Beacon Roofing Supply's net profit in its fiscal first quarter ended Dec. 31 shrank 58% to $7.8 million on a 20.6% slump in sales to $367.7 million, America's fifth-biggest pro-oriented LBM company reported today.
Peabody, Mass.-based Beacon gave four reasons why net sales shrank by $95.6 million from the $463.3 million in took in during the final three months of 2008. There was less re-roofing activity in areas affected by Hurricane Ike, a "significant decline" in non-residential roofing activity, continued weakness in residential roofing activity, and "continued weak complementary product sales in most markets."
The company's gross profit margin slipped just one percentage point from the year-earlier quarter, hitting 24%. Beacon said that decrease was largely because of a narrowing gap between what it paid to buy the products vs. the price it sold them. The drop was partially offset by increased "vendor incentive income from calendar year adjustments and short-term buying programs. " Meanwhile, operating expenses as a share of sales climbed to 19% in the fiscal first quarter from 16.9% in FY2009. This came even though the actual expenditures fell 10.8%, or $8.5 million, to total $69.8 million in the quarter.
By region, net sales shrank 9% from the previous year in the Northeast, slipped 4.8% in the Mid-Atlantic, grew 1.4% in the Southwest, slumped 50.5% in the Southwest, fell 21.3% in the Midwest, dropped 15.8% in the West, and rose 18.1% in Canada.
Sales of residential roofing products fell 26.2% in the October-December 2009 period to $173.2 million. That contrasts with a 15.5% decline in sales of non-residential roofing products, to $139.2 million, and a 13.5% fall in the sale of complementary building products, to $55.2 million. That meant residential roofing products accounted for 47.1% of all sales in 1Q10 (down from 50.7% a year before), while non-residential roofing products contributed 37.9% (previously 35.6%) and complementary building products provided 15% of sales (13.8%).
Beacon was the No. 5 company on last year's ProSales 100, with $1.78 billion of revenue in 2008. As of year-end 2008, it had 170 branches and 2,372 employeers. In today's report, Beacon said it had 173 branches (not counting an acquisition it made in Tennessee at the end of 2009) and 2,146 employees as of Dec. 31, 2009.