PEABODY, Mass., Feb 06, 2009 (BUSINESS WIRE) -- Beacon Roofing Supply, Inc. (the "Company") (NASDAQ: BECN) announced
results today for its fiscal year 2009 first quarter ended December 31,
2008 ("2008").
- Record first quarter sales and income.
- Net sales of $463 million, up 16%.
- EPS of $0.41, up 242%.
- Gross margin of 25.0% vs. 23.0%.
Sales increased 16.3% to $463.3 million in 2008 from $398.4 million in
last year's first quarter ended December 31, 2007 ("2007"). Residential
roofing sales increased 58.5% while non-residential (commercial) roofing
and complementary product sales declined 4.7% and 17.5%, respectively.
Residential roofing sales benefited from year-over-year price increases
as well as from strong re-roofing activity in markets that were affected
by Hurricane Ike. Non-residential sales slowed due, in part, to early
winter conditions in the Company's markets that have the largest
concentration of commercial business. Complementary product sales
continued to be negatively impacted by both the slowdown in the economy
and lower levels of new construction.
The Company's net income for the first quarter was $18.6 million
compared to $5.2 million in 2007, an increase of 256%. Diluted net
income per share increased 242% to $0.41 compared to $0.12 in 2007.
Gross profit in the first quarter was $116.0 million, up $24.3 million
from 2007. The gross margin rate increased to 25.0% from 23.0% last year
primarily due to the sales mix shift to more residential roofing
products, which have substantially higher gross margins than the more
competitive non-residential market. In addition,the Company
realized a benefit from lower weighted-average costs of residential
roofing products in comparison to the price levels of those products in
the marketplace.
Operating expenses increased $2.4 million, or 3.2%, primarily due to an
increase in payroll and related costs resulting from higher
incentive-based pay accruals and less favorable medical insurance claims
experience. As a percentage of net sales, operating expenses declined to
16.9% from 19.1% due to the leveraging of fixed costs over the higher
sales.
The Company realized operating income of $37.7 million in the first
quarter compared to $15.8 million in 2007. As a percentage of net sales,
operating income was 8.1% compared to 4.1%.
Interest expense decreased $0.9 million, or 12.3%, due primarily to a
paydown of debt since 2007 and lower average interest rates. The income
tax provision rate was 40.9% compared to 40.2% last year.
Earnings before interest, taxes, depreciation and amortization, and
stock-based compensation or "Adjusted EBITDA," which is reconciled to
net income in this press release, was $46.6 million in the first quarter
compared to $26.0 million in 2007.
Cash flow from operations was $5.0 million in 2008 compared to $2.8
million in 2007. This increase was primarily attributable to the
increase in operating income, which, in turn, was mostly offset by the
impact of income tax payments and early payments to certain vendors in
this year's first quarter.
Robert Buck, the Company's Chairman & Chief Executive Officer, stated:
"We had an excellent first quarter, which included some short-term
benefits and provided a good start to fiscal 2009, during which we
expect to continue to face difficult economic conditions. I am proud of
our ability to service our customers efficiently and execute our
business strategies successfully, including the control of inventories,
bad debts and other expenses, which helped yield our strong sales and
income growth. We have managed our working capital effectively and
continue to pay down our debt, further strengthening our balance sheet.
We believe we will be in very good shape once the economy begins to
turn."
There will be a conference call to discuss the fourth-quarter and annual
results this morning at 10 a.m. EDT. The dial-in number is 877-874-1571
(international dial-in number 719-325-4820). To assure timely access,
participants should call in before 10:00 a.m.
Within two hours after the call, a webcast of the call will be available
on the "Events & Presentations" page of the "Investor Relations" section
of the Company's web site at http://www.beaconroofingsupply.com.
A replay of the conference call will also be available at 888-203-1112
(participant passcode 4897818) (international dial-in number
719-457-0820 with same passcode) for a week following the call.
Beacon Roofing Supply, Inc. is a leading distributor of roofing
materials and complementary building products operating 171 branches in
35 states in the United States and 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 "Risk
Factors" 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.
BECN-F
|
|
| BEACON ROOFING SUPPLY, INC |
| Condensed Consolidated Statements of Operations |
| |
| |
| | |
| |
| |
| | | | | | | | | |
|
| Unaudited | | | Three Months Ended |
| (Dollars in thousands, except per share data) | | December 31, 2008 |
| % of Net Sales | | December 31, 2007 |
| % of Net Sales |
| | | | | | | | | |
|
| | | | | | | | | |
|
|
Net sales
| | |
$
|
463,329
| |
100.0
|
%
| | |
$
|
398,396
| |
100.0
|
%
|
|
Cost of products sold
| | |
|
347,331
|
|
75.0
|
%
| | |
|
306,702
|
|
77.0
|
%
|
|
Gross profit
| | | |
115,998
| |
25.0
|
%
| | | |
91,694
| |
23.0
|
%
|
| | | | | | | | | |
|
|
Operating expenses
| | |
|
78,323
|
|
16.9
|
%
| | |
|
75,917
|
|
19.1
|
%
|
| | | | | | | | | |
|
|
Income from operations
| | | |
37,675
| |
8.1
|
%
| | | |
15,777
| |
4.1
|
%
|
| | | | | | | | | |
|
|
Interest expense
| | |
|
6,149
|
|
1.3
|
%
| | |
|
7,009
|
|
1.8
|
%
|
| | | | | | | | | |
|
|
Income before income taxes
| | |
31,526
| |
6.8
|
%
| | | |
8,768
| |
2.2
|
%
|
|
Income taxes
| | |
|
12,884
|
|
2.8
|
%
| | |
|
3,527
|
|
0.9
|
%
|
| | | | | | | | | |
|
|
Net income
| | |
$
|
18,642
|
|
4.0
|
%
| | |
$
|
5,241
|
|
1.3
|
%
|
| | | | | | | | | |
|
|
Net income per share:
| | | | | | | | | | |
Basic
| |
$
|
0.42
| | | | |
$
|
0.12
| | |
Diluted
| |
$
|
0.41
| | | | |
$
|
0.12
| | |
| | | | | | | | | |
|
|
Weighted average shares used in computing net income per share:
| | | | | | | | | |
| | | | | | | |
|
Basic
| |
|
44,822,561
| | | | |
|
44,273,312
| | |
Diluted
| |
|
45,316,255
| | | | |
|
44,852,748
| | |
|
|
| BEACON ROOFING SUPPLY, INC |
| Condensed Consolidated Balance Sheets |
|
| |
| |
| |
| | | | | |
|
| Unaudited | |
| |
| |
|
(Dollars in thousands) | | December 31, 2008 |
| December 31, 2007 |
| September 30, 2008 |
| | | | | |
|
| Assets | | | | | | |
|
Current assets:
| | | | | | |
|
Cash and cash equivalents
| |
$
|
22,059
| | |
$
|
7,321
| |
$
|
26,038
| |
|
Accounts receivable, net
| | |
196,773
| | | |
189,186
| | |
283,652
| |
|
Inventories
| | |
188,462
| | | |
173,020
| | |
209,255
| |
|
Prepaid expenses and other assets
| | |
46,812
| | | |
38,543
| | |
45,799
| |
|
Deferred income taxes
| |
|
22,824
|
|
|
|
15,394
|
|
|
18,126
|
|
|
Total current assets
| | |
476,930
| | | |
423,464
| | |
582,870
| |
| | | | | |
|
|
Property and equipment, net
| | |
53,681
| | | |
65,706
| | |
56,712
| |
|
Goodwill
| | |
352,693
| | | |
355,176
| | |
354,269
| |
|
Other assets, net
| |
|
70,368
|
|
|
|
89,804
|
|
|
73,965
|
|
| | | | | |
|
|
Total assets
| |
$
|
953,672
|
|
|
$
|
934,150
|
|
$
|
1,067,816
|
|
| | | | | |
|
| | | | | |
|
| Liabilities and stockholders' equity | | | | | | |
|
Current liabilities:
| | | | | | |
|
Accounts payable
| |
$
|
100,084
| | |
$
|
106,667
| |
$
|
198,429
| |
|
Accrued expenses
| | |
67,685
| | | |
55,728
| | |
89,755
| |
|
Current portion of long-term obligations
| |
|
15,028
|
|
|
|
34,112
|
|
|
19,926
|
|
|
Total current liabilities
| | |
182,797
| | | |
196,507
| | |
308,110
| |
| | | | | |
|
|
Senior notes payable and other obligations, net of current portion
| | |
355,657
| | | |
373,057
| | |
357,643
| |
|
Deferred income taxes
| | |
35,093
| | | |
36,499
| | |
35,362
| |
| | | | | |
|
|
Stockholders' equity:
| | | | | | |
|
Common stock
| | |
448
| | | |
443
| | |
448
| |
|
Additional paid-in capital
| | |
221,008
| | | |
212,932
| | |
219,669
| |
|
Retained earnings
| | |
165,588
| | | |
111,881
| | |
146,946
| |
|
Accumulated other comprehensive income (loss)
| |
|
(6,919
|
)
|
|
|
2,831
|
|
|
(362
|
)
|
|
Total stockholders' equity
| |
|
380,125
|
|
|
|
328,087
|
|
|
366,701
|
|
| | | | | |
|
|
Total liabilities and stockholders' equity
| |
$
|
953,672
|
|
|
$
|
934,150
|
|
$
|
1,067,816
|
|
|
|
| BEACON ROOFING SUPPLY, INC |
| Condensed Consolidated Statements of Cash Flows |
|
| |
|
| |
| | | | |
|
| | Three Months Ended |
| Unaudited | |
| | |
|
| (In thousands) | | December 31, 2008 |
|
| December 31, 2007 |
| | | | |
|
| Operating activities: | | | | | |
|
Net income
| |
$
|
18,642
| | | |
$
|
5,241
| |
|
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | |
| | | |
|
|
Depreciation and amortization
| | |
7,722
| | | | |
8,891
| |
|
Stock-based compensation
| | |
1,195
| | | | |
1,365
| |
|
Deferred income taxes
| | |
(2,531
|
)
| | | |
(552
|
)
|
|
Changes in assets and liabilities:
| | | | | |
|
Accounts receivable
| | |
84,166
| | | | |
78,025
| |
|
Inventories
| | |
19,222
| | | | |
(7,340
|
)
|
|
Prepaid expenses and other assets
| | |
(1,305
|
)
| | | |
(5,877
|
)
|
|
Accounts payable and accrued expenses
| |
|
(122,090
|
)
|
|
|
|
(76,940
|
)
|
|
Net cash provided by operating activities
| |
|
5,021
|
|
|
|
|
2,813
|
|
| | | | |
|
| Investing activities: | | | | | |
|
Purchases of property and equipment
| |
|
(2,033
|
)
|
|
|
|
(1,084
|
)
|
|
Net cash used in investing activities
| |
|
(2,033
|
)
|
|
|
|
(1,084
|
)
|
| | | | |
|
| Financing activities: | | | | | |
|
Repayments under revolving lines of credit, net
| | |
(4,662
|
)
| | | |
(657
|
)
|
|
Net repayments under senior notes payable and other
| | |
(2,287
|
)
| | | |
(971
|
)
|
|
Proceeds from exercise of options
| | |
138
| | | | |
-
| |
|
Income tax benefit from stock-based compensation deductions in
excess of the associated compensation costs
| | | | | |
|
|
6
|
|
|
|
|
-
|
|
|
Net cash used by financing activities
| | |
(6,805
|
)
| | | |
(1,628
|
)
|
| | | | |
|
|
Effect of exchange rate changes on cash
| |
|
(162
|
)
|
|
|
|
751
|
|
Net (decrease) in cash and cash equivalents
| | |
(3,979
|
)
| | | |
852
| |
|
Cash and cash equivalents at beginning of period
| |
|
26,038
|
|
|
|
|
6,469
|
|
|
Cash and cash equivalents at end of period
| |
$
|
22,059
|
|
|
|
$
|
7,321
|
|
|
|
| BEACON ROOFING SUPPLY, INC |
| Consolidated Sales by Product Line |
|
| |
|
| |
|
| |
|
| |
|
| |
| |
| Unaudited | | | | | | | | | | | | | | | | |
| | For the Three Months Ended: | | | | | | | | | | | |
| | | | | | | | | | | | |
| | |
|
| | December 31, 2008 | | | December 31, 2007 | | | | | |
| (dollars in millions) | | Net Sales | | | Mix % | | | Net Sales | | | Mix % | | | Change |
|
Residential roofing products
| |
$
|
234.6
| | |
50.6
|
%
| | |
$
|
148.0
| | |
37.1
|
%
| | |
$
|
86.6
| | |
58.5
|
%
|
|
Non-residential roofing products
| | |
164.7
| | |
35.5
|
%
| | | |
172.8
| | |
43.4
|
%
| | | |
(8.1
|
)
| |
-4.7
|
%
|
|
Complementary building products
| |
|
64.0
| | |
13.8
|
%
| | |
|
77.6
| | |
19.5
|
%
| | |
|
(13.6
|
)
| |
-17.5
|
%
|
| | | | | | | | | | | | | | | |
|
| |
$
|
463.3
| | |
100.0
|
%
| | |
$
|
398.4
| | |
100.0
|
%
| | |
$
|
64.9
|
| |
16.3
|
%
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
Sales By Business Day During the Three Months Ended: |
| | | | | | | | | | | | | | | |
|
| | December 31, 2008 | | | December 31, 2007 | | | | | |
| (dollars in millions) | | Net Sales | | | Mix % | | | Net Sales | | | Mix % | | | Change |
|
Residential roofing products
| |
$
|
3.782
| | |
50.6
|
%
| | |
$
|
2.427
| | |
37.2
|
%
| | |
$
|
1.355
| | |
55.8
|
%
|
|
Non-residential roofing products
| | |
2.657
| | |
35.6
|
%
| | | |
2.833
| | |
43.4
|
%
| | | |
(0.176
|
)
| |
-6.2
|
%
|
|
Complementary building products
| |
|
1.034
| | |
13.8
|
%
| | |
|
1.272
| | |
19.5
|
%
| | |
|
(0.238
|
)
| |
-18.7
|
%
|
| | | | | | | | | | | | | | | |
|
| |
$
|
7.473
| | |
100.0
|
%
| | |
$
|
6.532
| | |
100.0
|
%
| | |
$
|
0.941
|
| |
14.4
|
%
|
| | | | | | | | | | | | | | | |
|
|
Note: Some totals above may not foot due to rounding.
|
|
|
| BEACON ROOFING SUPPLY, INC |
| Earnings Before Interest, Taxes, Depreciation and Amortization
and Stock-Based Compensation ("Adjusted EBITDA") |
| Unaudited |
|
| |
| |
| |
| (Dollars in thousands, except per share data) | | |
| | | | |
|
| | | Three Months Ended December 31, |
| | | 2008 | | 2007 |
| | | | |
|
|
Net income
| |
$
|
18,642
| |
$
|
5,241
|
|
Interest expense
| | |
6,149
| | |
7,009
|
|
Income taxes
| | |
12,884
| | |
3,527
|
|
Depreciation and amortization
| | |
7,722
| | |
8,891
|
|
Stock-based compensation
| |
|
1,195
| |
|
1,365
|
| | | | |
|
|
Adjusted EBITDA (1)
| |
$
|
46,592
| |
$
|
26,033
|
|
|
(1) Adjusted EBITDA is defined as net income plus interest
expense (net of interest income), income taxes, depreciation and
amortization and stock-based compensation (i.e. stock option
expense). EBITDA is a measure commonly used in the distribution
industry, and we present Adjusted EBITDA to enhance your
understanding of our operating performance. Adjusted EBITDA is
used in our bank covenants and we use Adjusted EBITDA as an
internal performance measurement and as one criterion for
evaluating our performance relative to that of our peers. We
believe that Adjusted EBITDA is an operating performance measure
that provides investors and analysts with a measure of operating
results unaffected by differences in capital structures, capital
investment cycles, and ages of related assets among otherwise
comparable companies. Further, we believe that Adjusted EBITDA is
a useful measure because it improves comparability of results of
operations, since purchase accounting used for acquisitions can
render depreciation and amortization non-comparable between
periods. Management uses these supplemental measures to evaluate
performance period over period and to analyze the underlying
trends in the Company's business and to establish operational
goals and forecasts that are used in allocating resources. We
expect to compute our non-GAAP financial measures using the same
consistent method from quarter to quarter and year to year.
|
While we believe Adjusted EBITDA is a useful measure for
investors, it is not a measurement presented in accordance with
United States generally accepted accounting principles, or GAAP.
You should not consider Adjusted EBITDA in isolation or as a
substitute for net income, cash flows from operations, or any
other items calculated in accordance with GAAP. In addition,
Adjusted EBITDA has inherent material limitations as a performance
measure. It does not include interest expense and, because we have
borrowed money, interest expense is a necessary element of our
costs. In addition, Adjusted EBITDA does not include depreciation
and amortization expense. Because we have capital and intangible
assets, depreciation and amortization expense is a necessary
element of our costs. Adjusted EBITDA also does not include
stock-based compensation, which is a necessary element of our
costs since we provide stock options to key members of management
as an important incentive to maximize overall company performance
and as a benefit. Moreover, Adjusted EBITDA does not include
taxes, and payment of taxes is a necessary element of our
operations. Accordingly, since Adjusted EBITDA excludes these
items, it has material limitations as a performance measure. The
Company's management separately monitors capital expenditures,
which impact depreciation expense, as well as amortization
expense, interest expense, and income tax expense. Because not all
companies use identical calculations, our presentation of Adjusted
EBITDA may not be comparable to other similarly titled measures of
other companies.
|
SOURCE: Beacon Roofing Supply, Inc.
Beacon Roofing Supply, Inc.
Dave Grace, CFO, 978-535-7668 x14
dgrace@beaconroofingsupply.com
Copyright Business Wire 2009