Beacon Roofing Supply Reports First Quarter 2013 Results
Beacon Roofing Supply Reports First Quarter 2013 Results
Record first quarter net sales up 5% to $514 million vs. $490 million.
First quarter EPS of $0.37 vs. $0.41 ($0.39 adjusted).
Nineteen branches acquired in the first quarter.
PEABODY, Mass.--(BUSINESS WIRE)-- Beacon Roofing Supply, Inc. (the "Company") (NAS: BECN) announced results today for its first quarter ended December 31, 2012 ("2013") of the fiscal year ending September 30, 2013 ("fiscal 2013").
Paul Isabella, the Company's President & Chief Executive Officer, stated: "We began fiscal 2013 with a solid first quarter performance despite being up against a very strong quarter last year when our existing market sales were up 17%. Our total sales benefited from the positive impact of several acquisitions made since the start of last year and our gross margin continued to improve over the prior year. The trend of our complementary product sales has been encouraging, considering the more discretionary nature of those products. Towards the end of the first quarter, we took advantage of our financial capacity and flexibility to purchase key products ahead of announced industry-wide price increases scheduled mostly for February and April. We believe we are well positioned for a successful fiscal 2013 and expect to continue our steady growth. We continue aggressively to seek quality companies that fit our target acquisition profile, such as McClure-Johnston and Ford Wholesale, which we acquired in the first quarter."
Total sales increased 4.9% to $513.7 million in 2013 from $489.9 million in 2012. Existing market (organic) sales, which exclude branches acquired after the beginning of last year's first quarter, declined 4.6% (7.7% based on the same number of business days). In existing markets, residential and non-residential roofing product sales decreased 5.4% and 6.1%, respectively, while complementary product sales increased 2.9%. The 2013 sales performance was unfavorably affected by the comparison to last year's very high level of re-roofing activities, including the beneficial impact from mild weather in December 2011 and strong business in several markets that experienced significant storms in 2011, and lower average residential roofing selling prices this year.
Net income for the first quarter was $18.2 million compared to $19.1 million in 2012, a decrease of 4.8%. Last year's net income included a benefit of $1.0 million, $0.02 per share, from a reduction in a liability for contingent consideration related to the acquisition of Enercon Products. First quarter diluted net income per share was $0.37 compared to an adjusted $0.39 in 2012. The lower net income was primarily due to higher operating expenses, including acquired branch expenses, mostly offset by the impact from higher gross profit and lower interest expense.
Earnings before interest, taxes, depreciation and amortization, and stock-based compensation ("Adjusted EBITDA"), which are reconciled to the net income in this press release, were $41.8 million in 2013 compared to $41.1 million in 2012, an increase of 1.7%.
Cash flow from operations was $47.3 million compared to $59.0 million in 2012. This comparison in operating cash flows was influenced mostly by less favorable changes in working capital, including additional inventory purchases made in 2013 ahead of announced price increases. Cash on hand decreased by $121.2 million to $34.0 million at December 31, 2012 compared to $155.2 million at December 31, 2011, due primarily to a significant paydown of debt (net of new borrowings) since last year's first quarter and the costs of the acquisitions made since that time.
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 719-325-2452. 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 228 branches in 38 states in the United States and across 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.
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BEACON ROOFING SUPPLY, INC | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
Unaudited | Three Months Ended | |||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||
December 31, 2012 | % of Net | December 31, 2011 | % of Net | |||||||||||||||
Net sales | $ | 513,710 | 100.0 | % | $ | 489,850 | 100.0 | % | ||||||||||
Cost of products sold | 386,956 | 75.3 | % | 372,525 | 76.0 | % | ||||||||||||
Gross profit | 126,754 | 24.7 | % | 117,325 | 24.0 | % | ||||||||||||
Operating expenses | 94,503 | 18.4 | % | 82,985 | 16.9 | % | ||||||||||||
Income from operations | 32,251 | 6.3 | % | 34,340 | 7.0 | % | ||||||||||||
Interest expense | 1,910 | 0.4 | % | 3,280 | 0.7 | % | ||||||||||||
Income before income taxes | 30,341 | 5.9 | % | 31,060 | 6.3 | % | ||||||||||||
Income tax expense | 12,135 | 2.4 | % | 11,945 | 2.4 | % | ||||||||||||
Net income | $ | 18,206 | 3.5 | % | 19,115 | 3.9 | % | |||||||||||
Net income per share: | ||||||||||||||||||
Basic | $ | 0.38 | $ | 0.41 | ||||||||||||||
Diluted | $ | 0.37 | $ | 0.41 | ||||||||||||||
Weighted average shares used in computing net income per share: | ||||||||||||||||||
Basic | 47,858,626 | 46,190,888 | ||||||||||||||||
Diluted | 48,865,099 | 46,830,178 | ||||||||||||||||
BEACON ROOFING SUPPLY, INC | ||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||
Unaudited | ||||||||||||
(Dollars in thousands) | December 31, 2012 | December 31, 2011 | September 30, 2012 | |||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 34,025 | $ | 155,171 | $ | 40,205 | ||||||
Accounts receivable, net | 231,500 | 221,665 | 291,456 | |||||||||
Inventories | 270,363 | 193,020 | 222,740 | |||||||||
Prepaid expenses and other assets | 94,605 | 57,083 | 60,287 | |||||||||
Deferred income taxes | 15,793 | 14,881 | 16,087 | |||||||||
Total current assets | 646,286 | 641,820 | 630,775 | |||||||||
Property and equipment, net | 58,246 | 48,537 | 57,376 | |||||||||
Goodwill | 468,757 | 400,140 | 443,161 | |||||||||
Other assets, net | 113,739 | 61,008 | 85,670 | |||||||||
Total assets | $ | 1,287,028 | $ | 1,151,505 | $ | 1,216,982 | ||||||
Liabilities and stockholders' equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 176,322 | $ | 149,699 | $ | 167,390 | ||||||
Accrued expenses | 84,519 | 73,101 | 71,627 | |||||||||
Borrowings under revolving lines of credit | 47,400 | - | 41,300 | |||||||||
Current portion of long-term obligations | 15,430 | 15,201 | 15,632 | |||||||||
Total current liabilities | 323,671 | 238,001 | 295,949 | |||||||||
Senior notes payable and other obligations, net of current portion | 221,122 | 309,632 | 220,875 | |||||||||
Deferred income taxes | 58,037 | 39,145 | 48,196 | |||||||||
Stockholders' equity: | ||||||||||||
Common stock | 483 | 463 | 477 | |||||||||
Additional paid-in capital | 294,507 | 251,623 | 280,184 | |||||||||
Retained earnings | 386,881 | 312,225 | 368,675 | |||||||||
Accumulated other comprehensive income | 2,327 | 416 | 2,626 | |||||||||
Total stockholders' equity | 684,198 | 564,727 | 651,962 | |||||||||
Total liabilities and stockholders' equity | $ | 1,287,028 | $ | 1,151,505 | $ | 1,216,982 | ||||||
BEACON ROOFING SUPPLY, INC | |||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||
Three Months Ended | |||||||||||
Unaudited | |||||||||||
(In thousands) | December 31, 2012 | December 31, 2011 | |||||||||
Operating activities: | |||||||||||
Net income | $ | 18,206 | $ | 19,115 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 7,057 | 6,055 | |||||||||
Stock-based compensation | 2,524 | 1,747 | |||||||||
Adjustment of liability for contingent consideration | - | (1,000 | ) | ||||||||
Certain interest expense and other financing costs | (1,051 | ) | - | ||||||||
Gain on sale of assets | (226 | ) | (209 | ) | |||||||
Deferred income taxes | (133 | ) | (662 | ) | |||||||
Changes in assets and liabilities, net of the effects of businesses acquired: | |||||||||||
Accounts receivable | 76,209 | 71,446 | |||||||||
Inventories | (34,257 | ) | 20,805 | ||||||||
Prepaid expenses and other assets | (28,370 | ) | (19,126 | ) | |||||||
Accounts payable and accrued expenses | 7,326 | (39,195 | ) | ||||||||
Net cash provided by operating activities | 47,285 | 58,976 | |||||||||
Investing activities: | |||||||||||
Purchases of property and equipment | (3,092 | ) | (2,434 | ) | |||||||
Acquisition of business | (64,484 | ) | (44,396 | ) | |||||||
Proceeds from sales of assets | 291 | 223 | |||||||||
Net cash used by investing activities | (67,285 | ) | (46,607 | ) | |||||||
Financing activities: | |||||||||||
Borrowings (repayments) under revolving lines of credit, net | 6,100 | (13 | ) | ||||||||
Repayments under senior notes payable and other, net | (3,807 | ) | (2,315 | ) | |||||||
Proceeds from exercises of options | 9,915 | 1,534 | |||||||||
Income tax benefit from stock-based compensation deductions in excess of the associated compensation costs | 1,755 | 82 | |||||||||
Net cash provided (used) by financing activities | 13,963 | (712 | ) | ||||||||
Effect of exchange rate changes on cash | (143 | ) | 487 | ||||||||
Net increase (decrease) in cash and cash equivalents | (6,180 | ) | 12,144 | ||||||||
