PEABODY, Mass.--(BUSINESS WIRE)--Feb. 14, 2005--Beacon Roofing
Supply, Inc. (Nasdaq: BECN) announced today record performance for the
first fiscal 2005 quarter ended December 31, 2004.
Sales increased 18.2% to a record $199.2 million in the first
quarter of fiscal 2005 ("2005") from $168.6 million in fiscal 2004
("2004"), reflecting strong internal growth of 15.8%, with especially
robust sales of non-residential roofing and complementary building
products. JGA Corp. ("JGA"), acquired in mid-December, contributed the
remaining sales increase.
Gross profit increased 17.6% to $50.3 million in 2005 from $42.8
million in 2004. Gross margin as a percentage of net sales declined
slightly from 25.4% to 25.3% due to the inclusion of JGA and its
product mix. Importantly, the Company's gross margins in existing
markets improved to 25.5% in 2005 from 25.4% in 2004.
Selling, general and administrative (SG&A) expenses increased $4.4
million or 15.5% in 2005 compared to 2004. The increase was primarily
due to higher transportation and payroll costs associated with the
sales volume increase. As a percentage of net sales, SG&A expenses
declined to 16.5% in 2005 from 16.9% in 2004. The Company continues to
be diligent in controlling its SG&A expenses.
Operating income increased 20.5% to a record $17.3 million in 2005
from $14.4 million in 2004. As a percentage of net sales, operating
income increased to 8.7% from 8.5%. Interest expense declined $2.6
million to $0.9 million in 2005, primarily from a lower debt level
after the Company's initial public offering ("IPO").
The Company achieved record first-quarter net income of $8.7
million in 2005 compared to net income of $3.1 million in 2004. Net
income in 2005 included a $0.9 million charge for the early of
retirement of debt, while the 2004 net income included a $2.9 million
charge for the change in the value of the Company's warrant
derivatives. All of the warrants were redeemed with the proceeds of
our IPO on September 28, 2004 and we will not incur future charges for
these derivatives.
Diluted net income per share for the first quarter was $0.32 in
2005 compared to $0.17 per share in 2004.
Cash flow from operations was $12.8 million in the first quarter
of 2005 compared to $7.5 million in 2004. The Company used a portion
of its cash from operations to increase inventories by $7.2 million,
partially in anticipation of some price increases and temporary
product shortages.
The Company's IPO was completed on September 22, 2004 and the
proceeds were received on September 28, 2004, a few days after the
Company's fiscal 2004 year-end. The IPO proceeds were utilized to pay
off notes payable, redeem the warrants and pay down revolving lines of
credit. In December, the Company borrowed approximately $30 million
under its revolving lines of credit to acquire JGA.
Robert Buck, the Company's President & Chief Executive Officer,
stated, "We had a terrific first quarter that exceeded our
expectations and included the successful acquisition of JGA that has
provided us access to the strong Florida and Georgia markets. Our
employees' focus on providing our customers with high-quality services
and products continues to be the foundation of our operational
success. We will also continue to look for opportunistic business
acquisitions such as JGA. We believe there is substantial room for
growth."
Beacon Roofing Supply will be holding its investor conference call
today, February 14, 2005, at 11:30 a.m. Eastern Time. The
dial-in-number is 800-638-4930 (Participant Passcode 31727549). Please
call five to ten minutes prior to the scheduled start-time to assure
timely access to the call.
About Beacon Roofing Supply Inc.:
Beacon Roofing Supply, Inc. is a leading distributor of roofing
materials and complementary building products in key metropolitan
markets in the Northeast, Mid-Atlantic, Southeast and Southwest
regions of the United States and in Eastern Canada.
Forward-Looking Statements:
This release contains information about management's view of the
Company's future expectations, plans and prospects that constitute
forward-looking statements for purposes of the safe harbor provisions
under The Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those indicated by such
forward-looking statements as a result of various important factors,
including, but not limited to, those set forth in the "Risks Relating
to Our Business and Industry" section of the Company's latest Form
10-K. In addition, the forward-looking statements included in this
press release represent the Company's views as of the date of this
press release and these views could change. However, while the Company
may elect to update these forward-looking statements at some point,
the Company specifically disclaims any obligation to do so other than
as required by federal securities laws. These forward-looking
statements should not be relied upon as representing the Company's
views as of any date subsequent to the date of this press release.
BEACON ROOFING SUPPLY, INC.
Consolidated Statements of Income
----------------------------------------------------------------------
Three Months Ended
------------------------------------
Unaudited
(Dollars in thousands, except per December 31, December 31,
share data) 2004 2003
---------------------------------- ----------------- -----------------
Net sales $ 199,190 100.0%$ 168,586 100.0%
Cost of products sold 148,844 74.7% 125,783 74.6%
----------------- -----------------
Gross profit 50,346 25.3% 42,803 25.4%
Operating expenses:
Selling, general and
administrative expenses 32,840 16.5% 28,422 16.9%
Stock-based compensation 173 0.1% - -
----------------- -----------------
33,013 16.6% 28,422 16.9%
Income from operations 17,333 8.7% 14,381 8.5%
Other expense:
Interest expense 866 0.4% 2,799 1.7%
Interest expense-related party 26 - 742 0.4%
Change in value of warrant
derivatives - - 2,920 1.7%
Loss on early retirement of
debt 915 0.5% - -
----------------- -----------------
1,807 0.9% 6,461 3.8%
Income before income taxes 15,526 7.8% 7,920 4.7%
Income taxes 6,783 3.4% 4,774 2.8%
----------------- -----------------
Net income $ 8,743 4.4%$ 3,146 1.9%
================= =================
Net income per share:
Basic $ 0.33 $ 0.18
=========== ===========
Diluted $ 0.32 $ 0.17
=========== ===========
Weighted average shares used in
computing net income per share:
Basic 26,359,127 17,787,583
=========== ===========
Diluted 27,303,725 18,184,984
=========== ===========
BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Balance Sheets
----------------------------------------------------------------------
(Unaudited) (Unaudited)
(Dollars in thousands, December 31, December 31, September 25,
except per share data) 2004 2003 2004
--------------------------- ------------------------------------------
Assets
Current assets:
Cash $ 4,900 $ 6,195 $ -
Accounts receivable,
less allowance of
$3,511 at 12/04,
$2,995 at 12/03
and $2,958 at 9/04 for
doubtful accounts 93,194 72,382 93,824
Inventories 82,750 60,604 68,573
Prepaid expenses and
other assets 22,140 14,102 14,974
Deferred income taxes 3,228 2,317 3,223
-------------- -------------- ------------
Total current assets 206,212 155,600 180,594
Property and equipment,
net 27,367 23,847 25,101
Goodwill, net 104,375 93,991 94,162
Other assets 13,196 2,805 1,641
-------------- -------------- ------------
Total assets $ 351,150 $ 276,243 $ 301,498
============== ============== ============
Liabilities and stockholders' equity
Current liabilities:
Cash overdraft $ - $ - $ 3,694
Borrowings under
revolving lines of
credit 52,178 60,286 44,592
Accounts payable 83,595 50,068 74,043
Accrued expenses 26,487 23,777 21,524
Warrant derivative
liability - 4,557 34,335
Current portions of
long-term debt and
capital lease
obligations 6,158 7,950 6,152
-------------- -------------- ------------
Total current liabilities 168,418 146,638 184,340
Senior notes payable and
other obligations, net of
current portion 21,825 68 22,660
Junior subordinated notes
payable - 35,914 17,071
Subordinated notes payable
to related parties - 27,689 29,442
Deferred income taxes 8,819 8,829 8,764
Long-term obligations
under capital leases, net
of current portions 895 1,105 976
Warrant derivative
liabilities - 10,291 -
Commitments and
contingencies
Stockholders' equity:
Class A Common Stock - 180 -
Class B Common Stock 266 - 266
Additional paid-in
capital 140,067 26,033 140,067
Deferred compensation (517) - (690)
Treasury stock (515) (515) (515)
Retained earnings
(deficit) 7,876 17,633 (867)
Common Stock
subscription
receivable - - (102,765)
Accumulated other
comprehensive income 4,016 2,378 2,749
-------------- -------------- ------------
Total stockholders' equity 151,193 45,709 38,245
-------------- -------------- ------------
Total liabilities and
stockholders' equity $ 351,150 $ 276,243 $ 301,498
============== ============== ============
BEACON ROOFING SUPPLY, INC.
Consolidated Statements of Cash Flows
----------------------------------------------------------------------
Three Months Ended
---------------------------
Unaudited December 31, December 31,
(In thousands) 2004 2003
------------------------------------------ --------------------------
Operating activities
Net income $ 8,743 $ 3,146
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,810 1,651
Deferred interest - 1,261
Stock-based compensation 173 -
Change in value of warrant derivatives - 2,920
Loss on early retirement of debt 915 -
Changes in operating assets and
liabilities, net of the effects of
businesses acquired:
Accounts receivable 12,215 15,174
Inventories (7,167) (5,294)
Prepaid expenses and other assets (3,526) (3,480)
Accounts payable and accrued
expenses (408) (7,908)
---------------------------
Net cash provided by operating activities 12,755 7,470
Investing activities
Purchases of property and equipment, net
of sale proceeds (910) (109)
Acquisition of business, net of cash
acquired (30,357) -
---------------------------
Net cash used in investing activities (31,267) (109)
Financing activities
Net borrowings under revolving lines of
credit 7,278 132
Repayment under senior notes payable, and
other (912) (1,370)
Redemption of warrants (34,335) -
Repayment of junior subordinated notes (17,986) -
Repayment of subordinated
notes payable to related parties (29,442) -
Proceeds from IPO 102,765 -
Deferred financing costs (238) -
---------------------------
Net cash provided by (used in) financing
activities 27,130 (1,238)
Effect of exchange rate changes on cash (24) 8
---------------------------
Net increase in cash 8,594 6,131
Cash (overdraft)at beginning of year (3,694) 64
---------------------------
Cash at end of period $ 4,900 $ 6,195
===========================
Non-cash transactions
Capital lease additions $ - $ 703
CONTACT: Beacon Roofing Supply, Inc.
Dave Grace, 978-535-7668
SOURCE: Beacon Roofing Supply, Inc.