Beacon Roofing Supply Reports Fourth Quarter and Annual 2012 Results

PEABODY, Mass.--(BUSINESS WIRE)--

Beacon Roofing Supply, Inc. (the Company) (BECN) announced results today for its fourth quarter and fiscal year ended September 30, 2012.

Paul Isabella, the Companys President and Chief Executive Officer, stated: We are very pleased with our record quarter and annual 2012 results, which exceeded our expectations. Our total sales benefited from the positive impact of acquisitions and from a 6% increase in existing market sales for the year. The adjusted fourth quarter net income exceeded last years adjusted net income, even though we were facing a very challenging comparison to last years fourth quarter, when there were substantial roofing activities from hail storms. Our gross margin continued to improve over the prior year, and our annual operating margin was significantly higher than in 2011. We are confident in the long-term growth opportunities available in our industry and are actively investing to realize those opportunities, such as with our most recent acquisition of McClure-Johnston.

Fourth Quarter

Total sales increased 3.9% to $598.1 million in 2012 from $575.6 million in 2011. Existing market (organic) sales, which exclude branches acquired after the beginning of last years fourth quarter, declined 5.6% (4.1% based on the same number of business days). In existing markets, residential and non-residential roofing product sales decreased 3.3% and 10.5%, respectively, while complementary product sales increased 1.2%. This years fourth quarter sales were primarily impacted by lower roofing activity in the markets affected by last years hail storms, partially offset by the benefit of slightly higher overall average selling prices.

Net income for the fourth quarter was $27.9 million compared to $31.3 million in 2011. Fourth quarter diluted net income per share was $0.58 compared to $0.67 in 2011. The lower net income was due primarily to a one-time income tax benefit of $5.1 million, or $0.11 diluted income per share, realized in 2011. The benefit in 2012 from the higher sales and gross margin rate and lower interest expense was partially offset by the impact from higher operating expenses compared to 2011. Earnings in the fourth quarter of fiscal 2012 were also impacted by the following items: a charge of $3.0 million ($1.8 million net of tax), or approximately $0.04 diluted earnings per share, for the recognition of termination benefits in operating expenses associated with an acquisition and the announced retirement of our CFO; and a benefit of $1.1 million ($0.7 million net of tax), or approximately $0.01 diluted earnings per share, for the recognition of the change in the fair value of certain interest rate derivatives in interest expense and other financing costs. Below is a recap of the calculation of our adjusted diluted income per share for the fourth quarter of this year and last year (in thousands except per share amounts):

EPS

EPS

Change in fair value of certain interest rate derivatives

The calculations of the adjusted diluted income and income per share for 2012 do not add down due to rounding.

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Beacon Roofing Supply Reports Fourth Quarter and Annual 2012 Results