Beacon Roofing reports fiscal Q1 earnings of US$10.1M, up 28.4% year-over-year, helped by a revival in commercial and complementary businesses and healthy gains in residential business in some regions

Audrey Dixon

PEABODY, Massachusetts , February 9, 2011 (press release) – * First quarter net sales of $405 million vs. $368 million.
* First quarter EPS of $0.22 vs. $0.17.
* First quarter existing market sales up 6.6%.
* Cash on hand builds to $176 million.

Beacon Roofing Supply, Inc. (the “Company”) (NASDAQ: BECN) announced results today for its fiscal 2011 first quarter ended December 31, 2010.

Paul Isabella, the Company’s President & Chief Executive Officer, stated: “Our first quarter 2011 results exceeded our expectations. Our commercial and complementary businesses bounced back well from low prior year levels and some of our regions experienced healthy gains in residential business as well. We continued to tightly control our operating expenses, and we increased our cash holdings by another $59 million in the first quarter. Our gross margin improved significantly from recent quarters, and we are optimistic about fiscal year 2011 based on the good start to the year.”

First Quarter

Total sales increased 10.1% to $404.8 million in 2011 from $367.7 million in 2010, while existing market (organic) sales increased 6.6%. Existing market results exclude seven branches acquired subsequent to December 31, 2009. Non-residential roofing and complementary product sales in existing markets increased 13.6% and 12.1%, respectively, while residential roofing sales decreased 0.8%. Residential roofing sales continued to be especially weak in markets affected by storms in 2009.

Net income for the first quarter was $10.1 million compared to $7.8 million in 2010, an increase of 28.4%. Diluted net income per share was $0.22 compared to $0.17 in 2010, an increase of 29.4%. The improved net income was due to the higher sales along with lower interest expense, partially offset by the impact from a lower gross margin rate, compared to last year’s first quarter, as well as higher expenses and income taxes.

Earnings before interest, taxes, depreciation and amortization, and stock-based compensation (“Adjusted EBITDA”), which is reconciled to the net income in this press release, were $27.7 million in 2011 compared to $27.1 million in 2010, an improvement of 2.5%.

Cash flow from operations was $57.5 million compared to $29.5 million in 2010. This year’s cash flows were influenced mostly by a lower reduction in accounts payable and accrued expenses compared to last year, partially offset by an unfavorable impact from lower decreases in accounts receivable and inventories this year. Cash on hand increased by $65.4 million to $175.7 million at December 31, 2010 compared to $110.2 million at December 31, 2009.

The Company will host a webcast and conference call today at 10:00 a.m. ET 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 720-545-0063. To assure timely access, call participants should call in before 10:00 a.m.

Beacon Roofing Supply, Inc. is a leading distributor of roofing materials and complementary building products, operating 177 branches in 37 states in the United States and in three provinces in Eastern Canada.

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