Press Releases Details

• First quarter net sales of $405 million vs. $368 million.
• First quarter EPS of $0.22 vs. $0.17.
• First quarter existing market sales up 6.6%.
• Cash on hand builds to $176 million.

PEABODY, Mass.--(BUSINESS WIRE)-- Beacon Roofing Supply, Inc. (the "Company") (NASDAQ: BECN) announced results today for its fiscal 2011 first quarter ended December 31, 2010.

Paul Isabella, the Company's President & Chief Executive Officer, stated: "Our first quarter 2011 results exceeded our expectations. Our commercial and complementary businesses bounced back well from low prior year levels and some of our regions experienced healthy gains in residential business as well. We continued to tightly control our operating expenses, and we increased our cash holdings by another $59 million in the first quarter. Our gross margin improved significantly from recent quarters, and we are optimistic about fiscal year 2011 based on the good start to the year."

First Quarter

Total sales increased 10.1% to $404.8 million in 2011 from $367.7 million in 2010, while existing market (organic) sales increased 6.6%. Existing market results exclude seven branches acquired subsequent to December 31, 2009. Non-residential roofing and complementary product sales in existing markets increased 13.6% and 12.1%, respectively, while residential roofing sales decreased 0.8%. Residential roofing sales continued to be especially weak in markets affected by storms in 2009.

Net income for the first quarter was $10.1 million compared to $7.8 million in 2010, an increase of 28.4%. Diluted net income per share was $0.22 compared to $0.17 in 2010, an increase of 29.4%. The improved net income was due to the higher sales along with lower interest expense, partially offset by the impact from a lower gross margin rate, compared to last year's first quarter, as well as higher expenses and income taxes.

Earnings before interest, taxes, depreciation and amortization, and stock-based compensation ("Adjusted EBITDA"), which is reconciled to the net income in this press release, were $27.7 million in 2011 compared to $27.1 million in 2010, an improvement of 2.5%.

Cash flow from operations was $57.5 million compared to $29.5 million in 2010. This year's cash flows were influenced mostly by a lower reduction in accounts payable and accrued expenses compared to last year, partially offset by an unfavorable impact from lower decreases in accounts receivable and inventories this year. Cash on hand increased by $65.4 million to $175.7 million at December 31, 2010 compared to $110.2 million at December 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.

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.

(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 awards 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.

BECN-F

Beacon Roofing Supply, Inc.
Dave Grace, CFO, 978-535-7668 x14
dgrace@beaconroofingsupply.com

Source: Beacon Roofing Supply, Inc.

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