Net income at Beacon Roofing Supply, America's third-biggest pro-oriented construction supply company, fell 11.4% in the company's fiscal fourth quarter ended Sept. 30 on a 1.1% drop in sales to $482.6 million, the company reported today. The latest results meant net income for the fiscal year shrank 34.1% to $34.5 million on an 7.2% drop in sales to $1.61 billion.
"Our fourth quarter and fiscal 2010 results were disappointing as industry and economic conditions remained more challenging than anticipated," chairman and CEO Robert Buck said in a statement. "We were also up against a year [i.e., fiscal 2009] that had significant storm business and record annual earnings. Despite these factors, our total sales declined only 1% in the fourth quarter due, in part, to the positive impact from our current year acquisitions. In addition, our non-residential roofing and complementary product sales continued to rebound. We started to see some gains in residential business later in the year in a few of our regions that did not benefit from storms last year. Our operating expenses were well-controlled and we achieved a substantial build-up of cash in the fourth quarter. We believe the favorable long-term industry growth factors remain in place and we are in a good position to expand our company in 2011."
The 1.1% drop in fiscal fourth quarter sales came in part because Peabody, Mass.-based Beacon added seven branches during the fiscal year. Excluding those new operations, total sales fell 3.8% in the fourth quarter from the year earlier and were down 8.7% in fiscal 2010 from the prior year.
Adjusted EBITDA--earnings before interest, taxes, depreciation, and amortization, as well as before stock-based compensation--shrank to $38.9 million in the fiscal fourth quarter from $45.2 million in the July-September 2009 period, and declined 26.4% for fiscal 2009 to $106.3 million from $144.4 million.
Residential roofing sales in existing markets fell 16.8%, while non-residential roofing and complementary product sales increased 11.5% and 3.3%, respectively, the company said. "Residential roofing sales and gross margin were unfavorably impacted by lower average selling prices in 2010 and less re-roofing activity in post storm-affected regions," the company said.
For the year, residential roofing sales in existing markets shrank 18% but non-residential roofing sales went up 1.2% and complementary product sales increased by 2.1%.
Beacon stands third on the latest ProSales 100 listing, with roughly 175 branches nationwide and more than 2,250 employees.