The eight branches Beacon Roofing Supply added since June 2009 helped it record a 2.3% sales increase in its fiscal third quarter ended June 30, but lower gross margins cause its net income to slip to $16.3 million from a year-earlier $17.2 million, Beacon announced today.
"Our third quarter results fell short of our expectations as market conditions did not improve to the extent anticipated and this continued to put unusual pressure on our gross margin," chairman and CEO Robert Buck said in a statement. "However, our total sales increased as we were active with our acquisition program and our non-residential roofing and complementary product sales were up sharply. We also reduced our existing market operating expenses. We believe we are well positioned to leverage a future pick-up in our residential roofing business, and we started to see gains in a few of our regions that had been hit especially hard by the economic downturn."
Sales at branches in operation in 2009's fiscal third quarter declined 0.1% this year. Since June 2009, Peabody, Mass.-based Beacon has acquired companies in Baton Rouge, La.;Orlando, Fla.;central Florida;New Mexico; and Tennessee. It also bought two Canadian companies after the fiscal third quarter ended (story). It now operates 179 branches in 37 states in the United States and three provinces in Canada.
Beacon likes to measure its results by adjusted EBITDA--earnings before interest, taxes, depreciation and amortization as well as before stock-based compensation. By that count, adjusted EBITDA shrank 9.7% to $38.2 million.
Beacon ranks third on the ProSales 100 list of America's biggest LBM operations, with sales in calendar year 2009 of $1.73 billion, all of it to pros.