Beacon Roofing Supply, Inc. Reports Strong Second-Quarter and First-Half 2005 Results.PEABODY Peabody (pē`bədē, –bädē), city (1990 pop. 47,039), Essex co., NE Mass., a suburb of Boston, on the Danvers River; settled c.1633, inc. as South Danvers 1855, name changed 1868. , Mass. -- Beacon Beacon, city (1990 pop. 13,243), Dutchess co., SE N.Y., on the E bank of the Hudson River; settled 1663, inc. in 1913 when Fishkill Landing and Matteawan villages were united. Roofing Supply, Inc. (Nasdaq: BECN (Backward Explicit Congestion Notification) A frame relay message that notifies the sending device that a congestion avoidance procedure should be initiated. See FECN. ) (the "Company") announced today record performance for the second quarter and first half (six months) ended March 31, 2005 of the fiscal year ending September September: see month. 24, 2005. Second Quarter Sales increased 38.7% to $172.1 million in the second quarter of fiscal 2005 ("2005") from $124.1 million in fiscal 2004 ("2004"), reflecting strong internal growth of 17.0% or $21.1 million, with the strongest sales occurring in non-residential roofing. The Company also opened two new branches during the second quarter. JGA JGA Juxtaglomerular Apparatus JGA Jamnagar, India (Airport Code) JGA Junior Golf Association JGA Justice Guild of America (comic) JGA Japan Gymnastics Association JGA Jordanian Geologists' Association Corp. ("JGA"), acquired in mid-December Noun 1. mid-December - the middle part of December period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" Dec, December - the last (12th) month of the year , contributed the remaining sales increase of $26.9 million. Gross profit increased 27.1% to $41.4 million in 2005 from $32.6 million in 2004. Gross margin as a percentage of net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight declined from 26.2% to 24.0% due primarily to the substantial increase in lower-margin non-residential roofing sales and the inclusion of JGA and its product mix. Selling, general and administrative (SG&A) expenses increased $7.1 million or 24.7% in 2005 compared to 2004 but declined as a percentage of net sales to 20.7% in 2005 from 23.1% in 2004. The dollar increase was primarily due to the inclusion of JGA's expenses for the full second quarter, higher transportation and payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. costs associated with higher fuel costs and the sales volume increase, and higher professional fees that now incorporate the costs of public-company reporting and implementing the provisions of the Sarbanes-Oxley Act See SOX. . Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 66.7% to $5.5 million in 2005 from $3.3 million in 2004. As a percentage of net sales, operating income increased to 3.2% from 2.6%. Interest expense declined $2.2 million to $1.2 million in 2005, primarily from a lower debt level after the Company's initial public offering ("IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. "). The Company achieved second-quarter net income of $2.4 million in 2005 compared to a net loss of $10.0 million in 2004. The net loss in 2004 included a $3.3 million charge ($2.0 million net of tax) for the early retirement of debt and an $8.1 million non-deductible charge for the change in the value of the Company's warrant derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. . All of the warrants were redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. with the proceeds of our IPO on September 28, 2004 and we will not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. future charges for these derivatives. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income per share for the second quarter was $0.09 in 2005 compared to a loss of $0.56 per share in 2004. First Half Sales increased 26.9% to $371.3 million in the first half of 2005 from $292.7 million in 2004, reflecting strong internal growth of 16.3% or $47.7 million, with the strongest sales occurring in non-residential roofing and three new branches opened since last year. JGA contributed the remaining sales increase of $30.9 million. Gross profit increased 21.7% to $91.7 million in 2005 from $75.4 million in 2004. Gross margin as a percentage of net sales declined from 25.8% to 24.7% due primarily to the substantial increase in lower-margin non-residential roofing sales and the inclusion of JGA and its product mix. SG&A expenses increased $11.5 million or 20.2% in 2005 compared to 2004 but declined as a percentage of net sales to 18.5% in 2005 from 19.6% in 2004. The dollar increase was primarily due to the inclusion of JGA's expenses since mid-December, higher transportation and payroll costs associated with higher fuel costs and the sales volume increase, and higher professional fees for the factors mentioned above for the second quarter. Operating income increased 29.1% to $22.8 million in 2005 from $17.7 million in 2004. As a percentage of net sales, operating income increased to 6.1% from 6.0%. Interest expense declined $4.9 million to $2.1 million in 2005, primarily from a lower debt level after the Company's IPO. The Company achieved first-half net income of $11.2 million in 2005 compared to a net loss of $6.9 million in 2004. The net loss in 2004 included the $3.3 million charge ($2.0 million net of tax) for the early retirement of debt and an $11.0 million non-deductible charge for the change in the value of the Company's warrant derivatives. Diluted net income per share for the first half was $0.41 in 2005 compared to a loss of $0.39 per share in 2004. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $5.4 million in the first half of 2005 compared to $12.3 million in 2004. Cash flow from operations in 2005 was impacted by an increase of $20.4 million in inventories, partially in anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of some price increases and temporary product shortages. The Company's IPO was completed on September 22, 2004 and the proceeds were received on September 28, 2004, a few days after the Company's fiscal 2004 year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . The IPO proceeds were utilized to pay off notes payable, redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. the warrants and pay down revolving lines of credit. In December December: see month. , the Company borrowed approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $30 million under its revolving lines of credit to acquire JGA. Robert Buck Robert Buck can refer to:
1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. business acquisitions." Beacon Roofing Supply will be holding its investor conference call today, May 11, 2005, at 11:00 a.m. Eastern Time. The dial-in-number is 800.638.5439 (Participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. Passcode 53255908). Please call five to ten minutes prior to the scheduled start-time to assure timely access to the call. About Beacon Roofing Supply Inc.: Beacon Roofing Supply, Inc. is a leading distributor of roofing materials and complementary building products operating 79 branches in key metropolitan markets in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. , Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic , Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Southwest or south west may also refer to:
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions under The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 "Risks Relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Our Business and Industry" section of the Company's latest Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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.
BEACON ROOFING SUPPLY, INC.
Consolidated Statements of Operations (Unaudited)
---------------------------------------------------------------------
Three Months Ended
------------------------------------------
(Dollars in thousands, March 31, % of March 31, % of
except per share data) 2005 Sales 2004 Sales
---------------------------------------------------------------------
Net sales $172,116 100.0% $124,081 100.0%
Cost of products sold 130,746 76.0% 91,520 73.8%
----------------------------------------
Gross profit 41,370 24.0% 32,561 26.2%
----------------------------------------
Operating expenses:
Selling, general and
administrative expenses 35,722 20.7% 28,635 23.1%
Stock-based compensation 172 0.1% 642 0.5%
----------------------------------------
35,894 20.8% 29,277 23.6%
----------------------------------------
Income from operations 5,476 3.2% 3,284 2.6%
----------------------------------------
Other expenses:
Interest expense 1,185 0.7% 2,682 2.2%
Interest expense-related
party - - 741 0.6%
Change in value of
warrant derivatives - - 8,081 6.5%
Loss on early retirement
of debt - - 3,285 2.6%
----------------------------------------
1,185 0.7% 14,789 11.9%
----------------------------------------
Income (loss) before income
taxes 4,291 2.5% (11,505) -9.3%
Income taxes 1,873 1.1% (1,502) -1.2%
----------------------------------------
Net income (loss) $2,418 1.4% $(10,003) -8.1%
========================================
Net income (loss) per
share:
Basic $0.09 $(0.56)
=========== ===========
Diluted $0.09 $(0.56)
=========== ===========
Weighted average shares
used in computing net
income (loss) per share:
Basic 26,384,001 17,838,459
=========== ===========
Diluted 27,344,123 17,838,459
=========== ===========
BEACON ROOFING SUPPLY, INC.
Consolidated Statements of Operations (Unaudited)
----------------------------------------------------------------------
Six Months Ended
------------------------------------------
(Dollars in thousands, March 31, % of March 31, % of
except per share data) 2005 Sales 2004 Sales
----------------------------------------------------------------------
Net sales $371,306 100.0% $292,667 100.0%
Cost of products sold 279,590 75.3% 217,303 74.2%
----------------------------------------
Gross profit 91,716 24.7% 75,364 25.8%
----------------------------------------
Operating expenses:
Selling, general and
administrative expenses 68,561 18.5% 57,057 19.6%
Stock-based compensation 346 0.1% 642 0.2%
----------------------------------------
68,907 18.6% 57,699 19.8%
----------------------------------------
Income from operations 22,809 6.1% 17,665 6.0%
----------------------------------------
Other expenses:
Interest expense 2,051 0.6% 5,482 1.8%
Interest expense-related
party 26 - 1,483 0.5%
Change in value of warrant
derivatives - - 11,000 3.8%
Loss on early retirement of
debt 915 0.2% 3,285 1.1%
----------------------------------------
2,992 0.8% 21,250 7.3%
----------------------------------------
Income (loss) before income
taxes 19,817 5.3% (3,585) -1.2%
Income taxes 8,656 2.3% 3,272 1.1%
----------------------------------------
Net income (loss) $11,161 3.0% $(6,857) -2.3%
========================================
Net income (loss) per share:
Basic $0.42 $(0.39)
=========== ===========
Diluted $0.41 $(0.39)
=========== ===========
Weighted average shares used
in computing net income
(loss) per share:
Basic 26,371,317 17,805,460
=========== ===========
Diluted 27,323,528 17,805,460
=========== ===========
BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Balance Sheets
----------------------------------------------------------------------
(Unaudited)(Unaudited)
(Dollars in thousands) March 31, March 31, September 25,
2005 2004 2004
----------------------------------------------------------------------
Assets
Current assets:
Cash $8,522 $1,595 $-
Accounts receivable, net 91,117 68,740 93,824
Inventories 95,980 69,877 68,573
Prepaid expenses and other
assets 16,499 8,508 14,974
Deferred income taxes 3,227 2,320 3,223
----------------------------------
Total current assets 215,345 151,040 180,594
Property and equipment, net 29,392 24,146 25,101
Goodwill 104,375 93,876 94,162
Other assets, net 12,988 1,870 1,641
----------------------------------
Total assets $362,100 $270,932 $301,498
==================================
Liabilities and stockholders'
equity
Current liabilities:
Cash overdraft $- $- $3,694
Borrowings under revolving
lines of credit 67,859 52,392 44,592
Accounts payable 74,197 53,105 74,043
Accrued expenses 29,320 21,590 21,524
Warrant derivative
liability - 6,942 34,335
Current portions of long-
term debt and capital
lease obligations 6,161 6,125 6,152
----------------------------------
Total current liabilities 177,537 140,154 184,340
Senior notes payable and other
obligations,
net of current portion 20,990 24,149 22,660
Junior subordinated notes
payable - 16,432 17,071
Subordinated notes payable to
related parties - 28,243 29,442
Deferred income taxes 9,045 8,547 8,764
Long-term obligations under
capital leases, net of current
portion 814 1,045 976
Warrant derivative liabilities - 15,984 -
Stockholders' equity:
Common stock 266 181 266
Additional paid-in capital 140,135 28,248 140,067
Deferred compensation (344) (1,324) (690)
Treasury stock (515) (515) (515)
Retained earnings (deficit) 10,295 7,630 (867)
Common stock subscription
receivable - - (102,765)
Accumulated other comprehensive
income 3,877 2,158 2,749
----------------------------------
Total stockholders' equity 153,714 36,378 38,245
----------------------------------
Total liabilities and
stockholders' equity $362,100 $270,932 $301,498
==================================
BEACON ROOFING SUPPLY, INC.
Condensed Consolidated Cash Flows
---------------------------------------------------------------------
Unaudited Six Months Ended March 31,
(Dollars In thousands) 2005 2004
---------------------------------------------------------------------
Operating activities:
Net income (loss) $11,161 $(6,857)
Adjustments to reconcile net income
(loss)to net cash provided by
operating activities:
Depreciation and amortization 3,940 3,427
Deferred interest - 2,545
Stock-based compensation 345 642
Change in value of warrant
derivatives - 11,000
Loss on early retirement of debt 915 3,285
Deferred income taxes 232 (201)
Changes in assets and liabilities,
net of the effects of business
acquired:
Accounts receivable 14,195 18,696
Inventories (20,441) (14,618)
Prepaid expenses and other
assets 1,826 1,239
Accounts payable and accrued
expenses (6,738) (6,842)
----------------------------
Net cash provided by operating activities 5,435 12,316
Investing activities:
Purchases of property and equipment, net
of sale proceeds (4,791) (1,228)
Acquisition of business, net of cash
acquired (30,334) -
----------------------------
Net cash used in investing activities (35,125) (1,228)
Financing activities:
Borrowings under revolving lines of
credit 22,994 49,786
Borrowings (repayments) under senior
notes payable, and other (1,791) 29,846
Repurchase of warrants (34,335) -
Early retirement of debt - (66,556)
Repayments of junior subordinated notes
and warrants (17,986) (21,500)
Repayments of subordinated notes payable
to related parties (29,442) -
Proceeds from sale of common stock 102,833 250
Deferred financing costs (342) (1,400)
----------------------------
Net cash provided by (used in) financing
activities 41,931 (9,574)
Effect of exchange rate changes on cash (25) 17
----------------------------
Net increase in cash 12,216 1,531
Cash (overdraft) at beginning of year (3,694) 64
----------------------------
Cash at end of period $8,522 $1,595
============================
Non-cash transactions:
Capital lease additions $- $703
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