Builders FirstSource, Inc. (Nasdaq: BLDR)
today reported its results for the second quarter ending June 30,
2019.
“During the second quarter, we continued to expand our sales of
value-added products and solutions to our customers and delivered
solid results for our shareholders. We generated above market
growth, expanded margins and progressed on the execution of our
strategic plan. Our operational excellence initiatives are on
track, continuing to gain momentum and are delivering results as
planned. I am also pleased with our strong cash flow and working
capital management, which reduced our ratio of net financial debt
to Adjusted EBITDA to 2.7x,” said CEO Chad Crow.
“Our second quarter results included an estimated sales volume
increase of 2.4 percent led once more by growth in our value-added
product categories. Although deflation in commodity prices
decreased total net sales, our team generated a strong gross margin
of 27.2 percent and drove Adjusted EBTIDA higher by 4.7 percent,”
added CFO Peter Jackson.
Second Quarter 2019 Highlights:
- Net sales for the quarter were lower by 8.9 percent -
Commodity deflation decreased sales by 11.3 percent - Sales
volume grew by an estimated 2.4 percent, led by above market
performance in the single-family customer segment - Driven by
5.0 percent volume growth in our value-added product
categories
- Gross margin dollars and percent increased by 4.2 percent and
350 basis points, respectively
- Adjusted EBITDA margin increased by 90 basis points
- Adjusted Net Income increased by 18 percent
The Company has provided supplemental non-GAAP financial
information for the consolidated company that is adjusted to
exclude one-time integration, one-time refinancing, and other costs
(“Adjusted”). As the information included herein includes non-GAAP
financial information, please refer to the accompanying financial
schedules for non-GAAP reconciliations to their GAAP
equivalents.
Second Quarter 2019 Compared to Second Quarter 2018:
Net Sales
- Net sales for the second quarter ending June 30, 2019 were $1.9
billion, an 8.9 percent decrease compared to a year ago, driven by
the impact of deflation in the price of lumber and lumber sheet
goods of approximately 11.3 percent.
- Lumber and lumber sheet goods sales declined 25.8 percent,
attributable to the deflation in commodity prices as compared to
the same period a year ago. Our remaining product categories,
excluding our gypsum, roofing and insulation, achieved increased
sales due to higher sales volume.
- Sales volume, excluding commodity deflation, grew by an overall
2.4 percent. Single-family segment sales volume grew by 3.8 percent
versus a decline of 6.2 percent in actual U.S. Census Bureau
single-family starts during the period. Multi-family gained 3.2
percent while repair and remodel / other end market partially
offset the growth with a 2.2 percent decline. Sales volume in our
value-added product categories grew by 5.0 percent, including 5.9
percent in our Manufactured Products and 4.1 percent in Windows,
Doors and Millwork category.
Gross Margin
- Gross margin was $517.2 million, an increase of $20.8 million
over the prior year. Our gross margin percentage increased to 27.2
percent from 23.7 percent in the prior year period, a 350 basis
point increase. The margin percentage increase was attributable to
an improved product mix, the decline in the cost of commodities
relative to our customer pricing commitments and our team’s
continued focus on pricing discipline. Particularly strong ongoing
growth in the value-added product categories contributed to the mix
improvement.
Selling, General and Administrative Expenses
- SG&A in the second quarter of 2019 was $401.5 million, an
increase of approximately $9.7 million, the largest component of
which was increased variable compensation related to higher gross
margins. As a percentage of sales, SG&A increased by 240 basis
points to 21.1 percent, primarily due to increased variable
compensation, related to our improved gross margins, as well as
lumber and panel deflation.
Interest Expense
- Interest expense increased by $0.4 million to $29.4 million
compared to the same period last year. The year over year increase
is largely due to charges related to debt financing transactions
executed in the second quarter. Adjusting for $4.3 million in
one-time charges, interest expense declined by $3.9 million due to
lower outstanding debt balances as compared to the prior year
quarter, offset somewhat by the effect of higher interest
rates.
Income Tax Expense
- Income tax expense in the second quarter of 2019 was $19.7
million, or an effective tax rate of 22.8 percent. In the same
period of the prior year, income tax expense was $19.0 million, or
an effective tax rate of 25.1 percent.
Adjusted Net Income
- Net income was $66.6 million, or $0.57 per diluted share,
compared to $56.6 million, or $0.49 per diluted share, in the same
period a year ago.
- Adjusted net income was $74.1 million, or $0.63 per diluted
share, compared to $62.6 million, or $0.54 per diluted share, in
the second quarter of 2018. The increase of $11.5 million, or 18.4
percent, was primarily driven by the improvement in gross margin
and lower adjusted interest expense.
Adjusted EBITDA
- Adjusted EBITDA grew $6.5 million to $145.6 million, an
increase of 4.7 percent. The increase was driven by the factors
described above. As a result, Adjusted EBITDA improved to 7.6
percent of sales in the second quarter from 6.7 percent in the same
period a year ago.
Year to Date June 30, 2019 Financial Information:
Net Sales
- Net sales year to date were $3.5 billion, a 6.7 percent
decrease compared to the first half of 2018, largely driven by the
impact of commodity price deflation of 10.4 percent while one less
selling day decreased sales by 0.7 percent. Sales volume growth of
4.4 percent was driven primarily by growth in our value-added
product categories.
Gross Margin
- Gross margin increased $51.8 million to $959.1 million. Our
gross margin percentage increased to 27.1 percent in the first half
of 2019 from 23.9 percent in the first six months of 2018, a 320
basis point increase. The increase was primarily attributable to an
improved product mix, the decline in the cost of commodities
relative to our customer pricing commitments and continued pricing
discipline. In addition, sales growth in our higher margin,
value-added product categories contributed to increased gross
profit dollars compared to the prior year.
Adjusted Net Income
- GAAP net income was $102.3 million, or $0.88 per diluted share,
compared to $79.8 million, or $0.68 per diluted share, in the first
half of 2018, an increase of $0.20 per diluted share, or 29.4
percent.
- Adjusted net income was $113.9 million, or $0.98 per diluted
share, compared to $90.2 million, or $0.77 per diluted share, in
the first-half of 2018, an increase of $0.21 per diluted
share. The year over year increase of $23.7 million, or 26.3
percent, was primarily driven by the improvement in gross margin
and lower adjusted interest expense. The gross margin increase was
attributable to an improved product mix and the decline in the cost
of commodities relative to our customer pricing commitments versus
the prior year period.
Adjusted EBITDA
- Adjusted EBITDA for the first half of 2019 grew $24.7 million
to $246.5 million, or 7.0 percent of sales, compared to $221.8
million, or 5.9 percent of sales, for the first half of 2018, an
increase of 11.1 percent. The year over year improvement was due to
the factors described above.
Capital Structure, Leverage, and Liquidity Information:
- Adjusted EBITDA, on a trailing twelve-month basis, was $526.3
million and net debt was $1,438.7 million as of June 30, 2019. Our
leverage ratio decreased from 3.0x net debt to Adjusted EBITDA at
March 31, 2019 to 2.7x as of June 30, 2019, a reduction of 0.3x and
well within the Company’s leverage target ratio of between 2.5x and
3.5x.
- Net cash provided from operations and investing was $138.0
million due primarily to the impact of commodity deflation on the
value of working capital in the first six months compared to the
prior year period. We now expect to generate between $180 – 210
million in cash from operations and investing for the full year,
after funding our capital expenditures and the acquisition of three
manufacturing locations completed in the third quarter as described
below.
- Liquidity as of June 30, 2019 was $755.3 million, consisting of
net borrowing availability under the revolving credit facility and
cash on hand.
- In May 2019, we issued $400 million of 6.75% Senior Secured
Notes (“2027 Notes”) due in 2027. The net proceeds of this issuance
were used to repay $300 million of the funds drawn under our
existing term loan credit facility and to repurchase approximately
$97 million of our outstanding 2024 Notes and pay related
transaction fees. In July of 2019, we issued an additional $75
million in Notes of the same series to repurchase a portion of our
2024 Notes and pay related transaction fees and expenses.
- In July 2019, we acquired certain assets and operations of Sun
State Components for approximately $43 million in cash. The assets
include three truss manufacturing facilities located in Arizona and
Nevada expanding our presence to 40 states and 77 of the top 100
U.S. metropolitan statistical areas.
Please refer to the accompanying financial schedules for more
information.
Outlook
“Housing market fundamentals and demand for housing remain
supportive as we enter the prime selling season. As homebuilders
have continued their pivot toward home formats and price points
that are increasingly in demand by homebuyers, we have seen
stabilizing sentiment and activity. In this environment, we are
more confident than ever that our network scale, market diversity
and value-added product leadership provide us with competitive
advantages and a long runway of growth opportunities. Against the
backdrop of a stabilizing market and an ongoing commodity deflation
headwinds, I remain confident that our consistent strategic
investments and execution by our team will continue to deliver
strong results and advancement of our operational excellence
programs. As always, I would like to thank our fifteen thousand
team members for their hard work and excellent service to our
customers as we build a more efficient and agile organization in
the quarters and years ahead,” concluded Mr. Crow.
Conference CallBuilders FirstSource will host a conference call
Friday, August 2, 2019 at 9:00 a.m. Central Time (CT) and will
simultaneously broadcast it live on the Internet. The earnings
release presentation will be posted at www.bldr.com under the
“investors” section after the market closes on Thursday, August
1st. To participate in the teleconference, please dial into
the call a few minutes before the start time: 888-254-3590 (U.S.
and Canada) and 323-794-2093 (international), Conference ID:
6282240. A replay of the call will be available at 1:00 p.m.
Central Time through August 17th. To access
the replay, please dial 888-203-1112 (U.S. and Canada) and
719-457-0820 (international) and refer to pass code 6282240. The
live webcast and archived replay can also be accessed on the
Company's website at www.bldr.com under the “Investors”
section. The online archive of the webcast will be available
for approximately 90 days.
About Builders FirstSourceHeadquartered in Dallas, Texas,
Builders FirstSource is the largest U.S supplier of building
products, prefabricated components, and value-added services to the
professional market segment for new residential construction and
repair and remodeling. We provide customers an integrated
homebuilding solution, offering manufacturing, supply, delivery and
installation of a full range of structural and related building
products. We operate in 40 states with approximately 400
locations and have a market presence in 77 of the top 100
Metropolitan Statistical Areas, providing geographic diversity and
balanced end market exposure. We service customers from
strategically located distribution and manufacturing facilities
(certain of which are co-located) that produce value-added products
such as roof and floor trusses, wall panels, stairs, vinyl windows,
custom millwork and pre-hung doors. Builders FirstSource also
distributes dimensional lumber and lumber sheet goods, millwork,
windows, interior and exterior doors, and other building products.
For more information about Builders FirstSource, visit the
Company’s website at www.bldr.com.
Cautionary NoticeStatements in this news release
and the schedules hereto that are not purely historical facts or
that necessarily depend upon future events, including statements
about expected market share gains, forecasted financial performance
or other statements about anticipations, beliefs, expectations,
hopes, intentions or strategies for the future, may be
forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended. Readers
are cautioned not to place undue reliance on forward-looking
statements. In addition, oral statements made by our
directors, officers and employees to the investor and analyst
communities, media representatives and others, depending upon their
nature, may also constitute forward-looking statements. As with the
forward-looking statements included in this release, these
forward-looking statements are by nature inherently uncertain, and
actual results may differ materially as a result of many
factors. All forward-looking statements are based upon
information available to Builders FirstSource, Inc. on the date
this release was submitted. Builders FirstSource, Inc.
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Any forward-looking statements involve
risks and uncertainties that could cause actual events or results
to differ materially from the events or results described in the
forward-looking statements, including risks or uncertainties
related to the Company’s growth strategies, including gaining
market share, or the Company’s revenues and operating results being
highly dependent on, among other things, the homebuilding industry,
lumber prices and the economy. Builders FirstSource, Inc. may
not succeed in addressing these and other risks. Further
information regarding factors that could affect our financial and
other results can be found in the risk factors section of
Builders FirstSource, Inc.’s most recent annual report on
Form 10-K filed with the Securities and Exchange
Commission. Consequently, all forward-looking statements in
this release are qualified by the factors, risks and uncertainties
contained therein.
Contact:Binit SanghviVP Investor
Relations
Builders FirstSource, Inc.(214)
765-3804
Financial Schedules to
Follow
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIESCONSOLIDATED
STATEMENT OF OPERATIONS AND COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
(Unaudited) |
|
|
(In thousands, except per share amounts) |
Sales |
|
$ |
1,904,523 |
|
|
$ |
2,089,888 |
|
|
$ |
3,535,823 |
|
|
$ |
3,790,324 |
Cost of sales |
|
|
1,387,367 |
|
|
|
1,593,560 |
|
|
|
2,576,692 |
|
|
|
2,882,944 |
Gross margin |
|
|
517,156 |
|
|
|
496,328 |
|
|
|
959,131 |
|
|
|
907,380 |
Selling, general and
administrative expenses |
|
|
401,511 |
|
|
|
391,769 |
|
|
|
771,595 |
|
|
|
750,677 |
Income from operations |
|
|
115,645 |
|
|
|
104,559 |
|
|
|
187,536 |
|
|
|
156,703 |
Interest expense, net |
|
|
29,382 |
|
|
|
28,957 |
|
|
|
54,283 |
|
|
|
55,699 |
Income before income taxes |
|
|
86,263 |
|
|
|
75,602 |
|
|
|
133,253 |
|
|
|
101,004 |
Income tax expense |
|
|
19,659 |
|
|
|
18,980 |
|
|
|
30,941 |
|
|
|
21,162 |
Net income |
|
$ |
66,604 |
|
|
$ |
56,622 |
|
|
$ |
102,312 |
|
|
$ |
79,842 |
Comprehensive income |
|
$ |
66,604 |
|
|
$ |
56,622 |
|
|
$ |
102,312 |
|
|
$ |
79,842 |
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.58 |
|
|
$ |
0.49 |
|
|
$ |
0.89 |
|
|
$ |
0.70 |
Diluted |
|
$ |
0.57 |
|
|
$ |
0.49 |
|
|
$ |
0.88 |
|
|
$ |
0.68 |
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
115,757 |
|
|
|
114,636 |
|
|
|
115,592 |
|
|
|
114,365 |
Diluted |
|
|
116,919 |
|
|
|
116,693 |
|
|
|
116,726 |
|
|
|
116,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEET
|
|
June 30, |
|
|
December 31, |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
(Unaudited) |
|
|
(In thousands, except per share amounts) |
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,552 |
|
|
$ |
10,127 |
Accounts receivable, less allowances of $12,772 and $13,054 at June
30, 2019 and December 31, 2018, respectively |
|
|
715,405 |
|
|
|
654,170 |
Other receivables |
|
|
54,257 |
|
|
|
68,637 |
Inventories, net |
|
|
617,527 |
|
|
|
596,896 |
Other current assets |
|
|
36,217 |
|
|
|
43,921 |
Total current assets |
|
|
1,433,958 |
|
|
|
1,373,751 |
Property, plant and equipment,
net |
|
|
675,310 |
|
|
|
670,075 |
Operating lease right-of-use
assets, net |
|
|
273,971 |
|
|
|
- |
Goodwill |
|
|
740,411 |
|
|
|
740,411 |
Intangible assets, net |
|
|
95,417 |
|
|
|
103,154 |
Deferred income taxes |
|
|
7,343 |
|
|
|
22,766 |
Other assets, net |
|
|
23,561 |
|
|
|
22,152 |
Total assets |
|
$ |
3,249,971 |
|
|
$ |
2,932,309 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
516,897 |
|
|
$ |
423,168 |
Accrued liabilities |
|
|
258,096 |
|
|
|
292,526 |
Current portion of operating lease liabilities |
|
|
60,576 |
|
|
|
- |
Current maturities of long-term debt |
|
|
12,650 |
|
|
|
15,565 |
Total current liabilities |
|
|
848,219 |
|
|
|
731,259 |
Noncurrent portion of operating
lease liabilities |
|
|
218,001 |
|
|
|
- |
Long-term debt, net of current
maturities, debt discount, and debt issuance costs |
|
|
1,420,462 |
|
|
|
1,545,729 |
Deferred income taxes |
|
|
5,967 |
|
|
|
- |
Other long-term liabilities |
|
|
53,191 |
|
|
|
58,983 |
Total liabilities |
|
|
2,545,840 |
|
|
|
2,335,971 |
Commitments and
contingencies |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 10,000 shares authorized; zero
shares issued and outstanding |
|
|
- |
|
|
|
- |
Common stock, $0.01 par value, 200,000 shares authorized; 115,880
and 115,078 shares issued and outstanding at June 30, 2019 and
December 31, 2018, respectively |
|
|
1,159 |
|
|
|
1,151 |
Additional paid-in capital |
|
|
565,694 |
|
|
|
560,221 |
Retained earnings |
|
|
137,278 |
|
|
|
34,966 |
Total stockholders' equity |
|
|
704,131 |
|
|
|
596,338 |
Total liabilities and stockholders' equity |
|
$ |
3,249,971 |
|
|
$ |
2,932,309 |
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIESCONSOLIDATED
STATEMENT OF CASH FLOWS
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
(Unaudited)(In thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
102,312 |
|
|
$ |
79,842 |
|
Adjustments to reconcile net
income to net cash from operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
47,390 |
|
|
|
47,587 |
|
Amortization of debt issuance costs and debt discount |
|
|
2,132 |
|
|
|
2,308 |
|
Loss on extinguishment of debt, net |
|
|
1,498 |
|
|
|
- |
|
Deferred income taxes |
|
|
21,390 |
|
|
|
18,863 |
|
Stock compensation expense |
|
|
6,038 |
|
|
|
6,428 |
|
Net gain on sale of assets and asset impairments |
|
|
(1,023 |
) |
|
|
(326 |
) |
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Receivables |
|
|
(47,113 |
) |
|
|
(177,765 |
) |
Inventories |
|
|
(20,631 |
) |
|
|
(189,925 |
) |
Other current assets |
|
|
7,271 |
|
|
|
(5,693 |
) |
Other assets and liabilities |
|
|
1,057 |
|
|
|
2,498 |
|
Accounts payable |
|
|
90,050 |
|
|
|
67,129 |
|
Accrued liabilities |
|
|
(31,586 |
) |
|
|
(19,915 |
) |
Net cash provided by (used in) operating
activities |
|
|
178,785 |
|
|
|
(168,969 |
) |
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(45,392 |
) |
|
|
(49,948 |
) |
Proceeds from sale of property, plant and equipment |
|
|
4,620 |
|
|
|
1,075 |
|
Net cash used in investing activities |
|
|
(40,772 |
) |
|
|
(48,873 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility |
|
|
594,000 |
|
|
|
904,000 |
|
Repayments under revolving credit facility |
|
|
(700,000 |
) |
|
|
(721,000 |
) |
Proceeds from issuance of notes |
|
|
400,000 |
|
|
|
- |
|
Repayments of long-term debt and other loans |
|
|
(423,743 |
) |
|
|
(6,852 |
) |
Payments of loan costs |
|
|
(7,278 |
) |
|
|
- |
|
Exercise of stock options |
|
|
1,883 |
|
|
|
2,212 |
|
Repurchase of common stock |
|
|
(2,450 |
) |
|
|
(4,855 |
) |
Net cash provided by (used in) financing
activities |
|
|
(137,588 |
) |
|
|
173,505 |
|
Net change in cash and cash
equivalents |
|
|
425 |
|
|
|
(44,337 |
) |
Cash and cash equivalents at
beginning of the period |
|
|
10,127 |
|
|
|
57,533 |
|
Cash and cash equivalents at end
of the period |
|
$ |
10,552 |
|
|
$ |
13,196 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash activities |
Purchases of property, plant and equipment included in accounts
payable were $4.0 million and $3.7 million for the six months ended
June 30, 2019 and 2018, respectively. The Company purchased
equipment which was financed through finance lease obligations of
$7.0 million and capital lease obligations of $6.8 million in the
six months ended June 30, 2019 and 2018, respectively. |
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Reconciliation of Adjusted Non-GAAP Financial Measures to
their GAAP Equivalents (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The company provided detailed explanations of these non-GAAP
financial measures in its Form 8-K filed with the Securities and
Exchange Commission on August 1, 2019. |
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
Twelve months ended June
30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
(in millions) |
|
(in millions) |
|
|
Reconciliation to
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
GAAP Net Income |
$ |
66.6 |
|
|
$ |
56.6 |
|
|
$ |
102.3 |
|
|
$ |
79.8 |
|
|
$ |
227.7 |
|
Integration related
expenses |
|
3.2 |
|
|
|
6.0 |
|
|
|
8.0 |
|
|
|
10.4 |
|
|
|
16.8 |
|
Debt issuance and refinancing
cost (1) |
|
4.3 |
|
|
|
- |
|
|
|
3.6 |
|
|
|
- |
|
|
|
0.4 |
|
Adjusted Net Income |
|
74.1 |
|
|
|
62.6 |
|
|
|
113.9 |
|
|
|
90.2 |
|
|
|
244.9 |
|
Weighted average diluted
common shares (in millions) |
|
116.9 |
|
|
|
116.7 |
|
|
|
116.7 |
|
|
|
116.7 |
|
|
|
Diluted adjusted net income
per share: |
$ |
0.63 |
|
|
$ |
0.54 |
|
|
$ |
0.98 |
|
|
$ |
0.77 |
|
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
23.8 |
|
|
|
24.8 |
|
|
|
47.4 |
|
|
|
47.6 |
|
|
|
97.7 |
|
Interest expense, net |
|
25.1 |
|
|
|
29.0 |
|
|
|
50.7 |
|
|
|
55.7 |
|
|
|
106.4 |
|
Income tax (benefit) expense |
|
19.7 |
|
|
|
19.0 |
|
|
|
31.0 |
|
|
|
21.2 |
|
|
|
65.4 |
|
Stock compensation expense |
|
3.4 |
|
|
|
3.5 |
|
|
|
6.1 |
|
|
|
6.4 |
|
|
|
14.1 |
|
(Gain)/loss on sale and asset impairments |
|
(0.6 |
) |
|
|
(0.1 |
) |
|
|
(1.0 |
) |
|
|
0.1 |
|
|
|
(2.1 |
) |
Other management-identified adjustments (2) |
|
0.1 |
|
|
|
0.3 |
|
|
|
(1.6 |
) |
|
|
0.6 |
|
|
|
(0.1 |
) |
Adjusted EBITDA |
$ |
145.6 |
|
|
$ |
139.1 |
|
|
$ |
246.5 |
|
|
$ |
221.8 |
|
|
$ |
526.3 |
|
Adjusted EBITDA Margin |
|
7.6 |
% |
|
|
6.7 |
% |
|
|
7.0 |
% |
|
|
5.9 |
% |
|
|
7.0 |
% |
|
|
|
|
|
|
|
|
|
(1) Costs
associated with issuing and extinguishing long term debt in 2019
and 2018. |
|
|
|
|
|
|
|
(2) Primarily relates to
severance and one time cost. |
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES |
Financial Data |
(adjusted and unaudited) |
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
(in millions except per share amounts) |
Net sales |
|
1,904.5 |
|
|
|
2,089.9 |
|
|
|
3,535.8 |
|
|
|
3,790.3 |
|
Gross margin |
|
517.2 |
|
|
|
496.3 |
|
|
|
959.1 |
|
|
|
907.4 |
|
Gross margin % |
|
27.2 |
% |
|
|
23.7 |
% |
|
|
27.1 |
% |
|
|
23.9 |
% |
Adjusted SG&A/Other (excluding depreciation and amortization)
as a % of sales (1) |
|
19.5 |
% |
|
|
17.1 |
% |
|
|
20.2 |
% |
|
|
18.1 |
% |
Adjusted EBITDA |
|
145.6 |
|
|
|
139.1 |
|
|
|
246.5 |
|
|
|
221.8 |
|
Adjusted EBITDA margin % |
|
7.6 |
% |
|
|
6.7 |
% |
|
|
7.0 |
% |
|
|
5.9 |
% |
Depreciation and
amortization |
|
(23.8 |
) |
|
|
(24.8 |
) |
|
|
(47.4 |
) |
|
|
(47.6 |
) |
Interest expense, net of debt
issuance cost and refinancing |
|
(25.1 |
) |
|
|
(29.0 |
) |
|
|
(50.7 |
) |
|
|
(55.7 |
) |
Income tax expense |
|
(19.7 |
) |
|
|
(19.0 |
) |
|
|
(31.0 |
) |
|
|
(21.2 |
) |
Other adjustments |
|
(2.9 |
) |
|
|
(3.7 |
) |
|
|
(3.5 |
) |
|
|
(7.1 |
) |
Adjusted Net Income |
$ |
74.1 |
|
|
$ |
62.6 |
|
|
$ |
113.9 |
|
|
$ |
90.2 |
|
Basic adjusted net income per
share: |
$ |
0.64 |
|
|
$ |
0.55 |
|
|
$ |
0.99 |
|
|
$ |
0.79 |
|
Diluted adjusted net income
per share: |
$ |
0.63 |
|
|
$ |
0.54 |
|
|
$ |
0.98 |
|
|
$ |
0.77 |
|
Weighted average common shares
(in millions) |
|
|
|
|
|
|
|
Basic |
|
115.8 |
|
|
|
114.6 |
|
|
|
115.6 |
|
|
|
114.4 |
|
Diluted |
|
116.9 |
|
|
|
116.7 |
|
|
|
116.7 |
|
|
|
116.7 |
|
|
|
|
|
|
|
|
|
Note: The company provided detailed explanations of these non-GAAP
financial measures in its Form 8-K filed with the Securities and
Exchange Commission on August 1, 2019. |
|
|
|
|
|
|
|
|
(1) Adjusted SG&A and other as a percentage of sales is defined
as GAAP SG&A less depreciation and amortization, stock comp,
acquisition, integration and other expenses. GAAP SG&A in
Q2-19 of $401.5M less $23.8M depreciation and amortization, less
$3.2M of integration expenses, less $3.4M of stock comp, plus
$0.5 in gains on assets, impairments, and other. GAAP
SG&A in H1-19 of $771.6M less $47.6M depreciation and
amortization, less $8.0M of integration expenses, less $6.1M
of stock comp, plus $2.6 in gains on assets, impairments, and
other. |
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES |
Sales by Product
Category |
(adjusted and unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
Net Sales |
|
% of Net Sales |
|
Net Sales |
|
% of Net Sales |
%
Change |
|
Net Sales |
|
% of Net Sales |
|
Net Sales |
|
% of Net Sales |
%
Change |
Lumber & Lumber Sheet Goods |
$ |
601.5 |
|
31.6 |
% |
|
$ |
811.2 |
|
38.8 |
% |
-25.8 |
% |
|
$ |
1,119.2 |
|
31.7 |
% |
|
$ |
1,455.0 |
|
38.4 |
% |
-23.1 |
% |
Manufactured Products |
|
374.3 |
|
19.7 |
% |
|
|
370.9 |
|
17.7 |
% |
0.9 |
% |
|
|
691.7 |
|
19.6 |
% |
|
|
665.1 |
|
17.5 |
% |
4.0 |
% |
Windows, Doors &
Millwork |
|
391.0 |
|
20.5 |
% |
|
|
375.5 |
|
18.0 |
% |
4.1 |
% |
|
|
744.4 |
|
21.1 |
% |
|
|
707.7 |
|
18.7 |
% |
5.2 |
% |
Gypsum, Roofing &
Insulation |
|
138.4 |
|
7.3 |
% |
|
|
141.3 |
|
6.8 |
% |
-2.0 |
% |
|
|
259.3 |
|
7.3 |
% |
|
|
254.1 |
|
6.7 |
% |
2.0 |
% |
Siding, Metal & Concrete
Products |
|
191.3 |
|
10.0 |
% |
|
|
189.5 |
|
9.1 |
% |
0.9 |
% |
|
|
341.2 |
|
9.6 |
% |
|
|
331.7 |
|
8.8 |
% |
2.9 |
% |
Other |
|
208.0 |
|
10.9 |
% |
|
|
201.5 |
|
9.6 |
% |
3.2 |
% |
|
|
380.0 |
|
10.7 |
% |
|
|
376.7 |
|
9.9 |
% |
0.9 |
% |
Total adjusted net sales |
$ |
1,904.5 |
|
100.0 |
% |
|
$ |
2,089.9 |
|
100.0 |
% |
-8.9 |
% |
|
$ |
3,535.8 |
|
100.0 |
% |
|
$ |
3,790.3 |
|
100.0 |
% |
-6.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES |
Interest Reconciliation |
(unaudited) |
|
|
|
|
|
Six months ended June 30, |
|
|
2019 |
|
Interest Expense |
|
Net Debt Outstanding |
|
|
|
(in millions) |
2027 Secured Notes @ 6.75% Fixed |
$ |
2.4 |
|
$ |
400.0 |
|
2024 Secured Notes @ 5.625% Fixed |
|
9.0 |
|
|
578.9 |
|
2024 Term Loan @ 5.7% (Floating LIBOR) |
|
5.0 |
|
|
157.1 |
|
Revolving Credit Facility @ 4.4% (Floating LIBOR) |
|
2.5 |
|
|
73.0 |
|
Amortization of deferred loan costs and debt discount |
|
1.0 |
|
|
Finance leases and other finance obligations |
|
5.2 |
|
|
240.3 |
|
Debt issuance and refinancing cost |
|
4.3 |
|
|
Cash |
|
|
|
(10.6 |
) |
Total |
$ |
29.4 |
|
$ |
1,438.7 |
|
|
|
|
|
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