Beacon Roofing Supply, Inc. (BECN) has reported a 53.84 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $47.39 million, or $0.78 a share in the quarter, compared with $30.81 million, or $0.61 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $53.60 million, or $0.88 a share compared with $37.78 million or $0.75 a share, a year ago. Revenue during the quarter surged 49.08 percent to $1,174.37 million from $787.73 million in the previous year period. Gross margin for the quarter expanded 140 basis points over the previous year period to 25.72 percent. Total expenses were 91.84 percent of quarterly revenues, down from 92.49 percent for the same period last year. This has led to an improvement of 65 basis points in operating margin to 8.16 percent.
Operating income for the quarter was $95.88 million, compared with $59.16 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $127.53 million compared with $77.73 million in the prior year period. At the same time, adjusted EBITDA margin improved 99 basis points in the quarter to 10.86 percent from 9.87 percent in the last year period.
Paul Isabella, the Company’s president and chief executive officer, stated: "2016 was a landmark year for Beacon. We capitalized on the momentum of our transformational acquisition of RSG on the first day of the year to close on seven additional acquisitions and deliver record revenue and strong earnings for our shareholders. Gross margins were excellent, and we achieved growth in residential, commercial and complementary products, with residential roofing sales growth leading the way and remaining particularly strong through the end of the year. We are ahead on our attainment of the RSG synergies, and I am pleased that existing market operating expenses as a percentage of revenue decreased this year, demonstrating that our team is making great progress in achieving operating leverage. Our balance sheet has improved steadily, and we remain focused on reaching our goal of a 2.0x debt leverage ratio, while not sacrificing growth opportunities through additional strategic acquisitions."
Operating cash flow improves
Beacon Roofing Supply, Inc. has generated cash of $120.65 million from operating activities during the year, up 10.34 percent or $11.31 million, when compared with the last year. The company has spent $1,042.62 million cash to meet investing activities during the year as against cash outgo of $104.71 million in the last year. It has incurred net capital expenditure of $24.43 million on net basis during the year, up 25.86 percent or $5.02 million from year ago.
Cash flow from financing activities was $906.87 million for the year as against cash outgo of $12.71 million in the last year period.
Cash and cash equivalents stood at $31.39 million as on Sep. 30, 2016, down 31.26 percent or $14.28 million from $45.66 million on Sep. 30, 2015.
Debt increases substantially
Beacon Roofing Supply, Inc. has witnessed an increase in total debt over the last one year. It stood at $1,132.52 million as on Sep. 30, 2016, up 414.49 percent or $912.40 million from $220.13 million on Sep. 30, 2015. Total debt was 36.37 percent of total assets as on Sep. 30, 2016, compared with 14.24 percent on Sep. 30, 2015. Debt to equity ratio was at 0.86 as on Sep. 30, 2016, up from 0.25 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 5.66 for the quarter from 19.40 for the same period last year.
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