Beacon Roofing Supply touted today its record total sales of $870.7 million in its fiscal second quarter ended March 31 while underplaying a $9.4 million net loss that was deeper than its $5.7 million net loss in the year-earlier period.
The unprecedented quarterly sales “has us positioned for a strong second half of 2017,” President and Chief Executive Officer Paul Isabella said in the Herndon, Va.-based company’s earnings announcement. “Most notable is our existing market same day sales growth of 2.4%, which is particularly even more impressive considering the 26% mild weather aided growth we saw in Q2 of 2016.”
The sales mix changed from last year. While residential roofing product sales increased 11.8%, sales of non-residential products fell 9.4% while complementary sales climbed 17.6%. Beacon said that decline in non-residential products hurt total sales, as did the cut in gross margins to 23.5% in the latest quarter from 23.8% in the January-March 2016 period. In addition, operating expense rose to $207.5 million from $191.9 million.
Those changes caused Beacon to swing to an operating loss of $3.1 million from a $3.9 million operating profit in 2016. Interest expense was roughly $800,000 lighter, at $12.3 million.
Beacon has been one of the most acquisitive companies in LBM in recent years, so it also reported its numbers in terms of net income after adjusting for non-recurring costs related to major acquisitions. By that measure, the company’s net loss totaled $2.6 million in the latest quarter, swinging from a year-earlier profit of $1.7 million.
“We will continue to pursue organic and acquisition growth within this category, as shown by our May 1 acquisition of Lowry’s, a market leader in waterproofing in the western United States,” Isabella said. “Our second-quarter gross margins also remained above the most recent three-year reported average for Q2, and we are confident in sequential improvements during the upcoming quarters. We also expect our non-residential business to rebound in the second half with anticipated stronger demand and more favorable year-over-year comparisons.”
Beacon ranks fourth on the 2016 ProSales 100. It now has 384 branches operating in 48 U.S. states and six Canadian provinces.
