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Beacon (BECN) Q3 Earnings, Sales Top, Up Y/Y on Solid Demand
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Beacon Roofing Supply, Inc.’s (BECN - Free Report) shares inched up 0.6% in the after-hours trading session on Aug 5, after reporting impressive third-quarter fiscal 2021 results. Both the top and bottom lines surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. The solid quarterly results were mainly backed by record net sales, gross margin expansion and operational improvement.
Julian Francis, Beacon’s president and CEO said, “In the last two quarters, we have restored financial flexibility to our balance sheet, added seasoned leadership to our executive team and focused our business on our core exterior products – all of which, combined with our expanded ESG initiative, underpin our ability to sustainably generate high quality returns for our stakeholders. I am excited about our progress towards achieving our full potential as we help our customers build more."
Quarter in Detail
Beacon reported adjusted earnings of $1.59 per share, which topped the consensus mark of $1.31 by 21.4% and grew an impressive 71% from the year-ago figure of 93 cents. Higher revenues, margin expansion and aggressive cost-cutting actions aided the bottom line.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Net sales of $1.87 billion surpassed the consensus mark of $1.83 billion by 2.1% and improved 20.8% year over year owing to favorable residential demand, strong pricing execution as well as improving non residential backdrop. Sales increased across all three product categories driven by higher demand, particularly in complementary and non-residential roofing products categories, and successful implementation of price increases.
Sales of residential roofing products (accounting for 52.4% of net sales), non-residential roofing products (26%) and complementary products (21.6%) increased 18%, 16.3% and 35.1%, respectively.
Operating Highlights
Gross margin of 27.6% improved 380 basis points (bps) year over year, courtesy of successful implementation of price increase. Yet, operating expense increased for the quarter, mainly due to higher net sales volume, increased payroll and benefits cost as well as greater incentive compensation.
As a percentage of net sales, SG&A expenses contracted 20 bps to 15.8%. Adjusted EBITDA margin expanded 390 bps year over year, reflecting strong demand and implementation of cost-control strategies.
Cash Position
At fiscal third quarter-end, Beacon had cash and cash equivalents of $188.9 million, significantly down from $624.6 million at fiscal 2020-end. Long-term debt — net of current portion — was $1.62 billion, lower than the fiscal 2020-end figure of $2.49 billion.
Cash used in operating activities was $20.4 million for the first nine months of fiscal 2021 versus $2504 million cash provided by operations in the comparable year-ago period.
Fastenal Company (FAST - Free Report) — which currently carries a Zacks Rank #3 (Hold) — recently reported second-quarter 2021 results. Although the top and bottom lines topped the respective Zacks Consensus Estimate, net sales declined and earnings remained on par with the year-ago figure.
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Beacon (BECN) Q3 Earnings, Sales Top, Up Y/Y on Solid Demand
Beacon Roofing Supply, Inc.’s (BECN - Free Report) shares inched up 0.6% in the after-hours trading session on Aug 5, after reporting impressive third-quarter fiscal 2021 results. Both the top and bottom lines surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. The solid quarterly results were mainly backed by record net sales, gross margin expansion and operational improvement.
Julian Francis, Beacon’s president and CEO said, “In the last two quarters, we have restored financial flexibility to our balance sheet, added seasoned leadership to our executive team and focused our business on our core exterior products – all of which, combined with our expanded ESG initiative, underpin our ability to sustainably generate high quality returns for our stakeholders. I am excited about our progress towards achieving our full potential as we help our customers build more."
Quarter in Detail
Beacon reported adjusted earnings of $1.59 per share, which topped the consensus mark of $1.31 by 21.4% and grew an impressive 71% from the year-ago figure of 93 cents. Higher revenues, margin expansion and aggressive cost-cutting actions aided the bottom line.
Beacon Roofing Supply, Inc. Price, Consensus and EPS Surprise
Beacon Roofing Supply, Inc. price-consensus-eps-surprise-chart | Beacon Roofing Supply, Inc. Quote
Net sales of $1.87 billion surpassed the consensus mark of $1.83 billion by 2.1% and improved 20.8% year over year owing to favorable residential demand, strong pricing execution as well as improving non residential backdrop. Sales increased across all three product categories driven by higher demand, particularly in complementary and non-residential roofing products categories, and successful implementation of price increases.
Sales of residential roofing products (accounting for 52.4% of net sales), non-residential roofing products (26%) and complementary products (21.6%) increased 18%, 16.3% and 35.1%, respectively.
Operating Highlights
Gross margin of 27.6% improved 380 basis points (bps) year over year, courtesy of successful implementation of price increase. Yet, operating expense increased for the quarter, mainly due to higher net sales volume, increased payroll and benefits cost as well as greater incentive compensation.
As a percentage of net sales, SG&A expenses contracted 20 bps to 15.8%. Adjusted EBITDA margin expanded 390 bps year over year, reflecting strong demand and implementation of cost-control strategies.
Cash Position
At fiscal third quarter-end, Beacon had cash and cash equivalents of $188.9 million, significantly down from $624.6 million at fiscal 2020-end. Long-term debt — net of current portion — was $1.62 billion, lower than the fiscal 2020-end figure of $2.49 billion.
Cash used in operating activities was $20.4 million for the first nine months of fiscal 2021 versus $2504 million cash provided by operations in the comparable year-ago period.
Zacks Rank & Peer Release
Beacon Roofing — which shares space with Builders FirstSource, Inc. (BLDR - Free Report) and GMS Inc. (GMS - Free Report) in the Zacks Building Products – Retail industry — currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fastenal Company (FAST - Free Report) — which currently carries a Zacks Rank #3 (Hold) — recently reported second-quarter 2021 results. Although the top and bottom lines topped the respective Zacks Consensus Estimate, net sales declined and earnings remained on par with the year-ago figure.