Skip to main content

Market Overview

Beacon Roofing Supply Reports Second Quarter 2018 Results

Share:
  • Record second quarter net sales of $1.43 billion (63.7% growth
    year-over-year)
  • Second quarter EPS of ($1.07) vs. ($0.16) in the prior year, and
    Adjusted EPS of ($0.35) vs. $0.08
  • Pricing increased for the 2nd consecutive
    quarter and showed the strongest gains in more than five years
  • Raising Allied synergy target to $120 million from $110 million;
    integration progress exceeding expectations

Beacon Roofing Supply, Inc. (NASDAQ:BECN) ("Beacon" or the "Company")
announced results today for its second quarter ended March 31, 2018 and
first half ended March 31, 2018 of the fiscal year ending September 30,
2018 ("2018").

Paul Isabella, the Company's President and Chief Executive Officer,
stated, "Second quarter results fell short of our expectations, as harsh
winter weather conditions limited customers available work days. The
year-to-year temperature declines, particularly throughout the Midwest,
Ohio Valley and South, produced one of the most significant temperature
drops in the past several decades. The cold weather, combined with
heavier February precipitation and March snowstorms, created a difficult
environment for the roofing industry. Despite this challenging
environment, our organic sales were flat year over year bolstered by
strong volume from hurricane impacted areas and our early efforts in
passing through manufacturer price increases. Second quarter pricing
improved more than 200 basis points versus last year, representing a 2nd
consecutive quarterly gain and our highest increase in more than five
years. While gross margins saw timing related price-cost headwinds, we
are confident pricing will continue to improve over the coming months.
Adjusted operating costs as a percent of sales were above year ago
levels reflecting increased spending to serve the hurricane impacted
markets, a higher cost structure at Allied and synergy timing. We will
continue to focus our efforts on actions aimed to increase sales, drive
higher gross margins and lever our cost structure during the busiest
part of the year. Additionally, we remain committed to investing in our
future as evidenced through initiatives such as ecommerce, continuous
improvement and enhancements to our pricing model. Successful early
integration efforts associated with the Allied combination have provided
us the confidence to raise our synergy expectations. After just four
months of ownership, the talented employees of Allied are already adding
significant value to the Beacon organization. Beacon remains committed
to driving growth organically and through acquisitions while lowering
our overall net debt leverage, adding value through technology
investments, and executing the Allied integration plan."

Second Quarter

Total sales increased 63.7% to a second quarter record of $1.43 billion,
up from $870.7 million in 2017. Residential roofing product sales
increased 19.7%, non-residential roofing product sales increased 35.6%
and complementary product sales increased 263.2% over the prior year.
Existing markets sales, excluding acquisitions, decreased 0.1% for the
quarter. The second quarter of fiscal years 2018 and 2017 each had 64
business days.

Net loss attributable to common shareholders for the second quarter was
($72.7) million, compared to ($9.4) million in 2017. Second quarter EPS
was ($1.07), compared to ($0.16) in 2017. Adjusted Net Income (Loss),
after removing the impact of acquisition related costs and the net
benefit from one-time tax items, was a loss of ($23.5) million in the
second quarter of 2018, compared to $5.0 million in 2017. Second quarter
Adjusted EPS was a loss of ($0.35), compared to $0.08 in 2017. (See
included financial tables for a reconciliation of "Adjusted" financial
measures to the most directly comparable GAAP financial measures).
Second quarter results were positively impacted by strong existing and
acquired sales growth within our complementary products category,
improved company-wide gross margins and early synergy benefits
attributable to the purchase of Allied. Second quarter 2018 EPS was
negatively impacted by winter weather conditions that lowered customer
activity, higher operating expenses, increased interest expense, and the
impact from preferred dividends.

First Half

Total sales increased 36.0% to a first half record of $2.55 billion, up
from $1.87 billion in 2017. Residential roofing product sales increased
15.2%, non-residential roofing product sales increased 18.6% and
complementary product sales increased 138.1% over the prior year.
Existing markets sales, excluding acquisitions, increased 4.4% for the
first half. The first half of fiscal years 2018 and 2017 each had 125
business days.

Net income (loss) attributable to common shareholders for the first half
was ($5.1) million, compared to $11.1 million in 2017. First half EPS
was ($0.07), compared to $0.18 in 2017. Adjusted Net Income (Loss),
after removing the impact of acquisition related costs and the net
benefit from one-time tax items, was $23.2 million in the first half
2018, compared to $39.4 million in 2017. First half Adjusted EPS was
$0.34, compared to $0.64 in 2017. (See included financial tables for a
reconciliation of "Adjusted" financial measures to the most directly
comparable GAAP financial measures). First half results were positively
impacted by strong net sales growth, contributions from our 2017
acquisitions, and beneficial tax adjustments. First half 2018 EPS was
negatively impacted by lower gross margins, higher operating costs, and
increased interest expense.

The Company will host a webcast and conference call today at 5:00 p.m.
ET to discuss these results. The webcast link and call-in details are as
follows:

       
What: Beacon Roofing Supply Second Quarter 2018 Earnings Results Webcast
and Conference Call
 
When

Tuesday, May 8, 2018

 
Time: 5:00 p.m. ET
 
Webcast:

http://ir.beaconroofingsupply.com/events.cfm
(live and replay)

 
Live Call: 720-634-9063; Conf. ID #8484767
 

To assure timely access, conference call participants should dial in
prior to the 5:00 p.m. ET start time.

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.

About Beacon Roofing Supply

Founded in 1928, Beacon Roofing Supply, Inc. is the largest publicly
traded distributor of residential and commercial roofing materials and
complementary building products, operating 563 branches throughout 50
states in the U.S. and 6 provinces in Canada. To learn more about Beacon
and its family of regional brands, please visit www.becn.com.

 

BEACON ROOFING SUPPLY, INC.

Consolidated Statements of Operations

(In thousands, except share and per share amounts)

 
    Three Months Ended March 31,     Six Months Ended March 31,
20181  

% of
Net
Sales

  20172  

% of
Net
Sales

20181  

% of
Net
Sales

  20172    

% of
Net
Sales

Net sales $ 1,425,625   100.0 % $ 870,724   100.0 % $ 2,547,604   100.0 % $ 1,872,908   100.0 %
Cost of products sold   1,087,248   76.3 %   666,247   76.5 %   1,939,474   76.1 %   1,417,364
View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com