Exhibit 99.1

 

 

Beacon Roofing Supply Reports Third Quarter 2015 Results

 

·

Record third quarter sales of $718.2 million vs. $663.4 million in prior year (8.3% growth)

 

·

Third quarter EPS of $0.56 vs. $0.54 in prior year

 

·

Record nine month sales of $1,727.4 million vs. $1,600.4 million in prior year (7.9% growth)

 

·

Nine months diluted EPS of $0.63 vs. $0.59 in prior year

 

·

On July 27, announced agreement to acquire 83-branch Roofing Supply Group (“RSG”) for $1.1 billion with anticipated October 1, 2015 Closing

 

 

HERNDON, VA. — (BUSINESS WIRE) — August 6, 2015 — Beacon Roofing Supply, Inc. (the “Company”) (NASDAQ: BECN) announced results today for its third quarter ended June 30, 2015 of the fiscal year ending September 30, 2015 (“Fiscal 2015”).

 

Paul Isabella, the Company’s President and Chief Executive Officer, stated: “Today’s record third quarter earnings release continues the tremendous momentum from our July 27 announcement of Beacon’s agreement to acquire RSG. I look forward to the anticipated October 1, 2015 closing of the RSG acquisition and to have RSG’s 83 branches and talented and experienced workforce join Beacon and help deliver even greater service and product offerings to our customers. Until then, we will remain focused on driving growth and enhanced profitability across our 274 branches, which we accomplished in our third quarter. We delivered 8.3% sales growth in the quarter and 7.9% sales growth year-to-date, which resulted in record revenues for the third quarter and nine months. All three product lines grew compared to last year with residential and complementary leading the way with 13.2% and 9.8% growth, respectively. This marks the fifth consecutive quarter in which all three product lines grew, demonstrating the strength of our diversified portfolio. Also encouraging is that our growth pace accelerated solidly through the quarter after difficult weather conditions in April and early May, particularly in our West Division. Sales grew in six of our seven regions, with three regions recording double-digit gains. Gross margins improved by 90 basis points, mainly driven from a mix shift into higher margin residential and complementary business. As we look towards the fourth quarter, and the exciting closing of the RSG acquisition at the start of next year, we are confident that we will build upon the third quarter’s solid performance to finish the year strongly and deliver superior value to our customers and shareholders.”

 

Third Quarter

 

Total sales increased 8.3% to $718.2 million in 2015, from $663.4 million in 2014. On an overall consolidated basis, residential roofing product sales increased 13.2%, non-residential roofing product sales increased 1.3%, and complementary product sales increased 9.8% over the prior year. Existing market sales, excluding acquisitions, increased 4.9% for the quarter. The third quarter of 2015 and 2014 both had the same number of business days.

 

Net income for the third quarter was $28.3 million, compared to $26.8 million in 2014. The third quarter net income per share was $0.56, compared to $0.54 in 2014. The net income for the quarter was favorably impacted by gross margins which improved by 90 basis points over the prior year. This was partially offset by increased operating expenses driven by the incremental costs associated with the three acquisitions made this fiscal year and the greenfields opened in the last 21 months.

 

Nine Months

 

Total sales increased 7.9% to a nine month record of $1,727.4 million in 2015, from $1,600.4 million in 2014. On an overall consolidated basis, residential roofing product sales increased 11.7%, non-residential roofing product sales increased 0.8%, and complementary product sales increased 14.2% over the prior year. Existing market sales, excluding acquisitions, increased 4.6% year to date. The nine months of 2015 and 2014 both had the same number of business days.

 

 

Net income for the nine months was $31.5 million, compared to $29.6 million in 2014. The nine months diluted net income per share was $0.63, compared to $0.59 in 2014. Net income for the nine months was favorably impacted by gross margins which improved by 60 bps over the prior year, and unfavorably impacted by increased operating expenses which were primarily driven by the incremental costs associated with the three acquisitions made this fiscal year and the greenfields opened in the last 21 months.

 

Cash flow from operations was $11.2 million in 2015, compared to ($46.8) million in 2014. This increase in operating cash flow was primarily impacted by changes in working capital and higher net income in the current year. Cash on hand decreased by $8.8 million due primarily to an increase in cash used for acquisition activities in 2015. Through positive working capital management and higher net income, the Company was able to fund three acquisitions, while improving its leverage ratio from 2.04 as compared to 2.26 at the end of the third quarter 2014.

 

The Company will host a webcast and conference call today at 10:00 a.m. (EST) to discuss these results. The live webcast of the call, along with a webcast replay after the call, can be accessed at http://ir.beaconroofingsupply.com/events.cfm (the “Events & Presentations” page of the “Investor Relations” section of the Company’s web site). There will be a slide presentation of the results available on that page of the website as well. For those unable to connect to the Internet or who may wish to ask questions, the conference call dial-in number is 719-325-2308. To assure timely access, call participants should call in before 10:00 a.m.

 

 

About Beacon Roofing Supply

 

Founded in 1928, Beacon Roofing Supply, Inc. (NASDAQ: BECN) is the largest publicly traded distributor of residential and commercial roofing materials and complementary building products, operating 274 branches throughout 42 states in the U.S. and six provinces in Canada. In fiscal 2014, Beacon had sales of $2.3 billion. The company employs more than 3,000 associates. To learn more about Beacon and its family of regional brands, please visit www.becn.com.

 

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.

 

BECN-F

 

Beacon Roofing Supply, Inc.
Joseph Nowicki, 571-323-3940
Executive Vice President & Chief Financial Officer
JNowicki@becn.com

 

Source: Beacon Roofing Supply, Inc.

 

News Provided by Acquire Media

 

 

BEACON ROOFING SUPPLY, INC

Consolidated Statements of Operations

(unaudited; in thousands, except share and per share amounts)

 

		Three Months Ended June 30,																Nine Months Ended June 30,
		2015				% of Net Sales				2014				% of Net Sales				2015				% of Net Sales				2014				% of Net Sales
Net sales		$	718,214				100.0	%		$	663,397				100.0	%		$	1,727,440				100.0	%		$	1,600,411				100.0	%
Cost of products sold			548,778				76.4	%			512,584				77.3	%			1,323,666				76.6	%			1,235,901				77.2	%
Gross profit			169,436				23.6	%			150,813				22.7	%			403,774				23.4	%			364,510				22.8	%
Operating expenses			121,445				16.9	%			105,004				15.8	%			345,852				20.0	%			308,826				19.3	%
Income from operations			47,991				6.7	%			45,809				6.9	%			57,922				3.4	%			55,684				3.5	%
Interest expense, financing costs and other			2,494				0.3	%			2,510				0.4	%			7,988				0.5	%			7,707				0.5	%
Income before provision for income taxes			45,497				6.3	%			43,299				6.5	%			49,934				2.9	%			47,977				3.0	%
Provision for income taxes			17,148				2.4	%			16,500				2.5	%			18,464				1.1	%			18,338				1.1	%
Net income		$	28,349				3.9	%		$	26,799				4.0	%		$	31,470				1.8	%		$	29,639				1.9	%
Net income per share:
Basic		$	0.57							$	0.54							$	0.64							$	0.60
Diluted		$	0.56							$	0.54							$	0.63							$	0.59
Weighted average shares used in computing net income per share:
Basic			49,638,251								49,315,892								49,526,436								49,185,893
Diluted			50,199,126								50,027,240								50,089,987								49,946,381

 

 

BEACON ROOFING SUPPLY, INC

Consolidated Balance Sheets

(in thousands)

 

		June 30, 2015				September 30, 2014				June 30, 2014
		(unaudited)				(audited)				(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	17,594			$	54,472			$	26,405
Accounts receivable, net			389,499				360,802				352,554
Inventories, net			386,812				301,626				399,619
Prepaid expenses and other current assets			99,505				66,828				72,048
Deferred income taxes			-				14,610				14,376
Total current assets			893,410				798,338				865,002
Property and equipment, net			88,868				88,565				81,433
Goodwill			498,499				466,206				467,916
Intangible assets, net			91,419				72,266				77,747
Other assets, net			3,143				8,521				7,094
TOTAL ASSETS		$	1,575,339			$	1,433,896			$	1,499,192
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	257,656			$	220,834			$	227,630
Accrued expenses			105,756				80,285				102,539
Borrowings under revolver lines of credit			74,110				18,514				88,331
Current portion of long-term obligations			16,474				16,602				15,466
Total current liabilities			453,996				336,235				433,966
Senior term loan, net of current portion			177,188				185,625				188,438
Deferred income taxes			68,099				64,100				60,024
Long-term obligations under equipment financing and other, net of current portion			23,602				30,835				23,152
Total  liabilities			722,885				616,795				705,580
Commitments and contingencies
Stockholders’ equity:
Common stock			496				493				493
Undesignated preferred stock			-				-				-
Additional paid-in capital			340,468				328,059				325,086
Retained earnings			526,598				495,128				470,921
Accumulated other comprehensive loss			(15,108	)			(6,579	)			(2,888	)
Total stockholders’ equity			852,454				817,101				793,612
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	1,575,339			$	1,433,896			$	1,499,192

 

 

BEACON ROOFING SUPPLY, INC

Consolidated Statements of Cash Flows

(unaudited; in thousands)

 

		Nine Months Ended June 30,
		2015				2014
Operating activities:
Net income		$	31,470			$	29,639
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation and amortization			25,920				22,609
Stock-based compensation			7,305				5,239
Certain interest expense and other financing costs			814				816
Gain on sale of fixed assets			(609	)			(660	)
Deferred income taxes			(589	)			793
Adjustment of liability for contingent consideration and other			286				177
Changes in assets and liabilities, net of the effects of
businesses acquired:
Accounts receivable			(20,581	)			(23,789	)
Inventories			(73,717	)			(148,384	)
Prepaid expenses and other assets			(7,168	)			(12,697	)
Accounts payable and accrued expenses			48,091				79,475
Net cash provided by (used in) operating activities			11,222				(46,782	)
Investing activities:
Purchases of property and equipment			(13,787	)			(26,090	)
Acquisition of businesses			(85,301	)			-
Proceeds from sales of assets			804				760
Net cash used in investing activities			(98,284	)			(25,330	)
Financing activities:
Repayments under revolving lines of credit, net of repayments			56,778				40,647
Borrowings/(Repayments) under equipment financing facilities and other			(4,114	)			11,450
Repayments under senior term loan			(8,438	)			(8,437	)
Proceeds from exercise of options			5,107				6,890
Excess tax benefit from stock-based compensation			1,245				949
Net cash used in financing activities			50,578				51,499
Effect of exchange rate changes on cash			(394	)			(9	)
Net decrease in cash and cash equivalents			(36,878	)			(20,622	)
Cash and cash equivalents, beginning of period			54,472				47,027
Cash and cash equivalents, end of period		$	17,594			$	26,405

 

 

BEACON ROOFING SUPPLY, INC

(unaudited; dollars in millions)

 

Consolidated Sales by Product Line

Three Months Ended

 

		June 30, 2015								June 30, 2014
		Net Sales				Mix %				Net Sales				Mix %				Change
Residential roofing products		$	359.5				50.1	%		$	317.5				47.9	%		$	42.0				13.2	%
Non-residential roofing products			252.7				35.2	%			249.4				37.6	%			3.3				1.3	%
Complementary building products			106.0				14.7	%			96.5				14.5	%			9.5				9.8	%
		$	718.2				100.0	%		$	663.4				100.0	%		$	54.8				8.3	%

 

Consolidated Sales by Product Line for Existing Markets*

Three Months Ended

 

		June 30, 2015								June 30, 2014
		Net Sales				Mix %				Net Sales				Mix %				Change
Residential roofing products		$	346.8				49.8	%		$	317.5				47.9	%		$	29.2				9.2	%
Non-residential roofing products			252.0				36.2	%			249.4				37.6	%			2.6				1.1	%
Complementary building products			97.1				14.0	%			96.5				14.5	%			0.6				0.6	%
		$	695.9				100.0	%		$	663.4				100.0	%		$	32.5				4.9	%

 

Existing Market Sales By Business Day**

Three Months Ended

 

		June 30, 2015								June 30, 2014
		Net Sales				Mix %				Net Sales				Mix %				Change
Residential roofing products		$	5.419				49.8	%		$	4.961				47.9	%		$	0.458				9.2	%
Non-residential roofing products			3.938				36.2	%			3.896				37.6	%			0.042				1.1	%
Complementary building products			1.517				14.0	%			1.508				14.5	%			0.009				0.6	%
		$	10.874				100.0	%		$	10.366				100.0	%		$	0.509				4.9	%

 

Note: Some totals above may not foot due to rounding.

 

*

Excludes branches acquired during the four quarters prior to the start of the third quarter of Fiscal 2015.

**

There were 64 business days in each of the quarters ended June, 2015 and 2014.

 

 

BEACON ROOFING SUPPLY, INC

(unaudited; dollars in millions)

 

Consolidated Sales by Product Line

Nine Months Ended

 

		June 30, 2015								June 30, 2014
		Net Sales				Mix %				Net Sales				Mix %				Change
Residential roofing products		$	843.7				48.8	%		$	755.6				47.2	%		$	88.1				11.7	%
Non-residential roofing products			609.4				35.3	%			604.7				37.8	%			4.7				0.8	%
Complementary building products			274.3				15.9	%			240.1				15.0	%			34.2				14.2	%
		$	1,727.4				100.0	%		$	1,600.4				100.0	%		$	127.0				7.9	%

 

Consolidated Sales by Product Line for Existing Markets*

Nine Months Ended

 

		June 30, 2015								June 30, 2014
		Net Sales				Mix %				Net Sales				Mix %				Change
Residential roofing products		$	814.0				48.6	%		$	755.6				47.2	%		$	58.4				7.7	%
Non-residential roofing products			607.1				36.3	%			604.7				37.8	%			2.4				0.4	%
Complementary building products			252.8				15.1	%			240.1				15.0	%			12.7				5.3	%
		$	1,673.9				100.0	%		$	1,600.4				100.0	%		$	73.5				4.6	%

 

Existing Market Sales By Business Day**

Nine Months Ended

 

		June 30, 2015								June 30, 2014
		Net Sales				Mix %				Net Sales				Mix %				Change
Residential roofing products		$	4.307				48.6	%		$	3.998				47.2	%		$	0.309				7.7	%
Non-residential roofing products			3.212				36.3	%			3.199				37.8	%			0.013				0.4	%
Complementary building products			1.338				15.1	%			1.271				15.0	%			0.067				5.3	%
		$	8.857				100.0	%		$	8.468				100.0	%		$	0.389				4.6	%

 

Note: Some totals above may not foot due to rounding.

 

*

Excludes branches acquired during the four quarters prior to the start of the third quarter of Fiscal 2015.

**

There were 189 business days in each of the nine months ended June 30, 2015 and 2014.