Beacon Roofing Supply, Inc.
) reported second-quarter 2012 earnings of 7 cents per share,
easily beating the Zacks Consensus Estimate of a loss of 8 cents.
Results improved compared to a loss of 13 cents in the year-ago
Increase in sales and gross margin contributed to the growth.
However, the positives were partially offset by higher operating
expenses and income tax provision as compared to 2011.
Total revenues increased 33.4% year over year to $395.2 million,
beating the Zacks Consensus Estimate of $346 million. Organic
growth increased 28.2% in the quarter.
Residential roofing product sales improved 46.0% while
non-residential roofing product sales increased 17.4% from the
prior-year quarter. Sales benefited from improved re-roofing and
remodeling activities including impact of weather conditions, along
with stronger businesses in many markets that experienced storms
during 2011 as well as average selling prices. Complimentary
product sales increased 6.7% in the quarter.
Cost of goods sold increased 30.4% to $301.4 million in the
quarter. Gross profit rose 43.7% to $93.7 million. Operating income
in the reported quarter improved to $9.75 million from a loss of
$6.83 million in the year-ago quarter.
Cash and cash equivalents were $171.1 million as of March 31,
2012, compared with $178.4 million as of March 31, 2011. Current
portion of long-term debt amounted to $86.7 million as of March 31,
2012, compared with $9.1 million as of March 31, 2011.
Cash inflow from operating activities was $80.3 million during
the second-quarter of 2012 compared with $68.8 million during the
second-quarter of 2011. Cash flows in the first half of 2012 were
positively impacted by higher net income, partially offset by less
favorable changes in working capital.
The company was benefited by the ramp up in roofing and exterior
remodeling activities. The price increases occurring mostly in the
second half of 2011 also added to the benefits. Beacon expects a
strong second half in fiscal 2012 boosted by a robust balance sheet
and credit facility conditions.
Currently, we have a long-term Neutral recommendation on Beacon.
The stock retains a short-term Zacks #3 Rank (Hold).
Beacon is one of 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 Inc.
BEACON ROOFING (BECN): Free Stock Analysis
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