1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies

Beacon Roofing Supply Inc. Reports Operating Results (10-Q)

August 07, 2009 | About:

Beacon Roofing Supply Inc. (NASDAQ:BECN) filed Quarterly Report for the period ended 2009-06-30.

Beacon Roofing Supply Inc. is one of the largest distributors of residential and non-residential roofing materials in the United States and Canada. It also distributes other complementary exterior building products. It operate in several states and three Canadian provinces and is a leading distributor of roofing materials in key metropolitan markets in the Northeast Mid-Atlantic Southeast and Southwest regions of the United States and in Eastern Canada. Beacon Roofing Supply Inc. has a market cap of $735.6 million; its shares were traded at around $16.32 with a P/E ratio of 12.4 and P/S ratio of 0.4.

Highlight of Business Operations:

We did not open or close any branches in this year s or last year s third quarter. We estimate inflation increased this year s sales by 11-13% over last year s third quarter, indicating a drop in volume of 21-23%, mostly in non-residential roofing and complementary product sales. We had 64 business days in both 2009 and 2008. Net sales by geographical region grew or (declined) as follows: Northeast (20.8%); Mid-Atlantic (11.7%); Southeast 4.9%; Southwest 19.7%; Midwest (22.8%); West (30.1%); and Canada (8.4%). These variations were primarily caused by short-term factors such as local economic conditions and storm activity. Our product group sales were as follows:

Our gross profit decreased $12.4 million or 10.3% in 2009, while our gross margin also decreased to 23.3% in 2009 from 23.4% in 2008. The slight margin rate decrease was the result of increased competition for fewer orders, partially offset by a product mix shift to more residential roofing products, which have substantially higher gross margins than the more competitive non-residential market. Gross margins in residential roofing, excluding vendor incentives, which represent our invoiced gross margin, decreased in 2009 compared to 2008, while invoiced gross margins in non-residential roofing and complementary margins were virtually flat to last year. The drop in invoiced gross margins in residential roofing products was partially offset by increased short-term vendor incentive rebates.

Direct sales (products shipped by our vendors directly to our customers), which typically have substantially lower gross margins than our warehouse sales, represented 19.3% and 22.4% of our net sales for 2009 and 2008, respectively. The decrease in the percentage of direct sales was attributable to the lower mix of non-residential roofing product sales. There were no material changes in the direct sales mix of our geographical regions.

In 2009, we expensed a total of $3.0 million for the amortization of intangible assets recorded under purchase accounting compared to $3.7 million in 2008. Our operating expenses as a percentage of net sales decreased to 16.0% in 2009 from 16.2% in 2008 as we were able to control our variable costs in relationship to the lower sales volume.

An income tax expense of $10.8 million was recorded in 2009, an effective tax rate of 38.7%, compared to $12.7 million in 2008, an effective tax rate of 41.0%. The decrease in the effective rate reflects changes in allocations of taxable income and losses among the states in which we are located and other changes in our year-to-date estimates for fiscal 2009, as well as certain discrete items recognized in the third quarter upon t

Read the The complete Report

Rating: 3.7/5 (6 votes)


Please leave your comment:

GuruFocus has detected 6 Warning Signs with Beacon Roofing Supply Inc $BECN.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by

User Generated Screeners

kpmoranManual of ideas
WellrossNCAV micro/nanoRF
MauroTNCAV micro/nano
nghassanPenny Stocks
brucexrog jun 2017
PortfolioPlusMy Oceania Universe
PortfolioPlusMy Universe
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat