PEABODY, Mass., May 07, 2010 (BUSINESS WIRE) -- Beacon Roofing Supply, Inc. (the "Company") (NASDAQ: BECN) announced
results today for its fiscal 2010 second quarter and six months (first
half) ended March 31, 2010.
Robert Buck, the Company's Chairman & Chief Executive Officer, stated:
"Our second quarter results fell short of our expectations, although the
rate of our sales decline was much less in the second quarter than in
the first quarter. We began to see a stronger business trend in most
regions late in the quarter and into the third quarter. Severe winter
weather conditions in several markets limited the levels of roofing and
remodeling activities in the second quarter and put additional pressure
on our gross margin. We also faced strong prior year results, which
benefitted from storm business. However, we reduced our expenses, made
an early payment on our debt, became more active with our acquisition
program, and saw some encouraging signs in the economy, all of which
should help set us up for a stronger second half."
Second Quarter
Sales declined 10.6% to $285.4 million in 2010 from $319.3 million in
2009. Residential roofing sales decreased 17.0% while non-residential
roofing and complementary product sales declined 4.4% and 0.6%,
respectively. All three major product lines were impacted by tougher
winter weather and economic conditions this year and by continued low
levels of new construction and remodeling. Residential roofing sales
were also up against a 37.2% increase in 2009, which resulted from
higher average prices and strong re-roofing activity in storm-affected
regions, especially from Hurricane Ike in Texas.
Net loss for the second quarter was $6.5 million compared to a loss of
$2.4 million in 2009. Net loss per share was $0.14 compared to $0.05 in
2009. The higher net loss was due to the decline in sales and a lower
gross margin rate, partially offset by lower expenses.
Earnings before interest, taxes, depreciation and amortization, and
stock-based compensation or "Adjusted EBITDA," which is reconciled to
the net income (loss) in this press release, was $2.1 million in 2010
compared to $10.2 million in 2009, a decline of 79.7%.
First Half
Sales declined 16.6% to $653.1 million in 2010 from $782.6 million in
2009. Residential roofing sales decreased 22.3% while non-residential
roofing and complementary product sales declined 11.3% and 8.1%,
respectively. First half 2010 sales were influenced primarily by the
same factors discussed above for the second quarter.
Net income for the first half was $1.4 million compared to $16.2 million
in 2009. Net income per share was $0.03 compared to $0.36 in 2009. The
lower net income was due to the decline in sales and a lower gross
margin rate, partially offset by lower expenses.
Adjusted EBITDA was $29.1 million in 2010 compared to $56.8 million in
2009, a decline of 48.7%.
Cash flow from operations was $25.6 million compared to $84.8 million in
2009. This year's first half cash flows were influenced by the lower
operating profit, an inventory increase and a lower decrease in accounts
receivable, partially offset by the benefit from a smaller reduction in
accounts payable and accrued expenses, including the impact of less
income tax payments. There was $89.9 million of cash on hand at the end
of this year's first half compared to $98.1 million at March 31, 2009.
The Company will host a webcast and conference call today at 10:00 a.m.
ET to discuss these results. The live webcast of the call, along with a
webcast replay after the call, can be accessed at http://ir.beaconroofingsupply.com/events.cfm
(the "Events & Presentations" page of the "Investor Relations" section
of the Company's web site). There will be a slide presentation of the
results available on that page of the website as well. For those unable
to connect to the Internet or who may wish to ask questions, the
conference call dial-in number is 720-545-0063. To assure timely access,
call participants should call in before 10:00 a.m.
Beacon Roofing Supply, Inc. is a leading distributor of roofing
materials and complementary building products, operating 177 branches in
37 states in the United States and in three provinces in Eastern Canada.
SOURCE: Beacon Roofing Supply, Inc.
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
|
|
Six Months Ended
|
(Dollars in thousands, except per share data)
|
|
March 31, 2010
|
|
% of Net Sales
|
|
March 31, 2009
|
|
% of Net Sales
|
|
March 31, 2010
|
|
% of Net Sales
|
|
March 31, 2009
|
|
% of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
285,366
|
|
100.0%
|
|
$
|
319,303
|
|
100.0%
|
|
$
|
653,087
|
|
100.0%
|
|
$
|
782,632
|
|
100.0%
|
Cost of products sold
|
|
|
224,302
|
|
78.6%
|
|
|
245,025
|
|
76.7%
|
|
|
503,682
|
|
77.1%
|
|
|
592,356
|
|
75.7%
|
Gross profit
|
|
|
|
61,064
|
|
21.4%
|
|
|
74,278
|
|
23.3%
|
|
|
149,405
|
|
22.9%
|
|
|
190,276
|
|
24.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
67,051
|
|
23.5%
|
|
|
72,820
|
|
22.8%
|
|
|
136,880
|
|
21.0%
|
|
|
151,143
|
|
19.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
(5,987)
|
|
-2.1%
|
|
|
1,458
|
|
0.5%
|
|
|
12,525
|
|
1.9%
|
|
|
39,133
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
5,499
|
|
1.9%
|
|
|
5,589
|
|
1.8%
|
|
|
11,086
|
|
1.7%
|
|
|
11,738
|
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(11,486)
|
|
-4.0%
|
|
|
(4,131)
|
|
-1.3%
|
|
|
1,439
|
|
0.2%
|
|
|
27,395
|
|
3.5%
|
Income tax expense (benefit)
|
|
|
(5,030)
|
|
-1.8%
|
|
|
(1,688)
|
|
-0.5%
|
|
|
68
|
|
0.0%
|
|
|
11,196
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(6,456)
|
|
-2.3%
|
|
|
(2,443)
|
|
-0.8%
|
|
$
|
1,371
|
|
0.2%
|
|
$
|
16,199
|
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.14)
|
|
|
|
$
|
(0.05)
|
|
|
|
$
|
0.03
|
|
|
|
$
|
0.36
|
|
|
Diluted
|
|
$
|
(0.14)
|
|
|
|
$
|
(0.05)
|
|
|
|
$
|
0.03
|
|
|
|
$
|
0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
45,397,905
|
|
|
|
|
44,941,782
|
|
|
|
|
45,338,943
|
|
|
|
|
44,881,846
|
|
|
Diluted
|
|
|
45,397,905
|
|
|
|
|
44,941,782
|
|
|
|
|
45,830,171
|
|
|
|
|
45,339,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEACON ROOFING SUPPLY, INC
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
March 31, 2010
|
|
March 31, 2009
|
|
September 30, 2009
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
89,869
|
|
$
|
98,106
|
|
|
$
|
82,742
|
|
Accounts receivable, net
|
|
162,080
|
|
|
166,939
|
|
|
|
227,379
|
|
Inventories
|
|
220,163
|
|
|
207,042
|
|
|
|
195,011
|
|
Prepaid expenses and other assets
|
|
55,835
|
|
|
45,045
|
|
|
|
52,714
|
|
Deferred income taxes
|
|
16,342
|
|
|
22,664
|
|
|
|
19,323
|
|
Total current assets
|
|
544,289
|
|
|
539,796
|
|
|
|
577,169
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
48,329
|
|
|
51,850
|
|
|
|
52,965
|
|
Goodwill
|
|
358,749
|
|
|
352,319
|
|
|
|
354,193
|
|
Other assets, net
|
|
52,350
|
|
|
67,093
|
|
|
|
56,459
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
1,003,717
|
|
$
|
1,011,058
|
|
|
$
|
1,040,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
|
130,012
|
|
$
|
158,166
|
|
|
$
|
151,683
|
|
Accrued expenses
|
|
60,750
|
|
|
70,226
|
|
|
|
75,536
|
|
Current portion of long-term obligations
|
|
8,639
|
|
|
15,066
|
|
|
|
15,092
|
|
Total current liabilities
|
|
199,401
|
|
|
243,458
|
|
|
|
242,311
|
|
|
|
|
|
|
|
|
Senior notes payable and other obligations, net of current portion
|
|
333,826
|
|
|
353,674
|
|
|
|
338,347
|
|
Deferred income taxes
|
|
36,034
|
|
|
34,858
|
|
|
|
36,555
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Common stock
|
|
455
|
|
|
451
|
|
|
|
452
|
|
Additional paid-in capital
|
|
231,690
|
|
|
222,982
|
|
|
|
226,793
|
|
Retained earnings
|
|
200,735
|
|
|
163,145
|
|
|
|
199,364
|
|
Accumulated other comprehensive income (loss)
|
|
1,576
|
|
|
(7,510
|
)
|
|
|
(3,036
|
)
|
Total stockholders' equity
|
|
434,456
|
|
|
379,068
|
|
|
|
423,573
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
1,003,717
|
|
$
|
1,011,058
|
|
|
$
|
1,040,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEACON ROOFING SUPPLY, INC
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
Unaudited
|
|
March 31, 2010
|
|
March 31, 2009
|
(In thousands)
|
|
|
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
Net income
|
|
$
|
1,371
|
|
|
$
|
16,199
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
14,015
|
|
|
|
15,311
|
|
Stock-based compensation
|
|
|
2,607
|
|
|
|
2,385
|
|
Deferred income taxes
|
|
|
(406
|
)
|
|
|
(317
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
|
66,904
|
|
|
|
113,356
|
|
Inventories
|
|
|
(23,469
|
)
|
|
|
269
|
|
Prepaid expenses and other assets
|
|
|
(2,657
|
)
|
|
|
405
|
|
Accounts payable and accrued expenses
|
|
|
(32,795
|
)
|
|
|
(62,763
|
)
|
Net cash provided by operating activities
|
|
|
25,570
|
|
|
|
84,845
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
|
(3,264
|
)
|
|
|
(4,761
|
)
|
Acquisition of businesses
|
|
|
(6,618
|
)
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(9,882
|
)
|
|
|
(4,761
|
)
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
Advances (repayments) under revolving lines of credit, net
|
|
|
64
|
|
|
|
(4,627
|
)
|
Repayments under senior notes payable and other, net
|
|
|
(11,063
|
)
|
|
|
(4,188
|
)
|
Proceeds from exercise of options
|
|
|
1,812
|
|
|
|
845
|
|
Income tax benefit from stock-based compensation deductions in
excess of the associated compensation costs
|
|
|
|
|
|
|
480
|
|
|
|
86
|
|
Net cash used by financing activities
|
|
|
(8,707
|
)
|
|
|
(7,884
|
)
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
146
|
|
|
|
(132
|
)
|
Net increase in cash and cash equivalents
|
|
|
7,127
|
|
|
|
72,068
|
|
Cash and cash equivalents at beginning of period
|
|
|
82,742
|
|
|
|
26,038
|
|
Cash and cash equivalents at end of period
|
|
$
|
89,869
|
|
|
$
|
98,106
|
|
|
|
|
|
|
|
|
|
|
|
BEACON ROOFING SUPPLY, INC
|
Consolidated Sales by Product Line
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
|
|
March 31, 2009
|
|
|
|
|
(dollars in millions)
|
|
Net Sales
|
|
Mix %
|
|
Net Sales
|
|
Mix %
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential roofing products
|
|
$
|
143.0
|
|
50.1%
|
|
$
|
172.2
|
|
53.9%
|
|
$
|
(29.2)
|
|
-17.0%
|
Non-residential roofing products
|
|
|
96.8
|
|
33.9%
|
|
|
101.2
|
|
31.7%
|
|
|
(4.4)
|
|
-4.4%
|
Complementary building products
|
|
|
45.6
|
|
16.0%
|
|
|
45.9
|
|
14.4%
|
|
|
(0.3)
|
|
-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
285.4
|
|
100.0%
|
|
$
|
319.3
|
|
100.0%
|
|
$
|
(33.9)
|
|
-10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
|
|
March 31, 2009
|
|
|
|
|
(dollars in millions)
|
|
Net Sales
|
|
Mix %
|
|
Net Sales
|
|
Mix %
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential roofing products
|
|
$
|
316.3
|
|
48.4%
|
|
$
|
406.9
|
|
52.0%
|
|
$
|
(90.6)
|
|
-22.3%
|
Non-residential roofing products
|
|
|
236.0
|
|
36.1%
|
|
|
266.0
|
|
34.0%
|
|
|
(30.0)
|
|
-11.3%
|
Complementary building products
|
|
|
100.8
|
|
15.4%
|
|
|
109.7
|
|
14.0%
|
|
|
(8.9)
|
|
-8.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
653.1
|
|
100.0%
|
|
$
|
782.6
|
|
100.0%
|
|
$
|
(129.5)
|
|
-16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Some totals above may not foot due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest, Taxes, Depreciation and Amortization
and Stock-Based Compensation ("Adjusted EBITDA")
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Six Months Ended March 31,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(6,456
|
)
|
|
$
|
(2,443
|
)
|
|
$
|
1,371
|
|
$
|
16,199
|
Interest expense
|
|
|
5,499
|
|
|
|
5,589
|
|
|
|
11,086
|
|
|
11,738
|
Income taxes
|
|
|
(5,030
|
)
|
|
|
(1,688
|
)
|
|
|
68
|
|
|
11,196
|
Depreciation and amortization
|
|
|
6,886
|
|
|
|
7,589
|
|
|
|
14,015
|
|
|
15,311
|
Stock-based compensation
|
|
|
1,180
|
|
|
|
1,190
|
|
|
|
2,607
|
|
|
2,385
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)
|
|
$
|
2,079
|
|
|
$
|
10,237
|
|
|
$
|
29,147
|
|
$
|
56,829
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA is defined as net income (loss) 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, 978-535-7668 x14
CFO
dgrace@beaconroofingsupply.com
Copyright Business Wire 2010