Beacon Roofing Supply’s third quarter net income rose 7% to $27.2 million over same-quarter 2012 net income of $25.4 million, while setting record breaking quarterly sales of $627 million, a 12% increase over year-ago sales of $561 million, on the strength of acquisitions made throughout the quarter.
"We experienced a challenging demand environment during the third quarter of fiscal 2013, however we still recorded double-digit growth with sales up 12% over last year,” said Beacon president and CEO Paul Isabella
Most of the sales growth came through acquisitions, as poor weather kept roofing contractors on the ground throughout most of the country, dampening demand for the company’s products. Organic sales grew by 1.2% in the quarter.
The company acquired 19 branches this year, opening two in the third quarter and three new branches year to date. The company is on track to open another 10 branches throughout the rest of the year, and another 20 in 2014.
“Our sales growth occurred despite unusually heavy rains and other harsh weather factors in many of our markets that delayed spring and early summer roofing activities, as well as the negative impact from fewer hail storms during fiscal 2013 than in the prior year,” Isabella said.
“Harsh wet weather impacted a good portion of the quarter in most of our footprint,” Isabella said during an earnings call to investors. “Late winter snowfall in the Midwest and Mountain Region, and rain during most of the quarter in most regions prevented contactors from performing work.”
He said the soft demand as well as pricing pressures hurt gross margins, but a focus on cost controls limited the impact on earnings.
Isabella said Beacon was revising its earnings-per-share expectations down from an expected $1.80 a share to $1.50 to $1.60 a share. According to Isabella, if demand picks up and prices rise 5% or more, “we could achieve the higher end of that range, if not; it will be in the lower end of the range."
The Peabody, Mass.-company's earnings before interest, taxes, depreciation and amortization, and stock-based compensation (adjusted EBITDA, was $58 million in 2013 compared to $60.2 million in 2012, a decrease of 3.6%.
Beacon ranked third on the 2012 ProSales 100 ranking of the top U.S. building material dealers with $1.8 billion in sales to professional builders and contractors across 229 branches in the U.S. and Canada.