PEABODY, Mass., Aug 05, 2010 (BUSINESS WIRE) -- Beacon Roofing Supply, Inc. (the "Company") (NASDAQ: BECN) announced
results today for its fiscal 2010 third quarter and nine months
(year-to-date) ended June 30, 2010.
Robert Buck, the Company's Chairman & Chief Executive Officer, stated:
"Our third quarter results fell short of our expectations as market
conditions did not improve to the extent anticipated and this continued
to put unusual pressure on our gross margin. However, our total sales
increased as we were active with our acquisition program and our
non-residential roofing and complementary product sales were up sharply.
We also reduced our existing market operating expenses. We believe we
are well positioned to leverage a future pick-up in our residential
roofing business, and we started to see gains in a few of our regions
that had been hit especially hard by the economic downturn."
Third Quarter
Sales increased 2.3% to $474.3 million in 2010 from $463.6 million in
2009, while existing market (organic) sales declined 0.1%. There were
eight additional branches in operation at the end of this year's third
quarter compared to June 30, 2009. Non-residential roofing and
complementary product sales in existing markets increased 10.9% and
19.3%, respectively, while residential roofing sales decreased 11.8%.
Residential roofing sales were up against a 10.4% increase in 2009.
Net income for the third quarter was $16.3 million compared to $17.2
million in 2009, a decline of 5.2%. Net diluted income per share was
$0.35 compared to $0.38 in 2009, a decline of 7.9%. The lower net income
was primarily due to a lower gross margin rate, partially offset by
lower interest expense.
Earnings before interest, taxes, depreciation and amortization, and
stock-based compensation or "Adjusted EBITDA," which is reconciled to
the net income in this press release, was $38.2 million in 2010 compared
to $42.4 million in 2009, a decline of 9.7%.
Nine Months
Year-to-date sales declined 9.5% to $1.13 billion in 2010 from $1.25
billion in 2009, while existing market sales decreased 10.6%.
Residential roofing and non-residential roofing sales in existing
markets decreased 18.5% and 3.2%, respectively, while complementary
product sales increased 1.6%. Year-to-date residential roofing sales
were up against a 31.5% increase in 2009, which resulted from higher
average prices and re-roofing activity in storm-affected regions,
especially in the areas affected by Hurricane Ike in the first half of
fiscal year 2009.
Year-to-date net income was $17.7 million compared to $33.4 million in
2009. Diluted net income per share was $0.38 compared to $0.74 in 2009.
The lower net income was due to the decline in sales and a lower gross
margin rate, partially offset by lower expenses.
Year-to-date adjusted EBITDA was $67.4 million in 2010 compared to $99.2
million in 2009, a decline of 32.1%.
Cash flow from operations was $26.5 million compared to $84.3 million in
2009. This year's cash flows were influenced mostly by the lower
operating profit and inventory and accounts receivable increases,
partially offset by the benefit from an increase rather than a decrease
in accounts payable and accrued expenses (combined), including the
impact of lower income tax payments. The Company spent $12.6 million on
acquisitions this year and continued to pay down debt. There was $82.1
million of cash on hand at the end of this year's third quarter compared
to $83.0 million at June 30, 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 179 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
|
|
Nine Months Ended
|
|
(Dollars in thousands, except per share data)
|
|
June 30, 2010
|
|
% of Net
Sales
|
|
June 30, 2009
|
|
% of Net
Sales
|
|
June 30, 2010
|
|
% of Net
Sales
|
|
June 30, 2009
|
|
% of Net
Sales
|
|
Net sales
|
|
$
|
474,279
|
|
100.0%
|
|
$
|
463,586
|
|
100.0%
|
|
$
|
1,127,366
|
|
100.0%
|
|
$
|
1,246,218
|
|
100.0%
|
|
Cost of products sold
|
|
|
369,991
|
|
78.0%
|
|
|
355,761
|
|
76.7%
|
|
|
873,673
|
|
77.5%
|
|
|
948,117
|
|
76.1%
|
|
Gross profit
|
|
|
104,288
|
|
22.0%
|
|
|
107,825
|
|
23.3%
|
|
|
253,693
|
|
22.5%
|
|
|
298,101
|
|
23.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
74,056
|
|
15.6%
|
|
|
74,239
|
|
16.0%
|
|
|
210,936
|
|
18.7%
|
|
|
225,382
|
|
18.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
30,232
|
|
6.4%
|
|
|
33,586
|
|
7.2%
|
|
|
42,757
|
|
3.8%
|
|
|
72,719
|
|
5.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
3,596
|
|
0.8%
|
|
|
5,566
|
|
1.2%
|
|
|
14,682
|
|
1.3%
|
|
|
17,304
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
26,636
|
|
5.6%
|
|
|
28,020
|
|
6.0%
|
|
|
28,075
|
|
2.5%
|
|
|
55,415
|
|
4.4%
|
|
Income tax expense
|
|
|
10,345
|
|
2.2%
|
|
|
10,833
|
|
2.3%
|
|
|
10,413
|
|
0.9%
|
|
|
22,029
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
16,291
|
|
3.4%
|
|
|
17,187
|
|
3.7%
|
|
$
|
17,662
|
|
1.6%
|
|
$
|
33,386
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
|
|
$
|
0.38
|
|
|
|
$
|
0.39
|
|
|
|
$
|
0.74
|
|
|
|
Diluted
|
|
$
|
0.35
|
|
|
|
$
|
0.38
|
|
|
|
$
|
0.38
|
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing
net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
45,588,778
|
|
|
|
|
45,100,853
|
|
|
|
|
45,422,222
|
|
|
|
|
44,954,582
|
|
|
|
Diluted
|
|
|
46,289,811
|
|
|
|
|
45,541,415
|
|
|
|
|
46,012,172
|
|
|
|
|
45,417,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEACON ROOFING SUPPLY, INC
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
June 30, 2010
|
|
June 30, 2009
|
|
September 30, 2009
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
82,077
|
|
|
$
|
83,037
|
|
|
$
|
82,742
|
|
|
Accounts receivable, net
|
|
|
234,789
|
|
|
|
226,741
|
|
|
|
227,379
|
|
|
Inventories
|
|
|
223,458
|
|
|
|
216,341
|
|
|
|
195,011
|
|
|
Prepaid expenses and other assets
|
|
|
45,865
|
|
|
|
39,582
|
|
|
|
52,714
|
|
|
Deferred income taxes
|
|
|
18,021
|
|
|
|
20,860
|
|
|
|
19,323
|
|
|
Total current assets
|
|
|
604,210
|
|
|
|
586,561
|
|
|
|
577,169
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
46,793
|
|
|
|
53,883
|
|
|
|
52,965
|
|
|
Goodwill
|
|
|
360,094
|
|
|
|
353,209
|
|
|
|
354,193
|
|
|
Other assets, net
|
|
|
50,594
|
|
|
|
64,016
|
|
|
|
56,459
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,061,691
|
|
|
$
|
1,057,669
|
|
|
$
|
1,040,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
168,227
|
|
|
$
|
180,085
|
|
|
$
|
151,683
|
|
|
Accrued expenses
|
|
|
66,295
|
|
|
|
82,332
|
|
|
|
75,536
|
|
|
Current portion of long-term obligations
|
|
|
8,641
|
|
|
|
8,160
|
|
|
|
15,092
|
|
|
Total current liabilities
|
|
|
243,163
|
|
|
|
270,577
|
|
|
|
242,311
|
|
|
|
|
|
|
|
|
|
|
Senior notes payable and other obligations, net of current portion
|
|
|
331,673
|
|
|
|
351,723
|
|
|
|
338,347
|
|
|
Deferred income taxes
|
|
|
35,864
|
|
|
|
34,516
|
|
|
|
36,555
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock
|
|
|
456
|
|
|
|
451
|
|
|
|
452
|
|
|
Additional paid-in capital
|
|
|
234,772
|
|
|
|
224,500
|
|
|
|
226,793
|
|
|
Retained earnings
|
|
|
217,026
|
|
|
|
180,332
|
|
|
|
199,364
|
|
|
Accumulated other comprehensive loss
|
|
|
(1,263
|
)
|
|
|
(4,430
|
)
|
|
|
(3,036
|
)
|
|
Total stockholders' equity
|
|
|
450,991
|
|
|
|
400,853
|
|
|
|
423,573
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,061,691
|
|
|
$
|
1,057,669
|
|
|
$
|
1,040,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEACON ROOFING SUPPLY, INC
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Unaudited
|
|
|
|
|
|
(In thousands)
|
|
June 30, 2010
|
|
June 30, 2009
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
17,662
|
|
|
$
|
33,386
|
|
|
Adjustments to reconcile net income
to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
20,827
|
|
|
|
22,835
|
|
|
Stock-based compensation
|
|
|
3,799
|
|
|
|
3,626
|
|
|
Deferred income taxes
|
|
|
(1,421
|
)
|
|
|
(735
|
)
|
Changes in assets and liabilities, net of the effects of
businesses
acquired:
|
|
|
|
|
|
Accounts receivable
|
|
|
(1,574
|
)
|
|
|
55,086
|
|
|
Inventories
|
|
|
(24,643
|
)
|
|
|
(8,143
|
)
|
|
Prepaid expenses and other assets
|
|
|
7,765
|
|
|
|
2,622
|
|
|
Accounts payable and accrued expenses
|
|
|
4,057
|
|
|
|
(24,375
|
)
|
|
Net cash provided by operating activities
|
|
|
26,472
|
|
|
|
84,302
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(5,364
|
)
|
|
|
(10,691
|
)
|
|
Acquisition of businesses
|
|
|
(12,613
|
)
|
|
|
-
|
|
|
Net cash used in investing activities
|
|
|
(17,977
|
)
|
|
|
(10,691
|
)
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
Repayments under revolving lines of credit, net
|
|
|
(10
|
)
|
|
|
(4,743
|
)
|
|
Repayments under senior notes payable and other, net
|
|
|
(13,137
|
)
|
|
|
(13,087
|
)
|
|
Proceeds from exercise of options
|
|
|
3,420
|
|
|
|
1,100
|
|
|
Income tax benefit from stock-based compensation deductions
in
excess of the associated compensation costs
|
|
|
763
|
|
|
|
108
|
|
|
Net cash used by financing activities
|
|
|
(8,964
|
)
|
|
|
(16,622
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
(196
|
)
|
|
|
10
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(665
|
)
|
|
|
56,999
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
82,742
|
|
|
|
26,038
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
82,077
|
|
|
$
|
83,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEACON ROOFING SUPPLY, INC
|
|
Consolidated Sales by Product Line-Existing Markets*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2010
|
|
June 30, 2009
|
|
|
|
|
(dollars in millions)
|
|
Net Sales
|
|
Mix %
|
|
Net Sales
|
|
Mix %
|
|
Change
|
|
Residential roofing products
|
|
$
|
217.2
|
|
46.9
|
%
|
|
$
|
246.4
|
|
53.1
|
%
|
|
$
|
(29.2
|
)
|
-11.8
|
%
|
|
Non-residential roofing products
|
|
|
173.5
|
|
37.5
|
%
|
|
|
156.5
|
|
33.8
|
%
|
|
|
17.0
|
|
10.9
|
%
|
|
Complementary building products
|
|
|
72.4
|
|
15.6
|
%
|
|
|
60.7
|
|
13.1
|
%
|
|
|
11.7
|
|
19.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
463.1
|
|
100.0
|
%
|
|
$
|
463.6
|
|
100.0
|
%
|
|
$
|
(0.5
|
)
|
-0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2010
|
|
June 30, 2009
|
|
|
|
|
(dollars in millions)
|
|
Net Sales
|
|
Mix %
|
|
Net Sales
|
|
Mix %
|
|
Change
|
|
Residential roofing products
|
|
$
|
532.5
|
|
47.8
|
%
|
|
$
|
653.5
|
|
52.4
|
%
|
|
$
|
(121.0
|
)
|
-18.5
|
%
|
|
Non-residential roofing products
|
|
|
409.1
|
|
36.7
|
%
|
|
|
422.4
|
|
33.9
|
%
|
|
|
(13.3
|
)
|
-3.2
|
%
|
|
Complementary building products
|
|
|
173.1
|
|
15.5
|
%
|
|
|
170.3
|
|
13.7
|
%
|
|
|
2.8
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,114.7
|
|
100.0
|
%
|
|
$
|
1,246.2
|
|
100.0
|
%
|
|
$
|
(131.5
|
)
|
-10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Excludes branches acquired during the four quarters prior to the
start of the third quarter of fiscal 2010.
|
|
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 June 30,
|
|
Nine Months Ended June 30,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Net income
|
|
|
$
|
16,291
|
|
$
|
17,187
|
|
$
|
17,662
|
|
$
|
33,386
|
|
Interest expense
|
|
|
3,596
|
|
|
5,566
|
|
|
14,682
|
|
|
17,304
|
|
Income taxes
|
|
|
|
10,345
|
|
|
10,833
|
|
|
10,413
|
|
|
22,029
|
|
Depreciation and amortization
|
|
|
6,812
|
|
|
7,524
|
|
|
20,827
|
|
|
22,835
|
|
Stock-based compensation
|
|
|
1,192
|
|
|
1,241
|
|
|
3,799
|
|
|
3,626
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)
|
|
$
|
38,236
|
|
$
|
42,351
|
|
$
|
67,383
|
|
$
|
99,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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