Despite higher sales, Beacon Roofing Supply posts 2Q loss today reported a net loss of $161,000 for its second quarter ending March 31 compared to year-ago quarterly income of $3.1 million.
The Peabody, Mass.-based roofing products distributor blamed the poor quarterly showing on reduced sales due to bad weather during the winter and lower commercial roofing activity.
While income was down, total sales for the quarter rose 5.3% to $416.3 million in 2013 from $395.2 million in 2012. The company said existing market sales, which exclude branches acquired after the beginning of last year's second quarter, declined 5.1%. In existing markets, residential and non-residential roofing product sales decreased 1.4% and 11.2%, respectively, while complementary product sales decreased 3.2%.
"The second quarter of fiscal 2013 was challenging for us as we experienced harsh weather conditions in many of our markets and we were up against a very strong second quarter last year when our existing market sales were up 28%,” said president and CEO Paul Isabella in a statement.
The company’s total sales received a positive boost from several acquisitions last year, including the August purchase of portions of Contractors Roofing & Supply in St. Louis as well as the acquisitions of Structural Materials, in Santa Ana, Calif., in July, and Cassady Pierce in Pittsburgh in June.
“During the first half, we took advantage of our financial capacity and flexibility to purchase key products ahead of announced industry-wide price increases,” Isabella said. “We believe we are well positioned for a successful back half of fiscal 2013 and expect to experience a business rebound following the tough winter and early spring conditions."
Toward the end of 2012, Beacon acquired some assets of Ford Wholesale of San Jose, Calif., and five locations of Construction Materials Supply in Northern California. In November, the company also purchased the stock of Braddock, Pa.-based McClure-Johnson, which has 14 locations in Pennsylvania, West Virginia, Maryland, and Georgia.
The company paid approximately $64.5 million for the three companies with resulting goodwill of approximately $26.4 million. The purchase price allocations for Ford and CMS were not finished by quarter’s end on March 31.
“Our total sales benefited from the positive impact of several acquisitions made since the start of last year and our gross margin continued to improve over the prior year. In addition, the trend of our residential roofing sales was more favorable in the second quarter compared to the first quarter,” Isabella said.
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.