Beacon Roofing Supply Reports Third Quarter 2018 Results
HERNDON, Va.--(BUSINESS WIRE)--Aug 7, 2018--Beacon Roofing Supply, Inc. (Nasdaq:BECN) (“Beacon” or the “Company”) announced results today for its third quarter ended June 30, 2018 and nine months ended June 30, 2018 of the fiscal year ending September 30, 2018 (“2018”).
Paul Isabella, the Company’s President and Chief Executive Officer, stated, “We generated record sales and Adjusted EBITDA during our fiscal 2018 third quarter. Gross margins expanded by 100 bps compared to the prior year quarter and 180 bps compared to the second quarter of fiscal year 2018. These results were made possible through excellent work from our entire organization, as we effectively communicated the inflationary pressures to the marketplace. Not only did we achieve positive price-cost realization in each of our three product lines, but we also significantly outperformed our prior public guidance, which we believe underscores the value our service levels bring to the market. Organic sales increased 2.0%, reflecting improved pricing, partially offset by volume headwinds from difficult storm comparisons within our larger traditional hail markets. We are pleased by our excellent operating execution, which was highlighted by our price-cost efforts and an ability to control expenses in a quarter of softer demand. The integration of Allied is tracking better than expected for 2018, and we remain committed to realizing our long-term synergy goals. We recognize that weather events may cause short-term demand to fluctuate geographically, however our long-term sales trajectory shows a much greater level of consistency given our sizeable repair and remodel (R&R) business. Going forward, Beacon will remain a disciplined leader on pricing and we will continue to distinguish ourselves through strategic investments in our people and technology, and by expanding the depth and breadth of our product offerings.”
Total sales increased 59.4% to a third quarter record of $1.93 billion, up from $1.21 billion in 2017. Residential roofing product sales increased 23.4%, non-residential roofing product sales increased 42.1% and complementary product sales increased 204.6% over the prior year. Existing markets sales, excluding acquisitions, increased 2.0% for the quarter. The third quarter of fiscal years 2018 and 2017 each had 64 business days.
Net income attributable to common shareholders for the third quarter was $43.4 million, compared to $44.7 million in 2017. Third quarter EPS was $0.55, compared to $0.73 in 2017. Adjusted Net Income (Loss), after removing the impact of acquisition related costs and the non-recurring effects of tax reform, was $93.4 million in the third quarter of 2018, compared to $59.3 million in 2017. Third quarter Adjusted EPS was $1.18, compared to $0.97 in 2017. (See included financial tables for a reconciliation of “Adjusted” financial measures to the most directly comparable GAAP financial measures). Third quarter results were positively impacted by solid organic sales growth within non-residential roofing and complementary building products categories, improved existing markets gross margins and favorable contributions from acquired operations. Third quarter results were negatively impacted by a decline in residential roofing volumes and higher operating expenses, increased interest expense and the impact from preferred dividends primarily related to the acquisition of Allied.
Total sales increased 45.2% to a nine-month record of $4.48 billion, up from $3.09 billion in 2017. Residential roofing product sales increased 18.6%, non-residential roofing product sales increased 27.5% and complementary product sales increased 164.7% over the prior year. Existing markets sales, excluding acquisitions, increased 3.6% year to date. The nine months of fiscal years 2018 and 2017 each had 189 business days.
Net income attributable to common shareholders for the nine months was $38.3 million, compared to $55.7 million in 2017. The nine-month EPS was $0.51, compared to $0.91 in 2017. Adjusted Net Income (Loss), after removing the impact of acquisition related costs and the net benefit from one-time tax items, was $122.6 million year to date, compared to $98.7 million in 2017. The nine-month Adjusted EPS was $1.62, compared to $1.61 in 2017. (See included financial tables for a reconciliation of “Adjusted” financial measures to the most directly comparable GAAP financial measures). The nine-month results were positively impacted by organic sales growth, higher gross margins and beneficial tax adjustments. The nine-month results were negatively impacted by higher operating expenses, increased interest expense and the impact of preferred dividends primarily related to the acquisition of Allied.
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:
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 554 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.
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