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Beacon Roofing Supply, Inc. (the “Company”) (NASDAQ: BECN) announced results today for its third quarter and nine months ended June 30, 2013 of the fiscal year ending September 30, 2013 (“fiscal 2013”).
Paul Isabella, the Company’s President & Chief Executive Officer, stated: “We experienced a challenging demand environment during the third quarter of fiscal 2013, however we still recorded double-digit growth with sales up 12% over last year. Our total sales benefited from the positive impact of several acquisitions made since the start of last year, as well as a 1.2% increase in organic sales in the quarter. In addition to 19 branches acquired so far this year, we also opened two branches in this year’s third quarter and three new branches year to date. Our sales growth occurred despite unusually heavy rains and other harsh weather factors in many of our markets that delayed Spring and early Summer roofing activities, as well as the negative impact from fewer hail storms during fiscal 2013 than in the prior year. The soft demand led to pricing pressures that negatively impacted our gross margins, although our continued focus on expense controls enabled us to limit the impact on earnings. Our fourth quarter sales volumes are off to a good start and we will continue to focus on opening new branches, smart acquisition growth and improving our gross margins.”
Total sales increased 11.9% to $627.2 million in 2013 from $560.5 million in 2012. Existing market (organic) sales, which exclude branches acquired after the beginning of last year’s third quarter, increased 1.2%. In existing markets, residential and non-residential roofing product sales increased 0.2% and 1.1%, respectively, while complementary product sales increased 5.2%. The 2013 sales performance was unfavorably affected by heavy rains in several regions and fewer hail storms.
Net income for the third quarter was $27.2 million compared to net income of $25.4 million in 2012. The third quarter diluted income per share was $0.55 in 2013 compared to an adjusted $0.62 in 2012. This decline was due primarily to lower gross margins from product cost increases that have not been consistently passed through to customers due to the soft demand environment. Although operating expenses were up in total, they were down as a percentage of sales resulting from continued cost controls and sales base growth. The 2013 diluted income per share was negatively impacted by approximately $.02 per share compared to 2012 by a higher base of shares outstanding. Earnings in the third quarter of fiscal 2012 were impacted by the following charges: $4.9 million ($2.9 million net of taxes), or approximately $0.06 diluted earnings per share, for costs resulting from the Company’s refinancing in April 2012; and $1.3 million, or approximately $0.03 diluted earnings per share, from the increase in the liability for consideration due for the Enercon acquisition.