Beacon Roofing Supply Sales Up 6.1% in 3Q

Beacon Roofing Supply, Inc., Peabody, MA, reported sales increased 6.1% to $514.6 million in third quarter 2008 compared with the year-ago period. Organic growth was 5.9%.
 
Residential and non-residential roofing sales increased 12.4% and 7.4%, respectively, while complementary product sales declined 11.3%. Roofing product sales benefited from a rapid rise in prices during the third quarter as well as from strong re-roofing activity in storm-affected regions and continued strength in commercial roofing activity in most markets.
 
Complementary product sales continued to be hampered by the slowdown in new residential construction.
 
Profit for the third quarter was $18.3 million compared with $11.5 million in 2007, an increase of 59%. According to Beacon, the improvement was due mostly to the company's ability to pass through increases in residential shingle prices as they were announced by vendors. However, cost of goods sold did not increase at the same time or rate due to favorable buying programs and the lower-cost inventory on hand before the price increases. In addition, there was an increase of residential roofing products in our product sales mix. These products typically have substantially higher gross margins than non-residential roofing products.
 
Year-to-date, sales increased 5.7% to $1.22 billion in 2008, mostly due to the favorable impact of North Coast Commercial Roofing Systems Inc., acquired on April 1, 2007. The impact from North Coast was partially offset by a decline of 4.7% in existing market sales. The year-to-date existing market sales decline was due primarily to a decline in new residential construction and weaker re-roofing and remodeling activity, partially offset by the positive factors mentioned above for the third quarter sales increase.
 
Year-to-date, profit was $15.4 million compared with $14 million in 2007.
 
Beacon Roofing Supply, Inc. is a distributor of roofing materials and complementary building products operating 176 branches in 35 states in the U.S. and Eastern Canada.