HERNDON, VA — Beacon Roofing Supply, Inc. announced results for its fourth quarter and fiscal year ended Sept. 30, 2018.
Paul Isabella, the company's President and Chief Executive Officer, stated: “Despite significant weather impacted top-line challenges, we are encouraged by our fourth quarter and Fiscal 2018 progress. Our acquisition of Allied Building Products propelled Beacon to record net sales and Adjusted EBITDA in 2018, and our combined footprint now reaches all 50 U.S. states and six Canadian provinces. Fiscal 2018 operating cash flow was our best year on record, exceeding 2017 by $224 million and more than four times greater than any other year in our history. Gross margins in the fourth quarter expanded by 40 bps to 25.4 percent vs. the prior year and price-cost performance was positive again this quarter. Synergies from the Allied acquisition are exceeding expectations. We will build upon these successes in 2019 by leveraging our 2,000 person salesforce and vast network of over 500 branches to drive top-line growth, supported by the ongoing expansion of our robust digital platform. By optimizing our service network and enabling our salesforce to better meet our customers’ needs, we are well positioned to help customers save time, manage their work more efficiently and enhance their businesses. The fundamentals of our industry remain unchanged, with demand heavily influenced by high repair and remodel content. I am confident and excited about Beacon’s future in 2019 and beyond.”
Fourth Quarter
Total sales increased 50.1 percent to a fourth quarter record of $1.94 billion, up from $1.29 billion in 2017. Residential roofing product sales increased 17.8 percent, non-residential roofing product sales increased 33.8 percent and complementary product sales increased 170.6 percent over the prior year. Existing markets sales, excluding acquisitions, decreased 5.6 percent for the quarter primarily due to weather related events. The fourth quarter of fiscal years 2018 and 2017 each had 63 business days.
Net income attributable to common shareholders for the fourth quarter was $42.3 million, compared to $45.1 million in 2017. Fourth quarter EPS was $0.54, compared to $0.73 in 2017. Adjusted Net Income (Loss), after removing the impact of acquisition related costs and the non-recurring effects of tax reform, was $84.1 million, compared to $65.8 million in 2017. Adjusted EPS was $1.07, compared to $1.06 in 2017. (See included financial tables for a reconciliation of “Adjusted” financial measures to the most directly comparable GAAP financial measures). Fourth quarter results were positively impacted by price gains across all product lines and improved gross margin performance. Fourth quarter results were negatively impacted by existing market sales declines, higher operating costs, and an increase in interest expense and preferred dividend payments that were both primarily related to the acquisition of Allied.
Fiscal Year
Total sales increased 46.6 percent to an annual record of $6.42 billion, up from $4.38 billion in 2017. Residential roofing product sales increased 17.6 percent, non-residential roofing product sales increased 28.5 percent and complementary product sales increased 174.3 percent over the prior year. Existing markets sales, excluding acquisitions, increased 0.5 percent year to date. Fiscal years 2018 and 2017 each had 252 business days.
Net income attributable to common shareholders for the full-year was $80.6 million, compared to $100.9 million in 2017. 2018 EPS was $1.05, compared to $1.64 in 2017. Adjusted Net Income (Loss), after removing the impact of acquisition related costs and the net benefit from one-time tax items, was $206.7 million, compared to $164.5 million in 2017. 2018 Adjusted EPS was $2.70, compared to $2.68 in 2017 (See included financial tables for a reconciliation of “Adjusted” financial measures to the most directly comparable GAAP financial measures). Fiscal year 2018 results were positively impacted by price gains across all product lines, improved gross margin performance, and beneficial tax adjustments. Fiscal year 2018 results were negatively impacted by higher operating expenses, an increase in interest expense and preferred dividend payments that were both primarily related to the acquisition of Allied.
