Beacon Roofing Supply Inc.
) reported adjusted EPS of 39 cents in the first quarter of fiscal
2012, way ahead of the Zacks Consensus Estimate of 29 cents,
improving from the prior-year quarter of 22 cents. Reported EPS
excluded a tax benefit in the reported quarter, including which the
EPS stood at 41 cents compared with 22 cents in the year-ago
Higher sales leading to elevated gross margins benefited the
quarter. However, the positives were somewhat offset by higher
operating expenses and a higher income tax provision.
Net sales in the quarter under review increased 21% year over
year to gross $489.9 million, outpacing the Zacks Consensus
Estimate of $475 million. Organic growth in the quarter was
Residential roofing product sales improved 25.4% while
non-residential roofing product sales increased 15.5% over the
prior-year quarter. Both the businesses benefited from a pick-up in
re-roofing activities, including impact of storm related business,
besides higher average selling prices. A 2.6% dip in complementary
product sales was a minor offset.
Cost of goods sold in the reported quarter increased 20.2%% year
over year to $372.5 million, and operating expenses also rose 10.7%
to $82.9 million. Operating income of $34.3 million improved 73%
over the year-ago quarter.
Cash and cash equivalents were $155.2 million as of December 31,
2011, compared with $175.7 million as of December 31, 2010. Cash
from operating activities improved marginally to $58.9 million as
of December 31, 2011 from $57.5 million as of December 31, 2010.
Higher operating income was partially offset by an unfavorable
impact on working capital.
Beacon Roofing continues to focus on cost controls to improve
its margins. The company also remains active on the acquisition
front. The company's strategy is to buy market leaders in different
geographic areas and thus expand into potential yet unexplored
Currently, the shares of Beacon Roofing maintain a Zacks#1 Rank
(short-term "Strong Buy" recommendation).
Beacon numbers among the three largest roofing material
distributors in the United States and Canada, with more than 90% of
sales coming from the U.S. Beacon competes with privately held
American Builders & Contractors Supply Co Inc., Guardian
Building Products Distribution Inc. and Stock Building Supply
BEACON ROOFING (
): Free Stock Analysis Report
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