		5,783			37,664		1,212		-			44,659
Equity in net income of subsidiaries		38,876			-		-		(38,876	)		-
Net income (loss)	$	44,659		$	37,664	$	1,212	$	(38,876	)	$	44,659

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Operations

(Unaudited; In thousands)

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net sales	$	-		$	4,364,128		$	118,427		$	-		$	4,482,555
Cost of products sold		-			3,288,086			92,445			-			3,380,531
Gross profit		-			1,076,042			25,982			-			1,102,024
Operating expense:
Selling, general and administrative		4,315			828,987			25,232			-			858,534
Depreciation		1,310			39,015			1,315			-			41,640
Amortization		-			104,946			393			-			105,339
Total operating expense		5,625			972,948			26,940			-			1,005,513
Intercompany charges (income)		(8,105	)		8,105			-			-			-
Income (loss) from operations		2,480			94,989			(958	)		-			96,511
Interest expense, financing costs, and other		90,712			8,226			548			-			99,486
Intercompany interest expense (income)		(17,698	)		16,552			1,146			-			-
Income (loss) before provision for income taxes		(70,534	)		70,211			(2,652	)		-			(2,975	)
Provision for (benefit from) income taxes		(11,796	)		(40,891	)		(604	)		-			(53,291	)
Income (loss) before equity in net income of subsidiaries		(58,738	)		111,102			(2,048	)		-			50,316
Equity in net income of subsidiaries		109,054			-			-			(109,054	)		-
Net income (loss)	$	50,316		$	111,102		$	(2,048	)	$	(109,054	)	$	50,316

	Nine Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net sales	$	-		$	2,977,108	$	109,694		$	-		$	3,086,802
Cost of products sold		-			2,248,454		85,050			-			2,333,504
Gross profit		-			728,654		24,644			-			753,298
Operating expense:
Selling, general and administrative		15,006			501,503		21,779			-			538,288
Depreciation		1,057			22,812		1,253			-			25,122
Amortization		-			60,684		432			-			61,116
Total operating expense		16,063			584,999		23,464			-			624,526
Intercompany charges (income)		(37,057	)		35,379		1,678			-			-
Income (loss) from operations		20,994			108,276		(498	)		-			128,772
Interest expense, financing costs, and other		28,947			9,044		1,248			-			39,239
Intercompany interest expense (income)		(17,406	)		17,406		-			-			-
Income (loss) before provision for income taxes		9,453			81,826		(1,746	)		-			89,533
Provision for (benefit from) income taxes		3,063			31,217		(480	)		-			33,800
Income (loss) before equity in net income of subsidiaries		6,390			50,609		(1,266	)		-			55,733
Equity in net income of subsidiaries		49,343			-		-			(49,343	)		-
Net income (loss)	$	55,733		$	50,609	$	(1,266	)	$	(49,343	)	$	55,733

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Comprehensive Income

(Unaudited; In thousands)

	Three Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	49,375		$	62,358	$	1,442		$	(63,800	)	$	49,375
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,535	)		-		(1,535	)		1,535			(1,535	)
Total other comprehensive income (loss)		(1,535	)		-		(1,535	)		1,535			(1,535	)
Comprehensive income (loss)	$	47,840		$	62,358	$	(93	)	$	(62,265	)	$	47,840

	Three Months Ended June 30, 2017
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net income (loss)	$	44,659	$	37,664	$	1,212	$	(38,876	)	$	44,659
Other comprehensive income (loss):
Foreign currency translation adjustment		1,730		-		1,730		(1,730	)		1,730
Total other comprehensive income (loss)		1,730		-		1,730		(1,730	)		1,730
Comprehensive income (loss)	$	46,389	$	37,664	$	2,942	$	(40,606	)	$	46,389

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	50,316		$	111,102	$	(2,048	)	$	(109,054	)	$	50,316
Other comprehensive income (loss):
Foreign currency translation adjustment		(3,506	)		-		(3,506	)		3,506			(3,506	)
Total other comprehensive income (loss)		(3,506	)		-		(3,506	)		3,506			(3,506	)
Comprehensive income (loss)	$	46,810		$	111,102	$	(5,554	)	$	(105,548	)	$	46,810

	Nine Months Ended June 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	55,733	$	50,609	$	(1,266	)	$	(49,343	)	$	55,733
Other comprehensive income (loss):
Foreign currency translation adjustment		891		-		891			(891	)		891
Total other comprehensive income (loss)		891		-		891			(891	)		891
Comprehensive income (loss)	$	56,624	$	50,609	$	(375	)	$	(50,234	)	$	56,624

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Cash Flows

(Unaudited; In thousands)

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net cash provided by (used in) operating activities	$	(68,803	)	$	93,178		$	(8,308	)	$	(17,086	)	$	(1,019	)
Investing Activities
Purchases of property and equipment		(8,721	)		(24,901	)		(1,356	)		-			(34,978	)
Acquisition of businesses, net		(2,715,429	)		-			-			-			(2,715,429	)
Proceeds from the sale of assets		-			724			26			-			750
Intercompany activity		628,948			-			-			(628,948	)		-
Net cash provided by (used in) investing activities		(2,095,202	)		(24,177	)		(1,330	)		(628,948	)		(2,749,657	)
Financing Activities
Borrowings under revolving lines of credit		-			2,082,972			39,977			-			2,122,949
Repayments under revolving lines of credit		-			(1,599,839	)		(32,139	)		-			(1,631,978	)
Borrowings under term loan		970,000			-			-			-			970,000
Repayments under term loan		(443,425	)		-			-			-			(443,425	)
Repayments under equipment financing facilities and other		-			(8,604	)		-			-			(8,604	)
Borrowings under senior notes		1,300,000			-			-			-			1,300,000
Payment of debt issuance costs		(58,266	)		(7,522	)		-			-			(65,788	)
Proceeds from issuance of convertible preferred stock		400,000			-			-			-			400,000
Payment of stock issuance costs		(1,279	)		-			-			-			(1,279	)
Payment of dividends on preferred stock		(6,000	)		-			-			-			(6,000	)
Proceeds from issuance of common stock related to equity awards		6,950			-			-			-			6,950
Taxes paid related to net share settlement of equity awards		(3,975	)		-			-			-			(3,975	)
Intercompany activity		-			(635,244	)		2,789			632,455			-
Net cash provided by (used in) financing activities		2,164,005			(168,237	)		10,627			632,455			2,638,850
Effect of exchange rate changes on cash and cash equivalents		-			-			1,127			-			1,127
Net increase (decrease) in cash and cash equivalents		-			(99,236	)		2,116			(13,579	)		(110,699	)
Cash and cash equivalents, beginning of period		-			149,799			1,582			(13,131	)		138,250
Cash and cash equivalents, end of period	$	-		$	50,563		$	3,698		$	(26,710	)	$	27,551

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Cash Flows

(Unaudited; In thousands)

	Nine Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net cash provided by (used in) operating activities	$	(33,267	)	$	108,649		$	(2,064	)	$	855		$	74,173
Investing Activities
Purchases of property and equipment		(2,972	)		(27,522	)		(1,388	)		-			(31,882	)
Acquisition of businesses		(128,533	)		-			-			-			(128,533	)
Proceeds from the sale of assets		-			1,828			11			-			1,839
Intercompany activity		159,325			-			-			(159,325	)		-
Net cash provided by (used in) investing activities		27,820			(25,694	)		(1,377	)		(159,325	)		(158,576	)
Financing Activities
Borrowings under revolving lines of credit		-			1,705,434			16,493			-			1,721,927
Repayments under revolving lines of credit		-			(1,624,574	)		(8,996	)		-			(1,633,570	)
Repayments under term loan		(3,375	)		-			-			-			(3,375	)
Repayments under equipment financing facilities and other		-			(7,780	)		-			-			(7,780	)
Proceeds from issuance of common stock		9,994			-			-			-			9,994
Taxes paid related to net share settlement of equity awards		(1,172	)		-			-			-			(1,172	)
Intercompany activity		-			(158,899	)		334			158,565			-
Net cash provided by (used in) financing activities		5,447			(85,819	)		7,831			158,565			86,024
Effect of exchange rate changes on cash and cash equivalents		-			-			48			-			48
Net increase (decrease) in cash and cash equivalents		-			(2,864	)		4,438			95			1,669
Cash and cash equivalents, beginning of period		-			37,447			2,876			(8,937	)		31,386
Cash and cash equivalents, end of period	$	-		$	34,583		$	7,314		$	(8,842	)	$	33,055

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Subsequent Events

9 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

On July 16, 2018, the Company acquired Atlas Supply, Inc., the Pacific Northwest’s leading distributor of sealants, coatings, adhesives and related waterproofing products, with six branches operating in Seattle, Tacoma, Spokane, and Mountlake Terrace in Washington, as well as locations in Portland, Oregon and Boise, Idaho, and annual sales of approximately $37 million.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Beacon Roofing Supply, Inc. (the “Company”) prepared the condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the requirements of the Securities and Exchange Commission (“SEC”). As permitted under those rules, certain footnotes or other financial information have been condensed or omitted. Certain prior period amounts have been reclassified to conform to current period presentation. The balance sheet as of June 30, 2017 has been presented for a better understanding of the impact of seasonal fluctuations on the Company’s financial condition.

In management’s opinion, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and nine months ended June 30, 2018 are not necessarily indicative of the results to be expected for the twelve months ending September 30, 2018 (“fiscal year 2018” or “2018”).

The three-month periods ended June 30, 2018 and 2017 each had 64 business days and the nine-month periods ended June 30, 2018 and 2017 each had 189 business days, respectively.

These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in the Company’s fiscal year 2017 (“2017”) Annual Report on Form 10-K for the year ended September 30, 2017.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Significant items subject to such estimates include inventories, purchase price allocations, recoverability of goodwill and intangibles, and income taxes. Actual amounts could differ from those estimates.

Recent Accounting Pronouncements - Adopted and Not Yet Adopted

Recent Accounting Pronouncements—Adopted

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” This guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The provisions of this standard were effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2016, and early adoption was permitted. The Company adopted this guidance effective October 1, 2017. As a result, the Company now records excess tax benefits (or deficiencies) as income tax benefits (or expenses) in our consolidated statements of operations rather than as additional paid-in-capital in its consolidated balance sheets. ASU 2016-09 allowed for this guidance to be applied prospectively or retrospectively.  The Company elected to apply this guidance prospectively, and recognized $0.1 million and $3.0 million of excess tax benefits in our consolidated statement of operations related to equity award transactions executed in the period for the three and nine months ended June 30, 2018. To align with the prospective treatment in our consolidated statements of operations, the Company now classifies excess tax benefits (or deficiencies) along with accrued income taxes in operating activities within our consolidated statements of cash flows. The Company elected to retain its historical approach to accounting for forfeitures and statutory tax withholding requirements, therefore these specific aspects of the new guidance had no impact on its financial statements and related disclosures.

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash.” This guidance standardizes the presentation of changes to restricted cash on the statement of cash flows by requiring that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amount generally described as restricted cash or restricted cash equivalents. The provisions of this standard are effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company adopted this guidance effective October 1, 2017 and applied it retrospectively, and the standard did not have a material impact on the Company’s financial statement and related disclosures.

Recent Accounting Pronouncements—Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, and will replace most existing revenue recognition guidance when it becomes effective. The new standard is effective for public business entities for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted for annual reporting periods beginning after December 15, 2016. The standard permits the use of either the full retrospective or modified retrospective adoption methods. The Company is continuing to perform a detailed evaluation, using a five-step model specified in the guidance, to assess the impacts of the new standard on our legacy and newly acquired businesses, and expects to apply the guidance using the modified retrospective method. Based on the Company’s knowledge of its revenue transactions, the Company does not expect the adoption of this new guidance to have a material impact on its financial statements, but does expect that it will result in additional revenue recognition disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases.” This guidance will replace most existing accounting for lease guidance when it becomes effective. This new standard is effective using the modified retrospective approach for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2018, and early adoption is permitted. In July 2018, the FASB amended the new lease standard which, among other changes, allows a company to elect to adopt ASU 2016-02 using a transition option whereby a cumulative effect adjustment is recorded to the opening balance of its retained earnings on the adoption date. The guidance will require the Company to record a right of use asset and a lease liability for most of the Company’s leases, including those currently treated as operating leases. The Company is in the process of evaluating the impact of the standard and has decided that it will use the practical expedients outlined in the transition guidance. The scope of the overall impact on the Company’s financial statements and related disclosures is still being quantified.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impact that this guidance may have on its financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business.” This guidance is intended to assist entities when evaluating when a set of transferred assets and activities constitutes a business. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Accounting for Goodwill Impairment.” This guidance is intended to introduce a simplified approach to measurement of goodwill impairment, eliminating the need for a hypothetical purchase price allocation and instead measuring impairment by the amount a reporting unit’s carrying value exceeds its fair value. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In May 2017, the FASB issued ASU 2017-09, “Scope of Modification Accounting.” This guidance is intended to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income.” This guidance is intended to address the accounting treatment for the tax effects on items within accumulated other comprehensive income as a result of the adoption of the Tax Cuts and Jobs Act of 2017 (see Note 12 for further discussion). This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2018, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

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Acquisitions (Tables)

9 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The Company has recorded purchase accounting entries on a preliminary basis for the Allied Acquisition, detailed as follows (in thousands):

	January 2, 2018						January 2, 2018
	(as reported at March 31, 2018)			Adjustments			(as adjusted at June 30, 2018)
Cash	$	19,322		$	(19,153	)	$	169
Accounts receivable		315,485			7,477			322,962
Inventory		322,705			(8,047	)		314,658
Prepaid and other current assets		59,279			15,865			75,144
Property, plant, and equipment		139,528			(168	)		139,360
Goodwill		1,130,635			(61,137	)		1,069,498
Intangible assets		1,037,000			10,000			1,047,000
Current liabilities		(271,252	)		18,204			(253,048	)
Non-current liabilities		(6,820	)		4,175			(2,645	)
Total purchase price	$	2,745,882		$	(32,784	)	$	2,713,098

Business Acquisition, Pro Forma Information

The following table represents the unaudited pro forma consolidated net sales and net income (loss) for the Company for the periods indicated (in thousands):

	Nine Months Ended June 30, 2018		Nine Months Ended June 30, 2017
	(unaudited)
Net sales	$	5,148,204	$	4,958,292
Net income (loss)		11,394		15,654

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Net Income (Loss) Per Share (Tables)

9 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Components and Calculation of Basic and Diluted Net Income (Loss) Per Share

The following table presents the components and calculations of basic and diluted net income (loss) per share for each period presented (in thousands, except share and per share amounts):

	Three Months Ended June 30,					Nine Months Ended June 30,
	2018			2017		2018			2017
Net income (loss)	$	49,375		$	44,659	$	50,316		$	55,733
Dividends on preferred shares		(6,000	)		-		(12,000	)		-
Net income (loss) attributable to common shareholders	$	43,375		$	44,659	$	38,316		$	55,733
Undistributed income allocated to participating securities		(5,406	)		-		(3,293	)		-
Net income (loss) attributable to common shareholders - basic and diluted	$	37,969		$	44,659	$	35,023		$	55,733
Weighted-average common shares outstanding - basic		68,086,387			60,311,923		67,976,980			60,131,546
Effect of common share equivalents		1,061,756			1,038,920		1,263,060			1,032,045
Weighted-average common shares outstanding - diluted		69,148,143			61,350,843		69,240,040			61,163,591
Net income (loss) per share - basic	$	0.56		$	0.74	$	0.52		$	0.93
Net income (loss) per share - diluted	$	0.55		$	0.73	$	0.51		$	0.91

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table includes the number of shares that may be dilutive common shares in the future. These shares were not included in the computation of diluted net income (loss) per share because the effect was either anti-dilutive or the requisite performance conditions were not met:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Stock options		484,358		247,102		349,281		359,757
Restricted stock units		355,891		-		148,638		82,520
Preferred Stock		9,694,619		-		6,392,056		-

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Stockholders' Equity (Tables)

9 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of Stockholders Equity

The following table presents the activity included in stockholders’ equity during the nine months ended June 30, 2018 (in thousands, except share amounts):

											Accumulated
	Common Stock				Additional Paid-in			Retained			Other Comprehensive			Total Stockholders'
	Shares		Amount		Capital			Earnings			Loss			Equity
Balance at September 30, 2017		67,700,858	$	677	$	1,047,506		$	748,186		$	(14,563	)	$	1,781,806
Issuance of common stock, net of shares withheld for taxes		404,255		4		2,972			-			-			2,976
Issuance costs related to secondary offering of common stock		-		-		(474	)		-			-			(474	)
Stock-based compensation		-		-		13,133			-			-			13,133
Other comprehensive income (loss)		-		-		-			-			(3,506	)		(3,506	)
Net income (loss)		-		-		-			50,316			-			50,316
Dividends on preferred shares1		-		-		-			(6,000	)		-			(6,000	)
Balance at June 30, 2018		68,105,113	$	681	$	1,063,137		$	792,502		$	(18,069	)	$	1,838,251

________________________________

¹ Amount represents only dividends that have been declared as of June 30, 2018.

Reclassification out of Accumulated Other Comprehensive Income

The following table summarizes the components of and changes in accumulated other comprehensive loss (in thousands):

	Foreign Currency Translation			Accumulated Other Comprehensive Loss
Balance as of September 30, 2017	$	(14,563	)	$	(14,563	)
Other comprehensive income before reclassifications		(3,506	)		(3,506	)
Reclassifications out of other comprehensive loss		-			-
Balance as of June 30, 2018	$	(18,069	)	$	(18,069	)

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Stock-based Compensation (Tables)

9 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Fair Values of Options, Black-Scholes Option-Pricing Model, Weighted-Average Assumptions

The fair values of the options granted during the nine months ended June 30, 2018 were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Risk-free interest rate		2.10	%
Expected volatility		26.43	%
Expected life (in years)		5.46
Dividend yield	-

Stock Options Outstanding and Activity During the Period

The following table summarizes all stock option activity for the nine months ended June 30, 2018 (in thousands, except share, per share, and time period amounts):

	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value1
Balance as of September 30, 2017		2,084,228		$	28.84		6.1	$	46,714
Granted		276,370			55.17
Exercised		(277,589	)		25.04
Canceled/Forfeited		(54,669	)		40.15
Expired		(1,991	)		15.28
Balance as of June 30, 2018		2,026,349		$	32.66		5.9	$	24,544
Vested and expected to vest after June 30, 2018		2,008,997		$	32.52		5.9	$	24,497
Exercisable as of June 30, 2018		1,470,856		$	27.30		4.9	$	22,871

________________________________

¹ Aggregate intrinsic value as represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.

Stock Option Grants, Vesting, and Exercises

The following table summarizes additional information on stock options for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,
	2018		2017
Weighted-average fair value of stock options granted	$	15.86	$	14.21
Total grant date fair value of stock options vested		4,172		5,504
Total intrinsic value of stock options exercised		8,995		9,617

Restricted Shares and Units Outstanding and Activity During the Period

The following table summarizes all restricted stock unit activity for the nine months ended June 30, 2018:

	RSUs Outstanding			Weighted- Average Grant Date Fair Value
Balance at September 30, 2017		770,973		$	38.95
Granted		370,190			57.40
Performance awards1		41,440			39.56
Released		(191,703	)		31.91
Canceled/Forfeited		(43,082	)		48.84
Balance at June 30, 2018		947,818		$	47.16
Vested and expected to vest after June 30, 20182		961,213		$	47.22

_________________________________

¹ Additional restricted stock units outstanding as a result of the satisfaction of a performance vesting condition prior to the ascribed time-based vesting condition (release date).

² Amount of restricted stock units vested and expected to vest is larger than the balance outstanding at period end due to the impact of certain restricted stock unit awards with performance vesting condition estimates that are greater than 100% as of June 30, 2018.

Schedule Of Restricted Stock Units Additional Information

The following table summarizes additional information on RSUs for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,
	2018		2017
Weighted-average fair value of RSUs granted	$	57.40	$	47.31
Total grant date fair value of RSUs vested		6,656		4,552
Total intrinsic value of RSUs released		11,041		5,620

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Jun. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in goodwill

The following table sets forth the change in the carrying amount of goodwill during the nine months ended June 30, 2018 and 2017, respectively (in thousands):

Balance at September 30, 2016	$	1,197,565
Acquisitions		58,234
Translation and other adjustments		215
Balance at June 30, 2017	$	1,256,014
Balance at September 30, 2017	$	1,251,986
Acquisitions		1,070,823
Translation and other adjustments		(1,629	)
Balance at June 30, 2018	$	2,321,180

Summary of Intangible Assets

The following table summarizes intangible assets by category (in thousands, except time period amounts):

	June 30, 2018			September 30, 2017			June 30, 2017			Weighted- Average Remaining Life1 (Years)
Amortizable intangible assets:
Non-compete agreements	$	2,824		$	2,824		$	2,824			2.73
Customer relationships		1,530,434			610,026			605,326			18.85
Trademarks		10,500			10,500			7,650			7.78
Beneficial lease arrangements		7,644			1,060			960			4.94
Total amortizable intangible assets		1,551,402			624,410			616,760
Accumulated amortization		(373,447	)		(268,391	)		(246,848	)
Total amortizable intangible assets, net	$	1,177,955		$	356,019		$	369,912
Indefinite lived trademarks		193,050			73,050			73,050
Total intangibles, net	$	1,371,005		$	429,069		$	442,962

_________________________________

¹ As of June 30, 2018

Summary of Estimated Future Amortization

The following table summarizes the estimated future amortization expense for intangible assets (in thousands):

Year Ending September 30,
2018 (July - Sept)	$	25,010
2019		189,302
2020		182,398
2021		153,513
2022		125,948
Thereafter		501,784
	$	1,177,955

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Financing Arrangements (Tables)

9 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following table summarizes all financing arrangements from the respective periods presented (in thousands):

	June 30,			September 30,			June 30,
	2018			2017			2017
Revolving Lines of Credit:
2020 ABL
U.S. Revolver, expires October 1, 2020 1	$	-		$	-		$	437,285
Canada Revolver, expires October 1, 20202		-			3,205			12,330
2023 ABL
U.S. Revolver, expires January 2, 20233		471,857			-			-
Canada Revolver, expires January 2, 20234		10,632			-			-
Less: current portion		-			-			-
Borrowings under revolving lines of credit, net	$	482,489		$	3,205		$	449,615
Term Loans:
Term Loan, matures October 1, 20225	$	-		$	433,440		$	434,177
Term Loan, matures January 2, 20256		931,332			-			-
Less: current portion		(9,700	)		(4,500	)		(4,500	)
Total long-term borrowings under term loans	$	921,632		$	428,940		$	429,677
Senior Notes:
Senior Notes, mature October 20237		293,287			292,328			292,008
Senior Notes, mature November 20258		1,279,389			-			-
Less: current portion		-			-			-
Total long-term borrowings under Senior Notes	$	1,572,676		$	292,328		$	292,008
Long-term debt, net	$	2,494,308		$	721,268		$	721,685
Equipment Financing Facilities and Other:
Equipment financing facilities, various maturities through September 20219	$	12,288		$	12,898		$	14,314
Capital lease obligations, various maturities through November 202110		13,705			19,956			20,973
Total obligations under equipment financing facilities and other		25,993			32,854			35,287
Less: current portion		(10,014	)		(9,641	)		(9,262	)
Long-term obligations under equipment financing and other, net	$	15,979		$	23,213		$	26,025

________________________________ 

¹ Extinguished on January 2, 2018; Effective rate on borrowings of 3.28% as of June 30, 2017

² Extinguished on January 2, 2018; Effective rate on borrowings of 3.70% as of September 30, 2017 and 3.20% as of June 30, 2017

³ Effective rate on borrowings of 3.78% as of June 30, 2018

⁴ Effective rate on borrowings of 3.95% as of June 30, 2018

⁵ Extinguished on January 2, 2018; Interest rate of 3.50% as of September 30, 2017 and June 30, 2017 

⁶ Interest rate of 4.35% as of June 30, 2018

⁷ Interest rate of 6.38% as of June 30, 2018, September 30, 2017 and June 30, 2017

⁸ Interest rate of 4.88% as of June 30, 2018

⁹ Fixed interest rates ranging from 2.33% to 3.25% as of June 30, 2018, September 30, 2017, and June 30, 2017

¹⁰ Fixed interest rates ranging from 2.72% to 10.39% as of June 30, 2018 , September 30, 2017, and June 30, 2017

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Commitments and Contingencies (Tables)

9 Months Ended

Jun. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Schedule of Minimum Rental Commitments under Non-cancelable Operating Leases

At June 30, 2018, the minimum rental commitments under all non-cancelable operating leases with initial or remaining terms of more than one year were as follows (in thousands):

Year Ending September 30,
2018 (July - Sept)	$	25,318
2019		98,378
2020		85,759
2021		74,622
2022		55,115
Thereafter		128,317
Total minimum lease payments	$	467,509

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Geographic Data (Tables)

9 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Schedule of Geographic Information

The following tables summarize certain geographic information for the periods presented (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Net sales
U.S.	$	1,883,249	$	1,167,647	$	4,364,128	$	2,977,108
Canada		51,702		46,247		118,427		109,694
Total net sales	$	1,934,951	$	1,213,894	$	4,482,555	$	3,086,802

	June 30,		September 30,		June 30,
	2018		2017		2017
Long-lived assets
U.S.	$	1,455,771	$	507,236	$	515,170
Canada		12,403		13,446		13,204
Total long-lived assets	$	1,468,174	$	520,682	$	528,374

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Supplemental Guarantor Information (Tables)

9 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Condensed Consolidating Balance Sheets

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	June 30, 2018
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	50,563	$	3,698	$	(26,710	)	$	27,551
Accounts receivable, net		-		1,046,751		32,277		(1,140	)		1,077,888
Inventories, net		-		1,132,228		33,161		-			1,165,389
Prepaid expenses and other current assets		44,662		286,478		6,449		-			337,589
Total current assets		44,662		2,516,020		75,585		(27,850	)		2,608,417
Intercompany receivable, net		-		1,290,785		-		(1,290,785	)		-
Investments in consolidated subsidiaries		5,981,419		-		-		(5,981,419	)		-
Deferred income taxes, net		19,702		-		-		(19,702	)		-
Property and equipment, net		14,046		264,610		10,052		-			288,708
Goodwill		-		2,291,635		29,545		-			2,321,180
Intangibles, net		-		1,368,653		2,352		-			1,371,005
Other assets, net		1,242		269		-		-			1,511
Total Assets	$	6,061,071	$	7,731,972	$	117,534	$	(7,319,756	)	$	6,590,821
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	42,884	$	688,336	$	16,316	$	(27,850	)	$	719,686
Accrued expenses		24,416		490,987		5,549		-			520,952
Current portions of long-term debt		9,700		10,014		-		-			19,714
Total current liabilities		77,000		1,189,337		21,865		(27,850	)		1,260,352
Intercompany payable, net		1,251,503		-		39,282		(1,290,785	)		-
Borrowings under revolving lines of credit, net		-		471,857		10,632		-			482,489
Long-term debt, net		2,494,308		-		-		-			2,494,308
Deferred income taxes, net		-		113,454		176		(19,702	)		93,928
Long-term obligations under equipment financing and other, net		-		15,979		-		-			15,979
Other long-term liabilities		814		5,428		77		-			6,319
Total liabilities		3,823,625		1,796,055		72,032		(1,338,337	)		4,353,375
Convertible preferred stock		399,195		-		-		-			399,195
Total stockholders' equity		1,838,251		5,935,917		45,502		(5,981,419	)		1,838,251
Total Liabilities and Stockholders' Equity	$	6,061,071	$	7,731,972	$	117,534	$	(7,319,756	)	$	6,590,821

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	September 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	149,799	$	1,582	$	(13,131	)	$	138,250
Accounts receivable, net		-		663,034		42,633		(1,140	)		704,527
Inventories, net		-		527,226		24,698		-			551,924
Prepaid expenses and other current assets		4,195		198,817		6,126		-			209,138
Total current assets		4,195		1,538,876		75,039		(14,271	)		1,603,839
Intercompany receivable, net		-		655,372		-		(655,372	)		-
Investments in consolidated subsidiaries		3,160,273		-		-		(3,160,273	)		-
Deferred income taxes, net		30,822		-		-		(30,822	)		-
Property and equipment, net		6,610		138,955		10,564		-			156,129
Goodwill		-		1,220,812		31,174		-			1,251,986
Intangibles, net		-		426,187		2,882		-			429,069
Other assets, net		2,912		5,622		-		-			8,534
Total Assets	$	3,204,812	$	3,985,824	$	119,659	$	(3,860,738	)	$	3,449,557
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	27,174	$	468,891	$	21,903	$	(14,271	)	$	503,697
Accrued expenses		51,183		204,173		5,941		-			261,297
Current portions of long-term obligations		4,500		9,641		-		-			14,141
Total current liabilities		82,857		682,705		27,844		(14,271	)		779,135
Intercompany payable, net		618,881		-		36,491		(655,372	)		-
Borrowings under revolving lines of credit, net		-		-		3,205		-			3,205
Long-term debt, net		721,268		-		-		-			721,268
Deferred income taxes, net		-		168,209		996		(30,822	)		138,383
Long-term obligations under equipment financing and other, net		-		23,147		66		-			23,213
Other long-term liabilities				2,547		-		-			2,547
Total liabilities		1,423,006		876,608		68,602		(700,465	)		1,667,751
Total stockholders' equity		1,781,806		3,109,216		51,057		(3,160,273	)		1,781,806
Total Liabilities and Stockholders' Equity	$	3,204,812	$	3,985,824	$	119,659	$	(3,860,738	)	$	3,449,557

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Balance Sheets

(Unaudited; In thousands)

	June 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	34,583	$	7,314	$	(8,842	)	$	33,055
Accounts receivable, net		1,327		640,796		29,994		(1,140	)		670,977
Inventories, net		-		608,367		33,058		-			641,425
Prepaid expenses and other current assets		30,158		185,633		5,686		-			221,477
Total current assets		31,485		1,469,379		76,052		(9,982	)		1,566,934
Intercompany receivable, net		-		1,037,846		-		(1,037,846	)		-
Investments in consolidated subsidiaries		3,070,328		-		-		(3,070,328	)		-
Deferred income taxes, net		58,230		-		-		(58,230	)		-
Property and equipment, net		6,541		140,126		10,284		-			156,951
Goodwill		-		1,226,034		29,980		-			1,256,014
Intangibles, net		-		440,042		2,920		-			442,962
Other assets, net		1,242		269		-		-			1,511
Total Assets	$	3,167,826	$	4,313,696	$	119,236	$	(4,176,386	)	$	3,424,372
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	23,839	$	354,696	$	19,026	$	(9,982	)	$	387,579
Accrued expenses		18,174		257,387		4,754		-			280,315
Current portions of long-term obligations		4,500		9,262		-		-			13,762
Total current liabilities		46,513		621,345		23,780		(9,982	)		681,656
Intercompany payable, net		998,740		-		39,106		(1,037,846	)		-
Borrowings under revolving lines of credit		-		437,285		12,330		-			449,615
Long-term debt, net		721,685		-		-		-			721,685
Deferred income taxes, net		-		199,746		600		(58,230	)		142,116
Long-term obligations under equipment financing and other, net		-		25,978		47		-			26,025
Other long-term liabilities		-		2,387		-		-			2,387
Total liabilities		1,766,938		1,286,741		75,863		(1,106,058	)		2,023,484
Total stockholders' equity		1,400,888		3,026,955		43,373		(3,070,328	)		1,400,888
Total Liabilities and Stockholders' Equity	$	3,167,826	$	4,313,696	$	119,236	$	(4,176,386	)	$	3,424,372

Condensed Consolidating Statements of Operations

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Operations

(Unaudited; In thousands)

	Three Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net sales	$	-		$	1,883,249	$	51,702	$	-		$	1,934,951
Cost of products sold		-			1,401,045		40,012		-			1,441,057
Gross profit		-			482,204		11,690		-			493,894
Operating expense:
Selling, general and administrative		1,776			313,034		8,384		-			323,194
Depreciation		411			14,967		433		-			15,811
Amortization		-			49,947		129		-			50,076
Total operating expense		2,187			377,948		8,946		-			389,081
Intercompany charges (income)		(7,521	)		7,521		-		-			-
Income (loss) from operations		5,334			96,735		2,744		-			104,813
Interest expense, financing costs, and other		33,416			3,594		338		-			37,348
Intercompany interest expense (income)		(6,809	)		6,427		382		-			-
Income (loss) before provision for income taxes		(21,273	)		86,714		2,024		-			67,465
Provision for (benefit from) income taxes		(6,848	)		24,356		582		-			18,090
Income (loss) before equity in net income of subsidiaries		(14,425	)		62,358		1,442		-			49,375
Equity in net income of subsidiaries		63,800			-		-		(63,800	)		-
Net income (loss)	$	49,375		$	62,358	$	1,442	$	(63,800	)	$	49,375

	Three Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net sales	$	-		$	1,167,647	$	46,247	$	-		$	1,213,894
Cost of products sold		-			880,325		35,815		-			916,140
Gross profit		-			287,322		10,432		-			297,754
Operating expense:
Selling, general and administrative		72			176,094		7,434		-			183,600
Depreciation		335			7,823		421		-			8,579
Amortization		-			20,561		143		-			20,704
Total operating expense		407			204,478		7,998		-			212,883
Intercompany charges (income)		(12,549	)		11,987		562		-			-
Income (loss) from operations		12,142			70,857		1,872		-			84,871
Interest expense, financing costs, and other		9,610			3,586		201		-			13,397
Intercompany interest expense (income)		(6,724	)		6,724		-		-			-
Income (loss) before provision for income taxes		9,256			60,547		1,671		-			71,474
Provision for (benefit from) income taxes		3,473			22,883		459		-			26,815
Income (loss) before equity in net income of subsidiaries		5,783			37,664		1,212		-			44,659
Equity in net income of subsidiaries		38,876			-		-		(38,876	)		-
Net income (loss)	$	44,659		$	37,664	$	1,212	$	(38,876	)	$	44,659

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Operations

(Unaudited; In thousands)

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net sales	$	-		$	4,364,128		$	118,427		$	-		$	4,482,555
Cost of products sold		-			3,288,086			92,445			-			3,380,531
Gross profit		-			1,076,042			25,982			-			1,102,024
Operating expense:
Selling, general and administrative		4,315			828,987			25,232			-			858,534
Depreciation		1,310			39,015			1,315			-			41,640
Amortization		-			104,946			393			-			105,339
Total operating expense		5,625			972,948			26,940			-			1,005,513
Intercompany charges (income)		(8,105	)		8,105			-			-			-
Income (loss) from operations		2,480			94,989			(958	)		-			96,511
Interest expense, financing costs, and other		90,712			8,226			548			-			99,486
Intercompany interest expense (income)		(17,698	)		16,552			1,146			-			-
Income (loss) before provision for income taxes		(70,534	)		70,211			(2,652	)		-			(2,975	)
Provision for (benefit from) income taxes		(11,796	)		(40,891	)		(604	)		-			(53,291	)
Income (loss) before equity in net income of subsidiaries		(58,738	)		111,102			(2,048	)		-			50,316
Equity in net income of subsidiaries		109,054			-			-			(109,054	)		-
Net income (loss)	$	50,316		$	111,102		$	(2,048	)	$	(109,054	)	$	50,316

	Nine Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net sales	$	-		$	2,977,108	$	109,694		$	-		$	3,086,802
Cost of products sold		-			2,248,454		85,050			-			2,333,504
Gross profit		-			728,654		24,644			-			753,298
Operating expense:
Selling, general and administrative		15,006			501,503		21,779			-			538,288
Depreciation		1,057			22,812		1,253			-			25,122
Amortization		-			60,684		432			-			61,116
Total operating expense		16,063			584,999		23,464			-			624,526
Intercompany charges (income)		(37,057	)		35,379		1,678			-			-
Income (loss) from operations		20,994			108,276		(498	)		-			128,772
Interest expense, financing costs, and other		28,947			9,044		1,248			-			39,239
Intercompany interest expense (income)		(17,406	)		17,406		-			-			-
Income (loss) before provision for income taxes		9,453			81,826		(1,746	)		-			89,533
Provision for (benefit from) income taxes		3,063			31,217		(480	)		-			33,800
Income (loss) before equity in net income of subsidiaries		6,390			50,609		(1,266	)		-			55,733
Equity in net income of subsidiaries		49,343			-		-			(49,343	)		-
Net income (loss)	$	55,733		$	50,609	$	(1,266	)	$	(49,343	)	$	55,733

Condensed Consolidating Statements of Comprehensive Income

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Comprehensive Income

(Unaudited; In thousands)

	Three Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	49,375		$	62,358	$	1,442		$	(63,800	)	$	49,375
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,535	)		-		(1,535	)		1,535			(1,535	)
Total other comprehensive income (loss)		(1,535	)		-		(1,535	)		1,535			(1,535	)
Comprehensive income (loss)	$	47,840		$	62,358	$	(93	)	$	(62,265	)	$	47,840

	Three Months Ended June 30, 2017
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Other			Consolidated
Net income (loss)	$	44,659	$	37,664	$	1,212	$	(38,876	)	$	44,659
Other comprehensive income (loss):
Foreign currency translation adjustment		1,730		-		1,730		(1,730	)		1,730
Total other comprehensive income (loss)		1,730		-		1,730		(1,730	)		1,730
Comprehensive income (loss)	$	46,389	$	37,664	$	2,942	$	(40,606	)	$	46,389

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	50,316		$	111,102	$	(2,048	)	$	(109,054	)	$	50,316
Other comprehensive income (loss):
Foreign currency translation adjustment		(3,506	)		-		(3,506	)		3,506			(3,506	)
Total other comprehensive income (loss)		(3,506	)		-		(3,506	)		3,506			(3,506	)
Comprehensive income (loss)	$	46,810		$	111,102	$	(5,554	)	$	(105,548	)	$	46,810

	Nine Months Ended June 30, 2017
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net income (loss)	$	55,733	$	50,609	$	(1,266	)	$	(49,343	)	$	55,733
Other comprehensive income (loss):
Foreign currency translation adjustment		891		-		891			(891	)		891
Total other comprehensive income (loss)		891		-		891			(891	)		891
Comprehensive income (loss)	$	56,624	$	50,609	$	(375	)	$	(50,234	)	$	56,624

Condensed Consolidating Statements of Cash Flows

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Cash Flows

(Unaudited; In thousands)

	Nine Months Ended June 30, 2018
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net cash provided by (used in) operating activities	$	(68,803	)	$	93,178		$	(8,308	)	$	(17,086	)	$	(1,019	)
Investing Activities
Purchases of property and equipment		(8,721	)		(24,901	)		(1,356	)		-			(34,978	)
Acquisition of businesses, net		(2,715,429	)		-			-			-			(2,715,429	)
Proceeds from the sale of assets		-			724			26			-			750
Intercompany activity		628,948			-			-			(628,948	)		-
Net cash provided by (used in) investing activities		(2,095,202	)		(24,177	)		(1,330	)		(628,948	)		(2,749,657	)
Financing Activities
Borrowings under revolving lines of credit		-			2,082,972			39,977			-			2,122,949
Repayments under revolving lines of credit		-			(1,599,839	)		(32,139	)		-			(1,631,978	)
Borrowings under term loan		970,000			-			-			-			970,000
Repayments under term loan		(443,425	)		-			-			-			(443,425	)
Repayments under equipment financing facilities and other		-			(8,604	)		-			-			(8,604	)
Borrowings under senior notes		1,300,000			-			-			-			1,300,000
Payment of debt issuance costs		(58,266	)		(7,522	)		-			-			(65,788	)
Proceeds from issuance of convertible preferred stock		400,000			-			-			-			400,000
Payment of stock issuance costs		(1,279	)		-			-			-			(1,279	)
Payment of dividends on preferred stock		(6,000	)		-			-			-			(6,000	)
Proceeds from issuance of common stock related to equity awards		6,950			-			-			-			6,950
Taxes paid related to net share settlement of equity awards		(3,975	)		-			-			-			(3,975	)
Intercompany activity		-			(635,244	)		2,789			632,455			-
Net cash provided by (used in) financing activities		2,164,005			(168,237	)		10,627			632,455			2,638,850
Effect of exchange rate changes on cash and cash equivalents		-			-			1,127			-			1,127
Net increase (decrease) in cash and cash equivalents		-			(99,236	)		2,116			(13,579	)		(110,699	)
Cash and cash equivalents, beginning of period		-			149,799			1,582			(13,131	)		138,250
Cash and cash equivalents, end of period	$	-		$	50,563		$	3,698		$	(26,710	)	$	27,551

BEACON ROOFING SUPPLY, INC.

Condensed Consolidating Statements of Cash Flows

(Unaudited; In thousands)

	Nine Months Ended June 30, 2017
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations and Other			Consolidated
Net cash provided by (used in) operating activities	$	(33,267	)	$	108,649		$	(2,064	)	$	855		$	74,173
Investing Activities
Purchases of property and equipment		(2,972	)		(27,522	)		(1,388	)		-			(31,882	)
Acquisition of businesses		(128,533	)		-			-			-			(128,533	)
Proceeds from the sale of assets		-			1,828			11			-			1,839
Intercompany activity		159,325			-			-			(159,325	)		-
Net cash provided by (used in) investing activities		27,820			(25,694	)		(1,377	)		(159,325	)		(158,576	)
Financing Activities
Borrowings under revolving lines of credit		-			1,705,434			16,493			-			1,721,927
Repayments under revolving lines of credit		-			(1,624,574	)		(8,996	)		-			(1,633,570	)
Repayments under term loan		(3,375	)		-			-			-			(3,375	)
Repayments under equipment financing facilities and other		-			(7,780	)		-			-			(7,780	)
Proceeds from issuance of common stock		9,994			-			-			-			9,994
Taxes paid related to net share settlement of equity awards		(1,172	)		-			-			-			(1,172	)
Intercompany activity		-			(158,899	)		334			158,565			-
Net cash provided by (used in) financing activities		5,447			(85,819	)		7,831			158,565			86,024
Effect of exchange rate changes on cash and cash equivalents		-			-			48			-			48
Net increase (decrease) in cash and cash equivalents		-			(2,864	)		4,438			95			1,669
Cash and cash equivalents, beginning of period		-			37,447			2,876			(8,937	)		31,386
Cash and cash equivalents, end of period	$	-		$	34,583		$	7,314		$	(8,842	)	$	33,055

XML

Company Overview - Additional Information (Detail) $ in Millions		9 Months Ended
	Jan. 02, 2017 USD ($)	Jun. 30, 2018 State Province
Company Overview [Line Items]
Date of incorporation		Aug. 22, 1997
Allied Acquisition [Member]
Company Overview [Line Items]
Acquisition purchase price in cash | $	$ 2,625
United States
Company Overview [Line Items]
Number of states in which entity operates | State		50
Canada
Company Overview [Line Items]
Number of provinces in which entity operates | Province		6

XML

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Accounting Standards Update 2016-09 [Member]
Significant Accounting Policies [Line Items]
Excess tax benefits recognized	$ 0.1	$ 3.0

XML

Acquisitions - Additional Information (Detail)									3 Months Ended		9 Months Ended		12 Months Ended
	May 01, 2018 USD ($) Location	Jan. 02, 2018 USD ($) State Location $ / shares shares	May 01, 2017 USD ($) Location	Mar. 01, 2017 USD ($) Location	Jan. 09, 2017 USD ($) Location	Jan. 03, 2017 USD ($) Location	Jan. 02, 2017 USD ($)	Dec. 16, 2016 USD ($) Location	Jun. 30, 2018 USD ($) Branch $ / shares shares	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) Branch $ / shares shares	Jun. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) Branch Business $ / shares shares	Mar. 31, 2018 USD ($)	Oct. 25, 2017 USD ($)	Sep. 30, 2016 USD ($)
Business Acquisition [Line Items]
Preferred stock, issuance | shares									0	0	0	0	0
Proceeds from convertible preferred stock											$ 400,000,000	$ 0
Mezzanine equity									$ 399,195,000		399,195,000
Stock issuance costs											$ 1,279,000	$ 0
Common stock, par value | $ / shares									$ 0.01	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Number Of Business Locations Acquired | Branch									1		1		23
Net sales									$ 1,934,951,000	$ 1,213,894,000	$ 4,482,555,000	$ 3,086,802,000
Net income (loss)									49,375,000	44,659,000	50,316,000	55,733,000
Business Acquisition, sales reported by acquired entity for last annual period											5,148,204,000	4,958,292,000
Business Acquisitions Purchase Price Allocation Goodwill Amount									2,321,180,000	$ 1,256,014,000	2,321,180,000	$ 1,256,014,000	$ 1,251,986,000			$ 1,197,565,000
Number Of Business Locations Acquired | Business													5
Senior Notes, Matures November 2025 [Member]
Business Acquisition [Line Items]
Debt instrument, aggregate principal amount															$ 1,300,000,000
Allied Acquisition [Member]
Business Acquisition [Line Items]
Acquisition purchase price in cash							$ 2,625,000,000
Net working capital adjustment									88,100,000
Number Of Business Locations Acquired | Location		208
Number Of States Business Location Acquired | State		31
Net sales											1,320,000,000
Net income (loss)											15,800,000
Business Acquisitions Purchase Price Allocation Goodwill Amount									1,069,498,000		1,069,498,000			$ 1,130,635,000
Business Acquisitions Purchase Price Allocation Intangible Assets Other Than Goodwill									1,047,000,000		1,047,000,000			$ 1,037,000,000
Allied Acquisition [Member] | Investment Agreement [Member] | Series A Cumulative Convertible Participating Preferred Stock [Member]
Business Acquisition [Line Items]
Preferred stock, issuance | shares		400,000
Preferred stock, par value | $ / shares		$ 0.01
Preferred stock, liquidation preference value		$ 400,000,000
Preferred stock, liquidation purchase price per share | $ / shares		$ 1,000
Proceeds from convertible preferred stock		$ 400,000,000
Preferred stock conversion price per share | $ / shares		$ 41.26
Preferred stock dividend rate		6.00%
Mezzanine equity		$ 399,200,000
Stock issuance costs		800,000
Allied Acquisition [Member] | Secured Term Loan B Facility [Member]
Business Acquisition [Line Items]
Long-term Line of Credit		$ 970,000,000
Allied Acquisition [Member] | Secured Term Loan B Facility [Member] | LIBOR [Member]
Business Acquisition [Line Items]
Base borrowing rates		1.25%
Allied Acquisition [Member] | Senior Notes, Matures November 2025 [Member]
Business Acquisition [Line Items]
Debt instrument, aggregate principal amount		$ 1,300,000,000
Allied Acquisition [Member] | Senior-secured Asset-based Revolving Line Of Credit [Member] | LIBOR [Member]
Business Acquisition [Line Items]
Base borrowing rates		2.25%
Allied Acquisition [Member] | Stock Purchase Agreement
Business Acquisition [Line Items]
Acquisition purchase price in cash		$ 2,625,000,000
Tri-State Builder Supply
Business Acquisition [Line Items]
Number Of Business Locations Acquired | Location	1
Business Acquisition, sales reported by acquired entity for last annual period	$ 6,000,000
Series of Individually Immaterial Business Acquisitions
Business Acquisition [Line Items]
Business Acquisitions Purchase Price Allocation Goodwill Amount									1,300,000		1,300,000		$ 53,000,000
Business Acquisitions Purchase Price Allocation Intangible Assets Other Than Goodwill									$ 800,000		$ 800,000		$ 47,400,000
BJ Supply Company
Business Acquisition [Line Items]
Number Of Business Locations Acquired | Location								1
Business Acquisition, sales reported by acquired entity for last annual period								$ 4,000,000
American Building and Roofing, Inc
Business Acquisition [Line Items]
Number Of Business Locations Acquired | Location						7
Business Acquisition, sales reported by acquired entity for last annual period						$ 36,000,000
Eco Insulation Supply [Member]
Business Acquisition [Line Items]
Number Of Business Locations Acquired | Location					1
Business Acquisition, sales reported by acquired entity for last annual period					$ 8,000,000
Acme Building Materials Inc
Business Acquisition [Line Items]
Number Of Business Locations Acquired | Location				3
Business Acquisition, sales reported by acquired entity for last annual period				$ 13,000,000
Lowry's Inc.
Business Acquisition [Line Items]
Number Of Business Locations Acquired | Location			11
Business Acquisition, sales reported by acquired entity for last annual period			$ 76,000,000

XML

Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2016
Business Combination Separately Recognized Transactions [Line Items]
Goodwill	$ 2,321,180		$ 1,251,986	$ 1,256,014	$ 1,197,565
Allied Acquisition [Member]
Business Combination Separately Recognized Transactions [Line Items]
Cash	169	$ 19,322
Accounts receivable	322,962	315,485
Inventory	314,658	322,705
Prepaid and other current assets	75,144	59,279
Property, plant, and equipment	139,360	139,528
Goodwill	1,069,498	1,130,635
Intangible assets	1,047,000	1,037,000
Current liabilities	(253,048)	(271,252)
Non-current liabilities	(2,645)	(6,820)
Total purchase price	2,713,098	$ 2,745,882
Cash	(19,153)
Accounts receivable	7,477
Inventory	(8,047)
Prepaid and other current assets	15,865
Property, plant, and equipment	(168)
Goodwill	(61,137)
Intangible assets	10,000
Current liabilities	18,204
Non-current liabilities	4,175
Total purchase price	$ (32,784)

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Acquisitions - Business Acquisition, Pro Forma Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Business Acquisition Pro Forma Information [Abstract]
Net sales	$ 5,148,204	$ 4,958,292
Net income (loss)	$ 11,394	$ 15,654

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Net Income (Loss) Per Share - Components and Calculation of Basic and Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net income (loss)		$ 49,375	$ 44,659	$ 50,316	$ 55,733
Dividends on preferred shares	[1]	(6,000)	0	(12,000)	0
Net income (loss) attributable to common shareholders		43,375	44,659	38,316	55,733
Undistributed income allocated to participating securities		(5,406)		(3,293)
Net income (loss) attributable to common shareholders - basic and diluted		$ 37,969	$ 44,659	$ 35,023	$ 55,733
Weighted-average common shares outstanding - basic		68,086,387	60,311,923	67,976,980	60,131,546
Effect of common share equivalents		1,061,756	1,038,920	1,263,060	1,032,045
Weighted-average common shares outstanding - diluted		69,148,143	61,350,843	69,240,040	61,163,591
Net income (loss) per share - basic	[2]	$ 0.56	$ 0.74	$ 0.52	$ 0.93
Net income (loss) per share - diluted	[2]	$ 0.55	$ 0.73	$ 0.51	$ 0.91

[1] For the three months ended June 30, 2018, $6.0 million is comprised entirely of cumulative dividends that are undeclared as of period end. For the nine months ended June 30, 2018, $12.0 million is comprised of the $6.0 million undeclared cumulative dividends as well as an additional $6.0 million of preferred share dividends that had been declared and paid as of period end.

[2] See Note 4 for detailed calculations and further discussion.

XML

Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	9,694,619		6,392,056
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	484,358	247,102	349,281	359,757
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	355,891		148,638	82,520

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Stockholders' Equity - Schedule of Stockholders Equity (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Class Of Stock [Line Items]
Balance			$ 1,781,806
Beginning Balance(in shares)			67,700,858
Issuance of common stock, net of shares withheld for taxes			$ 2,976
Issuance costs related to secondary offering of common stock			(474)
Stock-based compensation			13,133
Other comprehensive income (loss)			(3,506)
Net income (loss)	$ 49,375	$ 44,659	50,316	$ 55,733
Dividends on preferred shares			(6,000)
Balance	$ 1,838,251	$ 1,400,888	$ 1,838,251	$ 1,400,888
Ending Balance(in shares)	68,105,113	60,361,035	68,105,113	60,361,035
Common Stock [Member]
Class Of Stock [Line Items]
Balance			$ 677
Beginning Balance(in shares)			67,700,858
Issuance of common stock, net of shares withheld for taxes			$ 4
Issuance of common stock, net of shares withheld for taxes (in shares)			404,255
Balance	$ 681		$ 681
Ending Balance(in shares)	68,105,113		68,105,113
Additional Paid-in Capital [Member]
Class Of Stock [Line Items]
Balance			$ 1,047,506
Issuance of common stock, net of shares withheld for taxes			2,972
Issuance costs related to secondary offering of common stock			(474)
Stock-based compensation			13,133
Balance	$ 1,063,137		1,063,137
Retained Earnings [Member]
Class Of Stock [Line Items]
Balance			748,186
Net income (loss)			50,316
Dividends on preferred shares			(6,000)
Balance	792,502		792,502
Accumulated Other Comprehensive Loss [Member]
Class Of Stock [Line Items]
Balance			(14,563)
Other comprehensive income (loss)			(3,506)
Balance	$ (18,069)		$ (18,069)

XML

Stockholders' Equity - Additional Information (Detail) - shares	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Equity [Abstract]
Common stock (voting), shares authorized	100,000,000	100,000,000	100,000,000
Common Stock (Voting), issued	68,105,113	67,700,858	60,361,035
Common Stock (voting), outstanding	68,105,113	67,700,858	60,361,035

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Stockholders' Equity - Reclassification out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			$ 1,781,806
Other comprehensive income before reclassifications	$ (1,535)	$ 1,730	(3,506)	$ 891
Balance	1,838,251	$ 1,400,888	1,838,251	$ 1,400,888
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			(14,563)
Other comprehensive income before reclassifications			(3,506)
Balance	(18,069)		(18,069)
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			(14,563)
Other comprehensive income before reclassifications			(3,506)
Balance	$ (18,069)		$ (18,069)

XML

Stock-based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Feb. 09, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation number of shares authorized					5,000,000
Stock-based compensation number of shares available for awards	3,748,856		3,748,856
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares that will vest			100.00%
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non Qualified Options Expire			10 years
Allocated stock-based compensation expense	$ 1.0	$ 1.1	$ 2.9	$ 3.7
Unrecognized compensation cost related to unvested stock	5.7		$ 5.7
Unrecognized compensation cost related to unvested stock, expected weighted-average period of recognition			1 year 10 months 24 days
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	4.3	$ 2.6	$ 10.2	$ 7.7
Unrecognized compensation cost related to unvested stock	$ 23.3		$ 23.3
Unrecognized compensation cost related to unvested stock, expected weighted-average period of recognition			1 year 9 months 18 days
Restricted Stock Units (RSUs) [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares that will vest			0.00%
Restricted Stock Units (RSUs) [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares that will vest			200.00%

XML

Stock-based Compensation - Fair Values of Options, Black-Scholes Option-Pricing Model, Weighted-Average Assumptions (Detail)	9 Months Ended
	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Risk-free interest rate	2.10%
Expected volatility	26.43%
Expected life (in years)	5 years 5 months 15 days
Dividend yield	0.00%

XML

Stock-based compensation - Stock Options Outstanding and Activity During the Period (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2018	Sep. 30, 2017
Options Outstanding
Balance as of September 30, 2017	2,084,228
Granted	276,370
Exercised	(277,589)
Canceled/Forfeited	(54,669)
Expired	(1,991)
Balance as of June 30, 2018	2,026,349	2,084,228
Vested and expected to vest after June 30, 2018	2,008,997
Exercisable as of June 30, 2018	1,470,856
Weighted-Average Exercise Price
Beginning Balance	$ 28.84
Granted	55.17
Exercised	25.04
Canceled/Forfeited	40.15
Expired	15.28
Ending Balance	32.66	$ 28.84
Vested and expected to vest after June 30, 2018	32.52
Exercisable as of June 30, 2018	$ 27.30
Weighted-Average Remaining Contractual Life
Balance	5 years 10 months 24 days	6 years 1 month 6 days
Vested and expected to vest after June 30, 2018	5 years 10 months 24 days
Exercisable as of June 30, 2018	4 years 10 months 24 days
Aggregate Intrinsic Value
Balance	$ 24,544	$ 46,714
Vested and expected to vest after June 30, 2018	24,497
Exercisable as of June 30, 2018	$ 22,871

XML

Stock-based compensation - Stock Option Grants, Vesting, and Exercises (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Weighted-average fair value of stock options granted	$ 15.86	$ 14.21
Total grant date fair value of stock options vested	$ 4,172	$ 5,504
Total intrinsic value of stock options exercised	$ 8,995	$ 9,617

XML

Stock-based Compensation - Restricted Shares and Units Outstanding and Activity During the Period (Detail) - $ / shares	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Weighted - Average Grant Date Fair Value
Granted	$ 57.40	$ 47.31
Restricted Stock Units (RSUs) [Member]
Outstanding
Balance at September 30, 2017	770,973
Granted	370,190
Performance awards	41,440
Released	(191,703)
Canceled/Forfeited	(43,082)
Balance at June 30, 2018	947,818
Vested and expected to vest after June 30, 2018	961,213
Weighted - Average Grant Date Fair Value
Balance at September 30, 2017	$ 38.95
Granted	57.40
Performance awards	39.56
Released	31.91
Canceled/Forfeited	48.84
Balance at June 30, 2018	47.16
Vested and expected to vest after June 30, 2018	$ 47.22

XML

Stock-based Compensation - Restricted Shares and Units Outstanding and Activity During the Period (Parenthetical) (Detail)	9 Months Ended
	Jun. 30, 2018
Restricted Stock Units (RSUs) [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares vested and expected to vest	100.00%

XML

Stock-based Compensation - Schedule Of Restricted Stock Units Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Weighted-average fair value of RSUs granted	$ 57.40	$ 47.31
Total grant date fair value of RSUs vested	$ 6,656	$ 4,552
Total intrinsic value of RSUs released	$ 11,041	$ 5,620

XML

Goodwill and Intangible Assets - Summary of Changes in goodwill (Detail) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 1,251,986	$ 1,197,565
Acquisitions	1,070,823	58,234
Translation and other adjustments	(1,629)	215
Ending balance	$ 2,321,180	$ 1,256,014

XML

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Goodwill And Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired			$ 1,050,000		$ 47,400
Amortization of Intangible Assets	$ 50,076	$ 20,704	$ 105,339	$ 61,116
Minimum [Member]
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			5 years
Maximum [Member]
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			20 years
Weighted Average [Member]
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			18 years 8 months 12 days
Trademarks [Member]
Goodwill And Intangible Assets [Line Items]
Indefinite-lived Intangible Assets Acquired			$ 120,000
Customer Relationships [Member]
Goodwill And Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired			$ 920,800		42,700
Customer Relationships [Member] | Weighted Average [Member]
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			18 years 10 months 6 days
Trademarks [Member]
Goodwill And Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired					4,600
Trademarks [Member] | Weighted Average [Member]
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			7 years 9 months 10 days
Beneficial Lease Arrangements [Member]
Goodwill And Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired			$ 6,600		$ 100
Beneficial Lease Arrangements [Member] | Weighted Average [Member]
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			4 years 11 months 8 days

XML

Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Finite Lived Intangible Assets [Line Items]
Amortizable intangible assets	$ 1,551,402	$ 624,410	$ 616,760
Accumulated amortization	(373,447)	(268,391)	(246,848)
Total amortizable intangible assets, net	1,177,955	356,019	369,912
Indefinite lived trademarks	193,050	73,050	73,050
Total intangibles, net	$ 1,371,005	429,069	442,962
Weighted Average [Member]
Finite Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	18 years 8 months 12 days
Minimum [Member]
Finite Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years
Maximum [Member]
Finite Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	20 years
Noncompete Agreements [Member]
Finite Lived Intangible Assets [Line Items]
Amortizable intangible assets	$ 2,824	2,824	2,824
Noncompete Agreements [Member] | Weighted Average [Member]
Finite Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	2 years 8 months 23 days
Customer Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Amortizable intangible assets	$ 1,530,434	610,026	605,326
Customer Relationships [Member] | Weighted Average [Member]
Finite Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	18 years 10 months 6 days
Trademarks [Member]
Finite Lived Intangible Assets [Line Items]
Amortizable intangible assets	$ 10,500	10,500	7,650
Trademarks [Member] | Weighted Average [Member]
Finite Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	7 years 9 months 10 days
Beneficial Lease Arrangements [Member]
Finite Lived Intangible Assets [Line Items]
Amortizable intangible assets	$ 7,644	$ 1,060	$ 960
Beneficial Lease Arrangements [Member] | Weighted Average [Member]
Finite Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	4 years 11 months 8 days

XML

Goodwill and Intangible Assets - Summary of Estimated Future Amortization (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
2018 (July - Sept)	$ 25,010
2019	189,302
2020	182,398
2021	153,513
2022	125,948
Thereafter	501,784
Total amortizable intangible assets, net	$ 1,177,955	$ 356,019	$ 369,912

XML

Financing Arrangements - Long-term Debt Instruments (Detail) - USD ($)		Jun. 30, 2018		Jan. 02, 2018	Sep. 30, 2017	Jun. 30, 2017		Oct. 02, 2015
Debt Instrument [Line Items]
Borrowings under revolving lines of credit/term loans, net		$ 482,489,000			$ 3,205,000	$ 449,615,000
Senior Notes, Less: current portion		0			0	0
Total long-term borrowings under Senior Notes		1,572,676,000			292,328,000	292,008,000
Long-term debt, net		2,494,308,000			721,268,000	721,685,000
Equipment financing facilities, various maturities through September 2021	[1]	12,288,000			12,898,000	14,314,000
Capital lease obligations, various maturities through November 2021	[2]	13,705,000			19,956,000	20,973,000
Long-term obligations under equipment financing and other, net		15,979,000			23,213,000	26,025,000
Senior Notes, Matures October 2023 [Member]
Debt Instrument [Line Items]
Senior Notes	[3]	293,287,000			292,328,000	292,008,000
Senior Notes, Matures November 2025 [Member]
Debt Instrument [Line Items]
Senior Notes	[4]	1,279,389,000
Equipment Financing Facilities and Other [Member]
Debt Instrument [Line Items]
Total obligations under equipment financing facilities and other		25,993,000			32,854,000	35,287,000
Less: current portion		(10,014,000)			(9,641,000)	(9,262,000)
Long-term obligations under equipment financing and other, net		15,979,000			23,213,000	26,025,000
Revolving Lines of Credit [Member]
Debt Instrument [Line Items]
Borrowings under revolving lines of credit/term loans, net		482,489,000			3,205,000	449,615,000
Revolving Lines of Credit [Member] | 2020 ABL [Member] | U.S. [Member]
Debt Instrument [Line Items]
Total Borrowings under revolving lines of credit/term loans						437,285,000	[5]	$ 670,000,000
Revolving Lines of Credit [Member] | 2020 ABL [Member] | Canada [Member]
Debt Instrument [Line Items]
Total Borrowings under revolving lines of credit/term loans	[6]				3,205,000	12,330,000
Revolving Lines of Credit [Member] | 2023 ABL [Member]
Debt Instrument [Line Items]
Borrowings under revolving lines of credit/term loans, net		482,500,000
Revolving Lines of Credit [Member] | 2023 ABL [Member] | U.S. [Member]
Debt Instrument [Line Items]
Total Borrowings under revolving lines of credit/term loans	[7]	471,857,000
Revolving Lines of Credit [Member] | 2023 ABL [Member] | Canada [Member]
Debt Instrument [Line Items]
Total Borrowings under revolving lines of credit/term loans	[8]	10,632,000
Term Loan [Member]
Debt Instrument [Line Items]
Less: current portion		(9,700,000)			(4,500,000)	(4,500,000)
Borrowings under revolving lines of credit/term loans, net		921,632,000			428,940,000	429,677,000
Term Loan [Member] | Term Loan, Matures January 2, 2025 [Member]
Debt Instrument [Line Items]
Total Borrowings under revolving lines of credit/term loans		$ 931,332,000	[9]	$ 970,000,000
Term Loan [Member] | Term Loan, Matures October 1, 2022 [Member]
Debt Instrument [Line Items]
Total Borrowings under revolving lines of credit/term loans	[10]				$ 433,440,000	$ 434,177,000

[1] Fixed interest rates ranging from 2.33% to 3.25% as of June 30, 2018, September 30, 2017, and June 30, 2017

[2] Fixed interest rates ranging from 2.72% to 10.39% as of June 30, 2018 , September 30, 2017, and June 30, 2017

[3] Interest rate of 6.38% as of June 30, 2018, September 30, 2017 and June 30, 2017

[4] Interest rate of 4.88% as of June 30, 2018

[5] Extinguished on January 2, 2018; Effective rate on borrowings of 3.28% as of June 30, 2017

[6] Extinguished on January 2, 2018; Effective rate on borrowings of 3.70% as of September 30, 2017 and 3.20% as of June 30, 2017

[7] Effective rate on borrowings of 3.78% as of June 30, 2018

[8] Effective rate on borrowings of 3.95% as of June 30, 2018

[9] Interest rate of 4.35% as of June 30, 2018

[10] Extinguished on January 2, 2018; Interest rate of 3.50% as of September 30, 2017 and June 30, 2017

XML

Financing Arrangements - Long-term Debt Instruments (Parenthetical) (Detail)			9 Months Ended		12 Months Ended
	Jan. 02, 2018	Oct. 02, 2015	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Equipment Financing Facilities [Member]
Debt Instrument [Line Items]
Debt instrument maturity date			Sep. 30, 2021
Equipment Financing Facilities [Member] | Minimum [Member]
Debt Instrument [Line Items]
Equipment financing facilities, fixed interest rate percentage			2.33%	2.33%	2.33%
Equipment Financing Facilities [Member] | Maximum [Member]
Debt Instrument [Line Items]
Equipment financing facilities, fixed interest rate percentage			3.25%	3.25%	3.25%
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Debt instrument maturity date			Nov. 30, 2021
Capital Lease Obligations [Member] | Minimum [Member]
Debt Instrument [Line Items]
Capital lease obligations, fixed interest rate percentage			2.72%	2.72%	2.72%
Capital Lease Obligations [Member] | Maximum [Member]
Debt Instrument [Line Items]
Capital lease obligations, fixed interest rate percentage			10.39%	10.39%	10.39%
Senior Notes, Matures October 2023 [Member]
Debt Instrument [Line Items]
Debt interest rate at period end			6.38%	6.38%	6.38%
Debt instrument maturity date		Oct. 01, 2023	Oct. 31, 2023
Senior Notes, Matures November 2025 [Member]
Debt Instrument [Line Items]
Debt interest rate at period end			4.88%
Debt instrument maturity date			Nov. 01, 2025
Revolving Lines of Credit [Member] | 2020 ABL [Member]
Debt Instrument [Line Items]
Debt instrument maturity date		Oct. 01, 2020
Revolving Lines of Credit [Member] | 2020 ABL [Member] | U.S. [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End				3.28%
Line of Credit Facility, Expiration Date			Oct. 01, 2020
Debt extinguishment date			Jan. 02, 2018
Revolving Lines of Credit [Member] | 2020 ABL [Member] | Canada [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End				3.20%	3.70%
Line of Credit Facility, Expiration Date			Oct. 01, 2020
Debt extinguishment date			Jan. 02, 2018
Revolving Lines of Credit [Member] | 2023 ABL [Member]
Debt Instrument [Line Items]
Debt instrument maturity date	Jan. 02, 2023
Revolving Lines of Credit [Member] | 2023 ABL [Member] | U.S. [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End			3.78%
Line of Credit Facility, Expiration Date			Jan. 02, 2023
Revolving Lines of Credit [Member] | 2023 ABL [Member] | Canada [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End			3.95%
Line of Credit Facility, Expiration Date			Jan. 02, 2023
Term Loan [Member] | Term Loan, Matures October 1, 2022 [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End				3.50%	3.50%
Line of Credit Facility, Expiration Date			Oct. 01, 2022
Debt extinguishment date			Jan. 02, 2018
Term Loan [Member] | Term Loan, Matures January 2, 2025 [Member]
Debt Instrument [Line Items]
Debt interest rate at period end			4.35%
Debt instrument maturity date	Jan. 02, 2025		Jan. 02, 2025

XML

Financing Arrangements - Additional Information (Detail)				9 Months Ended				12 Months Ended
		Jan. 02, 2018 USD ($)	Oct. 02, 2015 USD ($)	Jun. 30, 2018 USD ($) Covenant		Jun. 30, 2017 USD ($)		Sep. 30, 2017 USD ($)	Oct. 25, 2017 USD ($)
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 3,570,000,000	$ 1,450,000,000
Borrowings under senior notes				$ 1,300,000,000		$ 0
Payments of debt issuance costs		65,800,000		65,788,000		0
Gains (Losses) on Extinguishment of Debt				(1,726,000)		0
Borrowings under revolving lines of credit/term loans, net				482,489,000		449,615,000		$ 3,205,000
Equipment financing facilities, various maturities through September 2021	[1]			12,288,000		14,314,000		12,898,000
Capital lease obligations, various maturities through November 2021	[2]			$ 13,705,000		$ 20,973,000		$ 19,956,000
Equipment Financing Facilities and Other [Member]
Debt Instrument [Line Items]
Debt instrument maturity date				Sep. 30, 2021
Equipment financing facilities, various maturities through September 2021				$ 12,300,000
Equipment Financing Facilities and Other [Member] | Minimum [Member]
Debt Instrument [Line Items]
Percentage of Fixed Interest Rate of Equipment Financing Facilities				2.33%		2.33%		2.33%
Equipment Financing Facilities and Other [Member] | Maximum [Member]
Debt Instrument [Line Items]
Percentage of Fixed Interest Rate of Equipment Financing Facilities				3.25%		3.25%		3.25%
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Debt instrument maturity date				Nov. 30, 2021
Capital lease obligations, various maturities through November 2021				$ 13,700,000
Capital Lease Obligations [Member] | Minimum [Member]
Debt Instrument [Line Items]
Capital Leases of Lessor, Contingent Rentals, Basis Spread on Variable Rate				2.72%
Capital Lease Obligations [Member] | Maximum [Member]
Debt Instrument [Line Items]
Capital Leases of Lessor, Contingent Rentals, Basis Spread on Variable Rate				10.39%
Roofing Supply Group [Member]
Debt Instrument [Line Items]
Payments of debt issuance costs				$ 31,300,000
Roofing Supply Group [Member] | Unsecured Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument maturity year				2020
Allied Financing Arrangements [Member]
Debt Instrument [Line Items]
Payments of debt issuance costs		2,000,000
Gains (Losses) on Extinguishment of Debt		(1,700,000)
Senior Notes, Matures November 2025 [Member]
Debt Instrument [Line Items]
Borrowings under senior notes		1,300,000,000
Debt instrument maturity date				Nov. 01, 2025
Unamortized debt issuance costs				$ 20,600,000
Debt instrument, aggregate principal amount									$ 1,300,000,000
Debt instrument interest rate				4.88%
Debt instrument, issue price percentage									100.00%
Senior Notes Payable	[3]			$ 1,279,389,000
Senior Notes, Matures October 2023 [Member]
Debt Instrument [Line Items]
Borrowings under senior notes			$ 300,000,000
Debt instrument maturity date			Oct. 01, 2023	Oct. 31, 2023
Unamortized debt issuance costs				$ 6,700,000
Debt instrument interest rate				6.38%		6.38%		6.38%
Senior Notes Payable	[4]			$ 293,287,000		$ 292,008,000		$ 292,328,000
Debt instrument, coupon rate			6.38%
Revolving Lines of Credit [Member]
Debt Instrument [Line Items]
Borrowings under revolving lines of credit/term loans, net				$ 482,489,000		449,615,000		3,205,000
Revolving Lines of Credit [Member] | 2023 ABL [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		1,300,000,000
Proceeds from Lines of Credit		$ 525,000,000
Debt instrument maturity date		Jan. 02, 2023
Line of credit facility, unused fees				0.25%
Number of financial covenants | Covenant				1
Fixed charge coverage ratio				100.00%
Borrowings under revolving lines of credit/term loans, net				$ 482,500,000
Unamortized debt issuance costs				11,300,000
Revolving Lines of Credit [Member] | 2023 ABL [Member] | U.S. [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 1,200,000,000
Long-term Line of Credit	[5]			471,857,000
Standby letters of credit outstanding				14,800,000
Revolving Lines of Credit [Member] | 2023 ABL [Member] | Canada [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		100,000,000
Long-term Line of Credit	[6]			10,632,000
Revolving Lines of Credit [Member] | 2020 ABL [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 700,000,000
Proceeds from Lines of Credit			$ 350,000,000
Debt instrument maturity date			Oct. 01, 2020
Debt instrument paid off date			Jan. 02, 2018
Revolving Lines of Credit [Member] | 2020 ABL [Member] | U.S. [Member]
Debt Instrument [Line Items]
Long-term Line of Credit			$ 670,000,000			437,285,000	[7]
Revolving Lines of Credit [Member] | 2020 ABL [Member] | Canada [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			30,000,000
Long-term Line of Credit	[8]					12,330,000		3,205,000
Term Loan [Member]
Debt Instrument [Line Items]
Borrowings under revolving lines of credit/term loans, net				921,632,000		$ 429,677,000		$ 428,940,000
Term Loan [Member] | Term Loan, Matures January 2, 2025 [Member]
Debt Instrument [Line Items]
Long-term Line of Credit		$ 970,000,000		$ 931,332,000	[9]
Debt instrument maturity date		Jan. 02, 2025		Jan. 02, 2025
Unamortized debt issuance costs				$ 36,200,000
Debt Instrument, Frequency of Periodic Payment				quarterly
Debt Instrument, Periodic Payment		$ 2,400,000
Debt instrument interest rate				4.35%
Term Loan [Member] | 2022 Term Loan [Member]
Debt Instrument [Line Items]
Long-term Line of Credit			$ 450,000,000
Debt instrument maturity date			Oct. 01, 2022
Debt Instrument, Frequency of Periodic Payment				quarterly
Debt Instrument, Periodic Payment			$ 1,100,000
Debt instrument paid off date			Jan. 02, 2018
Write off of debt issuance costs			$ 700,000

[1] Fixed interest rates ranging from 2.33% to 3.25% as of June 30, 2018, September 30, 2017, and June 30, 2017

[2] Fixed interest rates ranging from 2.72% to 10.39% as of June 30, 2018 , September 30, 2017, and June 30, 2017

[3] Interest rate of 4.88% as of June 30, 2018

[4] Interest rate of 6.38% as of June 30, 2018, September 30, 2017 and June 30, 2017

[5] Effective rate on borrowings of 3.78% as of June 30, 2018

[6] Effective rate on borrowings of 3.95% as of June 30, 2018

[7] Extinguished on January 2, 2018; Effective rate on borrowings of 3.28% as of June 30, 2017

[8] Extinguished on January 2, 2018; Effective rate on borrowings of 3.70% as of September 30, 2017 and 3.20% as of June 30, 2017

[9] Interest rate of 4.35% as of June 30, 2018

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Commitments and Contingencies - Schedule of Minimum Rental Commitments under Non-cancelable Operating Leases (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2018 (July - Sept)	$ 25,318
2019	98,378
2020	85,759
2021	74,622
2022	55,115
Thereafter	128,317
Total minimum lease payments	$ 467,509

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Commitments And Contingencies Disclosure [Abstract]
Operating Leases, Rent Expense, Net, Total	$ 27.7	$ 15.8	$ 71.4	$ 44.7

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Geographic Data - Schedule Of Geographic Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Segment Reporting Information [Line Items]
Net sales	$ 1,934,951	$ 1,213,894	$ 4,482,555	$ 3,086,802
Long-lived assets	1,468,174	528,374	1,468,174	528,374	$ 520,682
U.S. [Member]
Segment Reporting Information [Line Items]
Net sales	1,883,249	1,167,647	4,364,128	2,977,108
Long-lived assets	1,455,771	515,170	1,455,771	515,170	507,236
Canada [Member]
Segment Reporting Information [Line Items]
Net sales	51,702	46,247	118,427	109,694
Long-lived assets	$ 12,403	$ 13,204	$ 12,403	$ 13,204	$ 13,446

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Fair Value Measurement - Additional Information (Detail) - Fair Value, Inputs, Level 2 [Member] $ in Millions	9 Months Ended
	Jun. 30, 2018 USD ($)
Senior Notes Due in 2023 [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Debt instrument maturity year	2023
Senior Notes Due in 2023 [Member] | Carrying Value [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Senior notes	$ 300.0
Senior Notes Due in 2023 [Member] | Fair Value [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Senior notes	$ 311.0
Senior Notes Due in 2025 [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Debt instrument maturity year	2025
Senior Notes Due in 2025 [Member] | Carrying Value [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Senior notes	$ 1,300.0
Senior Notes Due in 2025 [Member] | Fair Value [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Senior notes	$ 1,200.0

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Provisional expense for one-time transition tax liability		$ 0.9
Provisional income tax benefit	$ 1.2		$ 50.1
Scenario, Forecast [Member]
Blended federal corporate income tax rate					24.50%
Federal corporate income tax rate				21.00%

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Supplemental Guarantor Information - Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2016
Current assets:
Cash and cash equivalents	$ 27,551	$ 138,250	$ 33,055	$ 31,386
Accounts receivable, net	1,077,888	704,527	670,977
Inventories, net	1,165,389	551,924	641,425
Prepaid expenses and other current assets	337,589	209,138	221,477
Total current assets	2,608,417	1,603,839	1,566,934
Intercompany receivable, net	0	0	0
Investments in consolidated subsidiaries	0	0	0
Deferred income taxes, net	0	0	0
Property and equipment, net	288,708	156,129	156,951
Goodwill	2,321,180	1,251,986	1,256,014	1,197,565
Intangibles, net	1,371,005	429,069	442,962
Other assets, net	1,511	8,534	1,511
Total Assets	6,590,821	3,449,557	3,424,372
Current liabilities:
Accounts payable	719,686	503,697	387,579
Accrued expenses	520,952	261,297	280,315
Current portions of long-term debt	19,714	14,141	13,762
Total current liabilities	1,260,352	779,135	681,656
Intercompany payable, net	0	0	0
Borrowings under revolving lines of credit, net	482,489	3,205	449,615
Long-term debt, net	2,494,308	721,268	721,685
Deferred income taxes, net	93,928	138,383	142,116
Long-term obligations under equipment financing and other, net	15,979	23,213	26,025
Other long-term liabilities	6,319	2,547	2,387
Total liabilities	4,353,375	1,667,751	2,023,484
Convertible preferred stock	399,195
Total stockholders' equity	1,838,251	1,781,806	1,400,888
Total Liabilities and Stockholders' Equity	6,590,821	3,449,557	3,424,372
Parent Company [Member]
Current assets:
Cash and cash equivalents	0	0	0	0
Accounts receivable, net	0	0	1,327
Inventories, net	0	0	0
Prepaid expenses and other current assets	44,662	4,195	30,158
Total current assets	44,662	4,195	31,485
Intercompany receivable, net	0	0	0
Investments in consolidated subsidiaries	5,981,419	3,160,273	3,070,328
Deferred income taxes, net	19,702	30,822	58,230
Property and equipment, net	14,046	6,610	6,541
Goodwill	0	0	0
Intangibles, net	0	0	0
Other assets, net	1,242	2,912	1,242
Total Assets	6,061,071	3,204,812	3,167,826
Current liabilities:
Accounts payable	42,884	27,174	23,839
Accrued expenses	24,416	51,183	18,174
Current portions of long-term debt	9,700	4,500	4,500
Total current liabilities	77,000	82,857	46,513
Intercompany payable, net	1,251,503	618,881	998,740
Borrowings under revolving lines of credit, net	0	0	0
Long-term debt, net	2,494,308	721,268	721,685
Deferred income taxes, net	0	0	0
Long-term obligations under equipment financing and other, net	0	0	0
Other long-term liabilities	814	0	0
Total liabilities	3,823,625	1,423,006	1,766,938
Convertible preferred stock	399,195
Total stockholders' equity	1,838,251	1,781,806	1,400,888
Total Liabilities and Stockholders' Equity	6,061,071	3,204,812	3,167,826
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	50,563	149,799	34,583	37,447
Accounts receivable, net	1,046,751	663,034	640,796
Inventories, net	1,132,228	527,226	608,367
Prepaid expenses and other current assets	286,478	198,817	185,633
Total current assets	2,516,020	1,538,876	1,469,379
Intercompany receivable, net	1,290,785	655,372	1,037,846
Investments in consolidated subsidiaries	0	0	0
Deferred income taxes, net	0	0	0
Property and equipment, net	264,610	138,955	140,126
Goodwill	2,291,635	1,220,812	1,226,034
Intangibles, net	1,368,653	426,187	440,042
Other assets, net	269	5,622	269
Total Assets	7,731,972	3,985,824	4,313,696
Current liabilities:
Accounts payable	688,336	468,891	354,696
Accrued expenses	490,987	204,173	257,387
Current portions of long-term debt	10,014	9,641	9,262
Total current liabilities	1,189,337	682,705	621,345
Intercompany payable, net	0	0	0
Borrowings under revolving lines of credit, net	471,857	0	437,285
Long-term debt, net	0	0	0
Deferred income taxes, net	113,454	168,209	199,746
Long-term obligations under equipment financing and other, net	15,979	23,147	25,978
Other long-term liabilities	5,428	2,547	2,387
Total liabilities	1,796,055	876,608	1,286,741
Convertible preferred stock	0
Total stockholders' equity	5,935,917	3,109,216	3,026,955
Total Liabilities and Stockholders' Equity	7,731,972	3,985,824	4,313,696
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	3,698	1,582	7,314	2,876
Accounts receivable, net	32,277	42,633	29,994
Inventories, net	33,161	24,698	33,058
Prepaid expenses and other current assets	6,449	6,126	5,686
Total current assets	75,585	75,039	76,052
Intercompany receivable, net	0	0	0
Investments in consolidated subsidiaries	0	0	0
Deferred income taxes, net	0	0	0
Property and equipment, net	10,052	10,564	10,284
Goodwill	29,545	31,174	29,980
Intangibles, net	2,352	2,882	2,920
Other assets, net	0	0	0
Total Assets	117,534	119,659	119,236
Current liabilities:
Accounts payable	16,316	21,903	19,026
Accrued expenses	5,549	5,941	4,754
Current portions of long-term debt	0	0	0
Total current liabilities	21,865	27,844	23,780
Intercompany payable, net	39,282	36,491	39,106
Borrowings under revolving lines of credit, net	10,632	3,205	12,330
Long-term debt, net	0	0	0
Deferred income taxes, net	176	996	600
Long-term obligations under equipment financing and other, net	0	66	47
Other long-term liabilities	77	0	0
Total liabilities	72,032	68,602	75,863
Convertible preferred stock	0
Total stockholders' equity	45,502	51,057	43,373
Total Liabilities and Stockholders' Equity	117,534	119,659	119,236
Eliminations and Other [Member]
Current assets:
Cash and cash equivalents	(26,710)	(13,131)	(8,842)	$ (8,937)
Accounts receivable, net	(1,140)	(1,140)	(1,140)
Inventories, net	0	0	0
Prepaid expenses and other current assets	0	0	0
Total current assets	(27,850)	(14,271)	(9,982)
Intercompany receivable, net	(1,290,785)	(655,372)	(1,037,846)
Investments in consolidated subsidiaries	(5,981,419)	(3,160,273)	(3,070,328)
Deferred income taxes, net	(19,702)	(30,822)	(58,230)
Property and equipment, net	0	0	0
Goodwill	0	0	0
Intangibles, net	0	0	0
Other assets, net	0	0	0
Total Assets	(7,319,756)	(3,860,738)	(4,176,386)
Current liabilities:
Accounts payable	(27,850)	(14,271)	(9,982)
Accrued expenses	0	0	0
Current portions of long-term debt	0	0	0
Total current liabilities	(27,850)	(14,271)	(9,982)
Intercompany payable, net	(1,290,785)	(655,372)	(1,037,846)
Borrowings under revolving lines of credit, net	0	0	0
Long-term debt, net	0	0	0
Deferred income taxes, net	(19,702)	(30,822)	(58,230)
Long-term obligations under equipment financing and other, net	0	0	0
Other long-term liabilities	0	0	0
Total liabilities	(1,338,337)	(700,465)	(1,106,058)
Convertible preferred stock	0
Total stockholders' equity	(5,981,419)	(3,160,273)	(3,070,328)
Total Liabilities and Stockholders' Equity	$ (7,319,756)	$ (3,860,738)	$ (4,176,386)

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Supplemental Guarantor Information - Condensed Consolidating Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net sales	$ 1,934,951	$ 1,213,894	$ 4,482,555	$ 3,086,802
Cost of products sold	1,441,057	916,140	3,380,531	2,333,504
Gross profit	493,894	297,754	1,102,024	753,298
Operating expense:
Selling, general and administrative	323,194	183,600	858,534	538,288
Depreciation	15,811	8,579	41,640	25,122
Amortization	50,076	20,704	105,339	61,116
Total operating expense	389,081	212,883	1,005,513	624,526
Intercompany charges (income)	0	0	0	0
Income (loss) from operations	104,813	84,871	96,511	128,772
Interest income (expense), financing costs, and other	37,348	13,397	99,486	39,239
Intercompany interest expense (income)	0	0	0	0
Income (loss) before provision for income taxes	67,465	71,474	(2,975)	89,533
Provision for (benefit from) income taxes	18,090	26,815	(53,291)	33,800
Income (loss) before equity in net income of subsidiaries	49,375	44,659	50,316	55,733
Equity in net income of subsidiaries	0	0	0	0
Net income (loss)	49,375	44,659	50,316	55,733
Parent Company [Member]
Net sales	0	0	0	0
Cost of products sold	0	0	0	0
Gross profit	0	0	0	0
Operating expense:
Selling, general and administrative	1,776	72	4,315	15,006
Depreciation	411	335	1,310	1,057
Amortization	0	0	0	0
Total operating expense	2,187	407	5,625	16,063
Intercompany charges (income)	(7,521)	(12,549)	(8,105)	(37,057)
Income (loss) from operations	5,334	12,142	2,480	20,994
Interest income (expense), financing costs, and other	33,416	9,610	90,712	28,947
Intercompany interest expense (income)	(6,809)	(6,724)	(17,698)	(17,406)
Income (loss) before provision for income taxes	(21,273)	9,256	(70,534)	9,453
Provision for (benefit from) income taxes	(6,848)	3,473	(11,796)	3,063
Income (loss) before equity in net income of subsidiaries	(14,425)	5,783	(58,738)	6,390
Equity in net income of subsidiaries	63,800	38,876	109,054	49,343
Net income (loss)	49,375	44,659	50,316	55,733
Guarantor Subsidiaries [Member]
Net sales	1,883,249	1,167,647	4,364,128	2,977,108
Cost of products sold	1,401,045	880,325	3,288,086	2,248,454
Gross profit	482,204	287,322	1,076,042	728,654
Operating expense:
Selling, general and administrative	313,034	176,094	828,987	501,503
Depreciation	14,967	7,823	39,015	22,812
Amortization	49,947	20,561	104,946	60,684
Total operating expense	377,948	204,478	972,948	584,999
Intercompany charges (income)	7,521	11,987	8,105	35,379
Income (loss) from operations	96,735	70,857	94,989	108,276
Interest income (expense), financing costs, and other	3,594	3,586	8,226	9,044
Intercompany interest expense (income)	6,427	6,724	16,552	17,406
Income (loss) before provision for income taxes	86,714	60,547	70,211	81,826
Provision for (benefit from) income taxes	24,356	22,883	(40,891)	31,217
Income (loss) before equity in net income of subsidiaries	62,358	37,664	111,102	50,609
Equity in net income of subsidiaries	0	0	0	0
Net income (loss)	62,358	37,664	111,102	50,609
Non-Guarantor Subsidiaries [Member]
Net sales	51,702	46,247	118,427	109,694
Cost of products sold	40,012	35,815	92,445	85,050
Gross profit	11,690	10,432	25,982	24,644
Operating expense:
Selling, general and administrative	8,384	7,434	25,232	21,779
Depreciation	433	421	1,315	1,253
Amortization	129	143	393	432
Total operating expense	8,946	7,998	26,940	23,464
Intercompany charges (income)	0	562	0	1,678
Income (loss) from operations	2,744	1,872	(958)	(498)
Interest income (expense), financing costs, and other	338	201	548	1,248
Intercompany interest expense (income)	382	0	1,146	0
Income (loss) before provision for income taxes	2,024	1,671	(2,652)	(1,746)
Provision for (benefit from) income taxes	582	459	(604)	(480)
Income (loss) before equity in net income of subsidiaries	1,442	1,212	(2,048)	(1,266)
Equity in net income of subsidiaries	0	0	0	0
Net income (loss)	1,442	1,212	(2,048)	(1,266)
Eliminations and Other [Member]
Net sales	0	0	0	0
Cost of products sold	0	0	0	0
Gross profit	0	0	0	0
Operating expense:
Selling, general and administrative	0	0	0	0
Depreciation	0	0	0	0
Amortization	0	0	0	0
Total operating expense	0	0	0	0
Intercompany charges (income)	0	0	0	0
Income (loss) from operations	0	0	0	0
Interest income (expense), financing costs, and other	0	0	0	0
Intercompany interest expense (income)	0	0	0	0
Income (loss) before provision for income taxes	0	0	0	0
Provision for (benefit from) income taxes	0	0	0	0
Income (loss) before equity in net income of subsidiaries	0	0	0	0
Equity in net income of subsidiaries	(63,800)	(38,876)	(109,054)	(49,343)
Net income (loss)	$ (63,800)	$ (38,876)	$ (109,054)	$ (49,343)

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Supplemental Guarantor Information - Condensed Consolidating Statements of Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net income (loss)	$ 49,375	$ 44,659	$ 50,316	$ 55,733
Other comprehensive income (loss):
Foreign currency translation adjustment	(1,535)	1,730	(3,506)	891
Total other comprehensive income (loss)	(1,535)	1,730	(3,506)	891
Comprehensive income (loss)	47,840	46,389	46,810	56,624
Parent Company [Member]
Net income (loss)	49,375	44,659	50,316	55,733
Other comprehensive income (loss):
Foreign currency translation adjustment	(1,535)	1,730	(3,506)	891
Total other comprehensive income (loss)	(1,535)	1,730	(3,506)	891
Comprehensive income (loss)	47,840	46,389	46,810	56,624
Guarantor Subsidiaries [Member]
Net income (loss)	62,358	37,664	111,102	50,609
Other comprehensive income (loss):
Foreign currency translation adjustment	0	0	0	0
Total other comprehensive income (loss)	0	0	0	0
Comprehensive income (loss)	62,358	37,664	111,102	50,609
Non-Guarantor Subsidiaries [Member]
Net income (loss)	1,442	1,212	(2,048)	(1,266)
Other comprehensive income (loss):
Foreign currency translation adjustment	(1,535)	1,730	(3,506)	891
Total other comprehensive income (loss)	(1,535)	1,730	(3,506)	891
Comprehensive income (loss)	(93)	2,942	(5,554)	(375)
Eliminations and Other [Member]
Net income (loss)	(63,800)	(38,876)	(109,054)	(49,343)
Other comprehensive income (loss):
Foreign currency translation adjustment	1,535	(1,730)	3,506	(891)
Total other comprehensive income (loss)	1,535	(1,730)	3,506	(891)
Comprehensive income (loss)	$ (62,265)	$ (40,606)	$ (105,548)	$ (50,234)

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Supplemental Guarantor Information - Condensed Consolidating Statements of Cash Flows (Detail) - USD ($) $ in Thousands		9 Months Ended
	Jan. 02, 2018	Jun. 30, 2018	Jun. 30, 2017
Net cash provided by (used in) operating activities		$ (1,019)	$ 74,173
Investing Activities
Purchases of property and equipment		(34,978)	(31,882)
Acquisition of businesses, net		(2,715,429)	(128,533)
Proceeds from the sale of assets		750	1,839
Intercompany activity		0	0
Net cash provided by (used in) investing activities		(2,749,657)	(158,576)
Financing Activities
Borrowings under revolving lines of credit		2,122,949	1,721,927
Repayments under revolving lines of credit		(1,631,978)	(1,633,570)
Borrowings under term loan		970,000	0
Repayments under term loan		(443,425)	(3,375)
Repayments under equipment financing facilities and other		(8,604)	(7,780)
Borrowings under senior notes		1,300,000	0
Payment of debt issuance costs	$ (65,800)	(65,788)	0
Proceeds from issuance of convertible preferred stock		400,000	0
Payment of stock issuance costs		(1,279)	0
Payment of dividends on preferred stock		(6,000)	0
Proceeds from issuance of common stock related to equity awards		6,950	9,994
Taxes paid related to net share settlement of equity awards		(3,975)	(1,172)
Intercompany activity		0	0
Net cash provided by (used in) financing activities		2,638,850	86,024
Effect of exchange rate changes on cash and cash equivalents		1,127	48
Net increase (decrease) in cash and cash equivalents		(110,699)	1,669
Cash and cash equivalents, beginning of period		138,250	31,386
Cash and cash equivalents, end of period		27,551	33,055
Parent Company [Member]
Net cash provided by (used in) operating activities		(68,803)	(33,267)
Investing Activities
Purchases of property and equipment		(8,721)	(2,972)
Acquisition of businesses, net		(2,715,429)	(128,533)
Proceeds from the sale of assets		0	0
Intercompany activity		628,948	159,325
Net cash provided by (used in) investing activities		(2,095,202)	27,820
Financing Activities
Borrowings under revolving lines of credit		0	0
Repayments under revolving lines of credit		0	0
Borrowings under term loan		970,000
Repayments under term loan		(443,425)	(3,375)
Repayments under equipment financing facilities and other		0	0
Borrowings under senior notes		1,300,000
Payment of debt issuance costs		(58,266)
Proceeds from issuance of convertible preferred stock		400,000
Payment of stock issuance costs		(1,279)
Payment of dividends on preferred stock		(6,000)
Proceeds from issuance of common stock related to equity awards		6,950	9,994
Taxes paid related to net share settlement of equity awards		(3,975)	(1,172)
Intercompany activity		0	0
Net cash provided by (used in) financing activities		2,164,005	5,447
Effect of exchange rate changes on cash and cash equivalents		0	0
Net increase (decrease) in cash and cash equivalents		0	0
Cash and cash equivalents, beginning of period		0	0
Cash and cash equivalents, end of period		0	0
Guarantor Subsidiaries [Member]
Net cash provided by (used in) operating activities		93,178	108,649
Investing Activities
Purchases of property and equipment		(24,901)	(27,522)
Acquisition of businesses, net		0	0
Proceeds from the sale of assets		724	1,828
Intercompany activity		0	0
Net cash provided by (used in) investing activities		(24,177)	(25,694)
Financing Activities
Borrowings under revolving lines of credit		2,082,972	1,705,434
Repayments under revolving lines of credit		(1,599,839)	(1,624,574)
Borrowings under term loan		0
Repayments under term loan		0	0
Repayments under equipment financing facilities and other		(8,604)	(7,780)
Borrowings under senior notes		0
Payment of debt issuance costs		(7,522)
Proceeds from issuance of convertible preferred stock		0
Payment of stock issuance costs		0
Payment of dividends on preferred stock		0
Proceeds from issuance of common stock related to equity awards		0	0
Taxes paid related to net share settlement of equity awards		0	0
Intercompany activity		(635,244)	(158,899)
Net cash provided by (used in) financing activities		(168,237)	(85,819)
Effect of exchange rate changes on cash and cash equivalents		0	0
Net increase (decrease) in cash and cash equivalents		(99,236)	(2,864)
Cash and cash equivalents, beginning of period		149,799	37,447
Cash and cash equivalents, end of period		50,563	34,583
Non-Guarantor Subsidiaries [Member]
Net cash provided by (used in) operating activities		(8,308)	(2,064)
Investing Activities
Purchases of property and equipment		(1,356)	(1,388)
Acquisition of businesses, net		0	0
Proceeds from the sale of assets		26	11
Intercompany activity		0	0
Net cash provided by (used in) investing activities		(1,330)	(1,377)
Financing Activities
Borrowings under revolving lines of credit		39,977	16,493
Repayments under revolving lines of credit		(32,139)	(8,996)
Borrowings under term loan		0
Repayments under term loan		0	0
Repayments under equipment financing facilities and other		0	0
Borrowings under senior notes		0
Payment of debt issuance costs		0
Proceeds from issuance of convertible preferred stock		0
Payment of stock issuance costs		0
Payment of dividends on preferred stock		0
Proceeds from issuance of common stock related to equity awards		0	0
Taxes paid related to net share settlement of equity awards		0	0
Intercompany activity		2,789	334
Net cash provided by (used in) financing activities		10,627	7,831
Effect of exchange rate changes on cash and cash equivalents		1,127	48
Net increase (decrease) in cash and cash equivalents		2,116	4,438
Cash and cash equivalents, beginning of period		1,582	2,876
Cash and cash equivalents, end of period		3,698	7,314
Eliminations and Other [Member]
Net cash provided by (used in) operating activities		(17,086)	855
Investing Activities
Purchases of property and equipment		0	0
Acquisition of businesses, net		0	0
Proceeds from the sale of assets		0	0
Intercompany activity		(628,948)	(159,325)
Net cash provided by (used in) investing activities		(628,948)	(159,325)
Financing Activities
Borrowings under revolving lines of credit		0	0
Repayments under revolving lines of credit		0	0
Borrowings under term loan		0
Repayments under term loan		0	0
Repayments under equipment financing facilities and other		0	0
Borrowings under senior notes		0
Payment of debt issuance costs		0
Proceeds from issuance of convertible preferred stock		0
Payment of stock issuance costs		0
Payment of dividends on preferred stock		0
Proceeds from issuance of common stock related to equity awards		0	0
Taxes paid related to net share settlement of equity awards		0	0
Intercompany activity		632,455	158,565
Net cash provided by (used in) financing activities		632,455	158,565
Effect of exchange rate changes on cash and cash equivalents		0	0
Net increase (decrease) in cash and cash equivalents		(13,579)	95
Cash and cash equivalents, beginning of period		(13,131)	(8,937)
Cash and cash equivalents, end of period		$ (26,710)	$ (8,842)

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Subsequent Events - Additional Information (Detail) - Atlas Supply, Inc. [Member] - Subsequent Event [Member] $ in Millions	Jul. 16, 2018 USD ($) Branch
Subsequent Event [Line Items]
Date of acquisition	Jul. 16, 2018
Number of branches | Branch	6
Annual sales | $	$ 37