Beacon Roofing Reports In Line

Beacon Roofing Supply, Inc. (BECN) reported fourth-quarter 2012 adjusted earnings per share (EPS) of 60 cents, in line with the Zacks Consensus Estimate and 7% higher than the year-ago quarter. Higher sales on the back of accretive acquisitions and gross margin expansion contributed to the growth, partially offset by higher operating expenses. Including special items, EPS in the quarter stood at 58 cents, down 13% year over year from 67 cents.

Operational Update

Total revenue increased 4% year over year to $598 million, falling short of the Zacks Consensus Estimate of $600 million. Organic sales declined 5.6% in the quarter. In existing markets, complementary product sales increased 1.2% while both residential and non-residential roofing product sales decreased 3.3% and 10.5%, respectively. The year-ago quarter included the benefit from substantial roofing activities due to the hail storms in spring 2011.

Cost of goods sold increased 1.3% to $448 million in the quarter. Gross profit rose 13% to $150 million. Gross margin contracted 190 basis points to 25% from the year-ago quarter. Operating income in the reported quarter inched up 1% to $48 million with operating margin dipping 20 basis points to 8.1%.

Fiscal 2012 Performance

Beacon Roofings adjusted EPS in fiscal 2012 jumped 44% year over year to $1.67, helped by increased sales and gross margins, somewhat offset by higher operating expenses and a higher income tax provision. EPS was in line with the Zacks Consensus Estimate. Including special items, EPS stood at $1.58 compared with $1.27 in the prior year.

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Beacon Roofing Reports In Line