Builders FirstSource, Inc. (Nasdaq: BLDR)
today reported its results for the third quarter ending September
30, 2019.
Highlights of the Third Quarter 2019 vs Third Quarter 2018:
- Adjusted EBITDA of $160.3 million or 8.1 percent of net
sales
- Net sales for the quarter were lower by 6.5 percent
- Sales volume per day grew by an estimated 9.4 percent, across
all product categories, led by an 11.2 percent volume increase in
our value-added product categories
- Commodity deflation decreased sales per day by an estimated
17.4 percent
- One additional sales day in the third quarter of 2019 increased
sales by 1.5 percent
- Gross margin dollars and percent increased by 3.5 percent and
260 basis points, respectively
- Net income improved by 6.6 percent
- Net debt to Adjusted EBITDA ratio further decreased to
2.5x
“Our team delivered an impressive performance in the third
quarter, producing above market growth in sales volume driven by
increases across all of our product categories. We continued
to see attractive returns from our strategic investments in
manufacturing capacity, with double-digit volume growth in
value-added products outpacing overall sales volume gains and
elevating margins. In addition to our ongoing organic
expansion in value-added products, we further strengthened our
market position with the acquisition of three truss manufacturing
facilities in Arizona and Nevada, expanding our overall geographic
footprint to 77 of the top 100 U.S. metropolitan statistical areas.
In addition, our operational excellence initiatives are
delivering greater efficiencies and cost savings. Building on
this strong momentum, our team’s disciplined execution delivered
the 13th straight quarter of year-over-year increases in Adjusted
EBITDA, achieving a quarterly record of 8.1 percent of net sales,
since our acquisition of ProBuild,” said CEO Chad Crow.
“Our strong third quarter growth in sales volume and margins
combined with our focus on working capital management generated
another quarter of strong cash flow. We were also pleased to
deploy capital on an accretive acquisition, while at the same time,
further improving our ratio of net financial debt to Adjusted
EBITDA to 2.5x,” added CFO Peter Jackson.
Third Quarter 2019 Compared to Third Quarter 2018:
Net Sales
- Net sales were $2.0 billion, a 6.5 percent decrease compared to
the same period a year ago. Lumber and lumber sheet goods
sales declined due to the deflation in commodity prices as compared
to the same period a year ago. This was partly offset by
increased net sales in all remaining product categories,
attributable to higher sales volume.
- One additional sales day increased net sales by 1.5 percent
compared to the prior year quarter.
- Net sales per day declined by 8.0 percent as commodity
deflation offset growth in estimated sales volume per day of 9.4
percent. Sales volume per day in the single-family end market grew
by an estimated 9.3 percent, repair and remodel / other by 10.7
percent and multi-family by 5.8 percent. Estimated sales volume
also increased in all product categories. The value-added
product categories grew sales volume by 11.2 percent per day,
including 14.5 percent in Manufactured Products and 7.7 percent in
our Windows, Doors and Millwork categories.
Gross Margin
- Gross margin was $541.1 million, an increase of 3.5 percent
over the prior year. Our gross margin percentage increased 260
basis points to 27.3 percent from 24.7 percent in the prior year
period. The margin percentage increase was attributable to the
improved product mix, the impact of commodity cost relative to our
customer pricing commitments, and our focus on pricing discipline.
Outsized growth in the higher margin, value-added product
categories was a key contributor to the mix improvement.
Selling, General and Administrative Expenses
- SG&A as a percentage of sales was 20.8 percent, an increase
of 190 basis points compared to the prior year quarter. This was
mainly a result of the decreased net sales due to commodity
deflation as well as increased variable compensation related to
higher volumes and gross margin.
Interest Expense
- Interest expense decreased by $1.3 million to $27.8 million
compared to the same period last year. Interest expense in the
third quarter of 2019 included $3.1 million in charges related to
debt financing transactions executed in the quarter.
- Excluding these one-time charges, interest expense declined by
$4.4 million largely due to lower outstanding debt balances
partially offset by the effect of higher interest rates.
Income Tax Expense
- Income tax expense was $23.7 million, or an effective tax rate
of 23.3 percent compared to $19.4 million, or an effective tax rate
of 20.9 percent in the prior year.
Adjusted Net Income
- Net income was $78.1 million, or $0.67 per diluted share,
compared to $73.3 million, or $0.63 per diluted share, in the same
period a year ago.
- Adjusted net income was $84.0 million, or $0.72 per diluted
share, compared to $77.8 million, or $0.67 per diluted share, in
the prior year quarter. The increase was primarily driven by the
improvement in gross margin.
Adjusted EBITDA
- Adjusted EBITDA grew $5.5 million to $160.3 million, an
increase of 3.5 percent. The increase was primarily driven by the
factors described above. As a result, Adjusted EBITDA improved to
8.1 percent of sales in the third quarter from 7.3 percent in the
same period a year ago.
Year to Date September 30, 2019 Financial Information:Net
Sales
- Net sales were $5.5 billion, a 6.6 percent decrease compared to
the prior year period, driven by the impact of commodity price
deflation. Sales volume increased by an estimated 6.3 percent,
driven by growth across all of our product categories led by growth
in value-added product categories.
Gross Margin
- Gross margin increased $70.1 million to $1.5 billion. The gross
margin percentage increased to 27.2 percent from 24.2 percent in
the prior year period, a 300 basis point improvement. 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 from our higher margin, value-added product categories
contributed to increased gross profit dollars and percentage
compared to the prior year period.
Adjusted Net Income
- Net income was $180.4 million, or $1.54 per diluted share,
compared to $153.2 million, or $1.31 per diluted share, in the
prior year period, representing an increase of $0.23 per diluted
share, or 17.5 percent.
- Adjusted net income was $198.0 million, or $1.69 per diluted
share, compared to $168.1 million, or $1.44 per diluted share, in
the year ago period, representing an increase of $0.25 per diluted
share. The year over year increase in adjusted net income of
$29.8 million, or 17.7 percent, was primarily driven by the higher
gross margin.
Adjusted EBITDA
- Adjusted EBITDA grew $30.2 million to $406.8 million, or 7.4
percent of sales, compared to $376.6 million, or 6.4 percent of
sales, in the prior year period. The Adjusted EBITDA increase
of 8.0 percent in dollars, and 100 basis points as a percent of
sales, was primarily due to the factors described above.
Capital Structure, Leverage, and Liquidity Information:
- Adjusted EBITDA, on a trailing twelve-month basis, was $531.8
million and net debt was $1,334.2 million as of September 30, 2019.
The net debt to Adjusted EBITDA leverage ratio decreased to 2.5x
from 2.7x at June 30, 2019, a reduction of 0.2x and at the low end
of the Company’s previously stated leverage target ratio of between
2.5x and 3.5x.
- Net cash provided from operations and investing was $254
million due primarily to the impact of commodity deflation on the
value of working capital in the first nine months compared to the
prior year period.
- Liquidity as of September 30, 2019 was $856.8 million,
consisting of $43.3 million cash on hand and $813.5 million net
borrowing availability under our revolving credit facility.
- In July 2019, the Company issued an additional $75 million in
2027 Notes to repurchase a portion of our 2024 Notes and pay
related transaction fees and expenses.
Acquisition Activity:
- In July 2019, we acquired certain assets and operations of Sun
State Components for $42.5 million in cash. The assets include
three automated truss facilities, manufacturing value-added
products, located in Arizona and Nevada expanding our presence to
40 states and 77 of the top 100 U.S. metropolitan statistical
areas.
Outlook:“As we enter the end of the peak home buying season, the
overall market outlook continues to improve. Homebuilders are
increasingly catering to the demands of buyers with a more
affordable and right-sized product. Our leadership in ongoing
growth initiatives and investments in value-added products enable
us to provide productivity solutions to help our customers pivot
their offering to the demands of homebuyers. The above market
growth in higher margin sales has favorably shifted our sales mix
so that we expect normalized gross margin to remain above 26
percent in a stable commodity environment. The implementation
of our strategic plan has positioned us to continue to deliver
strong results as we execute on our operational excellence programs
and build a stronger, more agile organization. I would like to
thank our fifteen thousand team members for the milestones achieved
this quarter and look forward to building on our strengths in the
future,” concluded Mr. Crow.
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.
Conference CallBuilders FirstSource will host a conference call
Friday, November 1st, 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, October
31st. To participate in the teleconference, please dial into
the call a few minutes before the start time: 800-367-2403 (U.S.
and Canada) and 334-777-6978 (international), Conference ID:
8210119. A replay of the call will be available at 1:00 p.m.
Central Time through November 16th. To
access the replay, please dial 888-203-1112 (U.S. and Canada) and
719-457-0820 (international) and refer to pass code 8210119. 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 Notice
Statements 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 SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
September 30, |
|
|
September 30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
(In thousands, except per share amounts) |
|
|
Sales |
|
$ |
1,981,035 |
|
|
$ |
2,118,467 |
|
|
$ |
5,516,858 |
|
|
$ |
5,908,791 |
|
|
Cost of sales |
|
|
1,439,893 |
|
|
|
1,595,686 |
|
|
|
4,016,585 |
|
|
|
4,478,630 |
|
|
Gross margin |
|
|
541,142 |
|
|
|
522,781 |
|
|
|
1,500,273 |
|
|
|
1,430,161 |
|
|
Selling, general and
administrative expenses |
|
|
411,510 |
|
|
|
400,993 |
|
|
|
1,183,105 |
|
|
|
1,151,670 |
|
|
Income from operations |
|
|
129,632 |
|
|
|
121,788 |
|
|
|
317,168 |
|
|
|
278,491 |
|
|
Interest expense, net |
|
|
27,788 |
|
|
|
29,106 |
|
|
|
82,071 |
|
|
|
84,805 |
|
|
Income before income taxes |
|
|
101,844 |
|
|
|
92,682 |
|
|
|
235,097 |
|
|
|
193,686 |
|
|
Income tax expense |
|
|
23,714 |
|
|
|
19,354 |
|
|
|
54,655 |
|
|
|
40,516 |
|
|
Net income |
|
$ |
78,130 |
|
|
$ |
73,328 |
|
|
$ |
180,442 |
|
|
$ |
153,170 |
|
|
Comprehensive income |
|
$ |
78,130 |
|
|
$ |
73,328 |
|
|
$ |
180,442 |
|
|
$ |
153,170 |
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.68 |
|
|
$ |
0.64 |
|
|
$ |
1.56 |
|
|
$ |
1.34 |
|
|
Diluted |
|
$ |
0.67 |
|
|
$ |
0.63 |
|
|
$ |
1.54 |
|
|
$ |
1.31 |
|
|
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
115,732 |
|
|
|
114,707 |
|
|
|
115,639 |
|
|
|
114,480 |
|
|
Diluted |
|
|
117,154 |
|
|
|
116,456 |
|
|
|
116,870 |
|
|
|
116,614 |
|
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET |
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
(In thousands, except per share amounts) |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
43,271 |
|
|
$ |
10,127 |
|
Accounts receivable, less allowances of $14,280 and $13,054 at
September 30, 2019 and December 31, 2018, respectively |
|
|
721,134 |
|
|
|
654,170 |
|
Other receivables |
|
|
49,526 |
|
|
|
68,637 |
|
Inventories, net |
|
|
581,543 |
|
|
|
596,896 |
|
Other current assets |
|
|
34,603 |
|
|
|
43,921 |
|
Total current assets |
|
|
1,430,077 |
|
|
|
1,373,751 |
|
Property, plant and equipment,
net |
|
|
696,154 |
|
|
|
670,075 |
|
Operating lease right-of-use
assets, net |
|
|
286,971 |
|
|
|
- |
|
Goodwill |
|
|
754,765 |
|
|
|
740,411 |
|
Intangible assets, net |
|
|
101,303 |
|
|
|
103,154 |
|
Deferred income taxes |
|
|
5,055 |
|
|
|
22,766 |
|
Other assets, net |
|
|
23,434 |
|
|
|
22,152 |
|
Total assets |
|
$ |
3,297,759 |
|
|
$ |
2,932,309 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
499,360 |
|
|
$ |
423,168 |
|
Accrued liabilities |
|
|
289,735 |
|
|
|
292,526 |
|
Current portion of operating lease liabilities |
|
|
60,280 |
|
|
|
- |
|
Current maturities of long-term debt |
|
|
14,370 |
|
|
|
15,565 |
|
Total current
liabilities |
|
|
863,745 |
|
|
|
731,259 |
|
Noncurrent portion of operating
lease liabilities |
|
|
232,475 |
|
|
|
- |
|
Long-term debt, net of current
maturities, debt discount, premium and issuance costs |
|
|
1,350,467 |
|
|
|
1,545,729 |
|
Deferred income taxes |
|
|
18,836 |
|
|
|
- |
|
Other long-term liabilities |
|
|
53,235 |
|
|
|
58,983 |
|
Total liabilities |
|
|
2,518,758 |
|
|
|
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; 115,767
and 115,078 shares issued and outstanding at September 30, 2019 and
December 31, 2018, respectively |
|
|
1,158 |
|
|
|
1,151 |
|
Additional paid-in capital |
|
|
570,373 |
|
|
|
560,221 |
|
Retained earnings |
|
|
207,470 |
|
|
|
34,966 |
|
Total stockholders' equity |
|
|
779,001 |
|
|
|
596,338 |
|
Total liabilities and stockholders' equity |
|
$ |
3,297,759 |
|
|
$ |
2,932,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)(In thousands) |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
180,442 |
|
|
$ |
153,170 |
|
Adjustments to reconcile net
income to net cash from operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
71,771 |
|
|
|
72,691 |
|
Amortization of debt discount, premium and issuance costs |
|
|
3,060 |
|
|
|
3,479 |
|
Loss on extinguishment of debt, net |
|
|
4,654 |
|
|
|
- |
|
Deferred income taxes |
|
|
36,547 |
|
|
|
35,829 |
|
Stock compensation expense |
|
|
9,380 |
|
|
|
9,929 |
|
Net gain on sale of assets and asset impairments |
|
|
(1,502 |
) |
|
|
(480 |
) |
Changes in assets and
liabilities, net of assets acquired and liabilities assumed: |
|
|
|
|
|
|
|
|
Receivables |
|
|
(41,083 |
) |
|
|
(151,092 |
) |
Inventories |
|
|
22,263 |
|
|
|
(86,639 |
) |
Other current assets |
|
|
8,968 |
|
|
|
(1,786 |
) |
Other assets and liabilities |
|
|
1,756 |
|
|
|
1,442 |
|
Accounts payable |
|
|
73,913 |
|
|
|
(12,792 |
) |
Accrued liabilities |
|
|
(9,905 |
) |
|
|
(14,219 |
) |
Net cash provided by operating activities |
|
|
360,264 |
|
|
|
9,532 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(77,937 |
) |
|
|
(78,693 |
) |
Proceeds from sale of property, plant and equipment |
|
|
5,474 |
|
|
|
1,890 |
|
Cash used for acquisitions |
|
|
(33,931 |
) |
|
|
- |
|
Net cash used in investing activities |
|
|
(106,394 |
) |
|
|
(76,803 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility |
|
|
885,000 |
|
|
|
1,243,000 |
|
Repayments under revolving credit facility |
|
|
(1,064,000 |
) |
|
|
(1,189,000 |
) |
Proceeds from long-term debt and other loans |
|
|
478,375 |
|
|
|
3,818 |
|
Repayments of long-term debt and other loans |
|
|
(502,062 |
) |
|
|
(11,173 |
) |
Payments of debt extinguishment costs |
|
|
(2,301 |
) |
|
|
- |
|
Payments of loan costs |
|
|
(8,566 |
) |
|
|
- |
|
Exercise of stock options |
|
|
3,220 |
|
|
|
2,394 |
|
Repurchase of common stock |
|
|
(10,392 |
) |
|
|
(4,855 |
) |
Net cash provided by (used
in) financing activities |
|
|
(220,726 |
) |
|
|
44,184 |
|
Net change in cash and cash
equivalents |
|
|
33,144 |
|
|
|
(23,087 |
) |
Cash and cash equivalents at
beginning of the period |
|
|
10,127 |
|
|
|
57,533 |
|
Cash and cash equivalents at end
of the period |
|
$ |
43,271 |
|
|
$ |
34,446 |
|
Supplemental disclosure of non-cash
activities
Purchases of property, plant and equipment included in accounts
payable were $2.1 million and $2.5 million for the nine months
ended September 30, 2019 and 2018, respectively.
The Company purchased equipment which was financed through
finance lease obligations of $11.7 million and capital lease
obligations of $9.0 million in the nine months ended September 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 October 31, 2019. |
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, |
|
Nine months
ended September 30, |
|
Twelve months ended September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
(in millions) |
|
|
|
Reconciliation to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income |
$ |
78.1 |
|
|
$ |
73.3 |
|
|
$ |
180.4 |
|
|
$ |
153.2 |
|
|
$ |
232.5 |
|
|
Integration
related expenses |
|
2.8 |
|
|
|
4.5 |
|
|
|
10.8 |
|
|
|
14.9 |
|
|
|
15.1 |
|
|
Debt
issuance and refinancing cost (1) |
|
3.1 |
|
|
|
- 0 |
|
|
|
6.8 |
|
|
|
- 0 |
|
|
|
3.6 |
|
|
Adjusted Net
Income |
|
84.0 |
|
|
|
77.8 |
|
|
|
198.0 |
|
|
|
168.1 |
|
|
|
251.2 |
|
|
Weighted
average diluted common shares (in millions) |
|
117.2 |
|
|
|
116.5 |
|
|
|
116.9 |
|
|
|
116.6 |
|
|
|
|
Diluted
adjusted net income per share: |
$ |
0.72 |
|
|
$ |
0.67 |
|
|
$ |
1.69 |
|
|
$ |
1.44 |
|
|
|
|
Reconciling
items: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
24.4 |
|
|
|
25.1 |
|
|
|
71.8 |
|
|
|
72.7 |
|
|
|
97.0 |
|
|
Interest expense, net |
|
24.7 |
|
|
|
29.1 |
|
|
|
75.3 |
|
|
|
84.8 |
|
|
|
101.9 |
|
|
Income tax (benefit) expense |
|
23.7 |
|
|
|
19.4 |
|
|
|
54.7 |
|
|
|
40.5 |
|
|
|
69.7 |
|
|
Stock compensation expense |
|
3.3 |
|
|
|
3.5 |
|
|
|
9.4 |
|
|
|
9.9 |
|
|
|
13.9 |
|
|
(Gain)/loss on sale and asset impairments |
|
(0.2 |
) |
|
|
(0.2 |
) |
|
|
(3.2 |
) |
|
|
(0.1 |
) |
|
|
(2.1 |
) |
|
Other management-identified adjustments (2) |
|
0.4 |
|
|
|
0.1 |
|
|
|
0.8 |
|
|
|
0.7 |
|
|
|
0.2 |
|
|
Adjusted EBITDA |
$ |
160.3 |
|
|
$ |
154.8 |
|
|
$ |
406.8 |
|
|
$ |
376.6 |
|
|
$ |
531.8 |
|
|
Adjusted EBITDA Margin |
|
8.1 |
% |
|
|
7.3 |
% |
|
|
7.4 |
% |
|
|
6.4 |
% |
|
|
7.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30, |
|
Nine months
ended September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions except
per share amounts) |
|
Net
sales |
|
1,981.0 |
|
|
|
2,118.5 |
|
|
|
5,516.9 |
|
|
|
5,908.8 |
|
|
Gross margin |
|
541.1 |
|
|
|
522.8 |
|
|
|
1,500.3 |
|
|
|
1,430.2 |
|
|
Gross margin % |
|
27.3 |
% |
|
|
24.7 |
% |
|
|
27.2 |
% |
|
|
24.2 |
% |
|
Adjusted SG&A/Other (excluding depreciation and amortization)
as a % of sales (1) |
|
19.2 |
% |
|
|
17.4 |
% |
|
|
19.8 |
% |
|
|
17.8 |
% |
|
Adjusted
EBITDA |
|
160.3 |
|
|
|
154.8 |
|
|
|
406.8 |
|
|
|
376.6 |
|
|
Adjusted EBITDA margin % |
|
8.1 |
% |
|
|
7.3 |
% |
|
|
7.4 |
% |
|
|
6.4 |
% |
|
Depreciation
and amortization |
|
(24.4 |
) |
|
|
(25.1 |
) |
|
|
(71.8 |
) |
|
|
(72.7 |
) |
|
Interest
expense, net of debt issuance cost and refinancing |
|
(24.7 |
) |
|
|
(29.1 |
) |
|
|
(75.3 |
) |
|
|
(84.8 |
) |
|
Income tax
expense |
|
(23.7 |
) |
|
|
(19.4 |
) |
|
|
(54.7 |
) |
|
|
(40.5 |
) |
|
Other
adjustments |
|
(3.5 |
) |
|
|
(3.4 |
) |
|
|
(7.0 |
) |
|
|
(10.5 |
) |
|
Adjusted Net Income |
$ |
84.0 |
|
|
$ |
77.8 |
|
|
$ |
198.0 |
|
|
$ |
168.1 |
|
|
Basic
adjusted net income per share: |
$ |
0.73 |
|
|
$ |
0.68 |
|
|
$ |
1.71 |
|
|
$ |
1.47 |
|
|
Diluted
adjusted net income per share: |
$ |
0.72 |
|
|
$ |
0.67 |
|
|
$ |
1.69 |
|
|
$ |
1.44 |
|
|
Weighted
average common shares (in millions) |
|
|
|
|
|
|
|
|
Basic |
|
115.7 |
|
|
|
114.7 |
|
|
|
115.6 |
|
|
|
114.5 |
|
|
Diluted |
|
117.2 |
|
|
|
116.5 |
|
|
|
116.9 |
|
|
|
116.6 |
|
|
|
|
|
|
|
|
|
|
|
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
October 31, 2019. |
|
|
|
|
|
|
|
|
(1) Adjusted SG&A
and other as a percentage of sales is defined as GAAP SG&A less
total depreciation and amortization, stock comp, acquisition,
integration |
and other
expenses. GAAP SG&A in Q3-19 of $411.5M less $24.4M
depreciation and amortization, less $2.8M of integration expenses,
less $3.3M |
of stock comp,
less $0.2 in gains on assets, impairments, and other. GAAP SG&A
in 9M-19 of $1,183.1M less $71.8M depreciation and
amortization, |
less $10.8M of
integration expenses, less $9.4M of stock comp, plus $2.4 in gains
on assets, impairments, and other. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS
FIRSTSOURCE, INC. AND SUBSIDIARIES |
Sales
by Product Category |
(adjusted
and unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
Nine months ended September 30, |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
Net Sales |
|
% of Net Sales |
|
Net Sales |
|
% of Net Sales |
|
% Change |
|
% Change Per Day |
|
Net Sales |
|
% of Net Sales |
|
Net Sales |
|
% of Net Sales |
|
% Change |
Lumber & Lumber Sheet Goods |
$ |
605.5 |
|
30.6 |
% |
|
$ |
818.7 |
|
38.6 |
% |
|
-26.0 |
% |
|
-27.2 |
% |
|
$ |
1,724.7 |
|
31.3 |
% |
|
$ |
2,273.8 |
|
|
38.5 |
% |
|
-24.1 |
% |
Manufactured
Products |
|
401.2 |
|
20.2 |
% |
|
|
385.9 |
|
18.2 |
% |
|
4.0 |
% |
|
2.4 |
% |
|
|
1,092.9 |
|
19.8 |
% |
|
|
1,051.0 |
|
|
17.8 |
% |
|
4.0 |
% |
Windows,
Doors & Millwork |
|
407.4 |
|
20.6 |
% |
|
|
372.5 |
|
17.6 |
% |
|
9.4 |
% |
|
7.7 |
% |
|
|
1,151.8 |
|
20.9 |
% |
|
|
1,080.1 |
|
|
18.3 |
% |
|
6.6 |
% |
Gypsum,
Roofing & Insulation |
|
149.7 |
|
7.6 |
% |
|
|
146.6 |
|
6.9 |
% |
|
2.1 |
% |
|
0.5 |
% |
|
|
409.0 |
|
7.4 |
% |
|
|
400.8 |
|
|
6.8 |
% |
|
2.0 |
% |
Siding,
Metal & Concrete Products |
|
201.0 |
|
10.1 |
% |
|
|
196.6 |
|
9.3 |
% |
|
2.3 |
% |
|
0.6 |
% |
|
|
542.3 |
|
9.8 |
% |
|
|
528.3 |
|
|
8.9 |
% |
|
2.6 |
% |
Other |
|
216.2 |
|
10.9 |
% |
|
|
198.2 |
|
9.4 |
% |
|
9.1 |
% |
|
7.3 |
% |
|
|
596.2 |
|
10.8 |
% |
|
|
574.8 |
|
|
9.7 |
% |
|
3.7 |
% |
Total adjusted net sales |
$ |
1,981.0 |
|
100.0 |
% |
|
$ |
2,118.5 |
|
100.0 |
% |
|
-6.5 |
% |
|
-8.0 |
% |
|
$ |
5,516.9 |
|
100.0 |
% |
|
$ |
5,908.8 |
|
|
100.0 |
% |
|
-6.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: In
Millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS
FIRSTSOURCE, INC. AND SUBSIDIARIES |
|
Debt,
Interest and Free Cash Flow Reconciliation |
|
(unaudited) |
|
|
|
|
|
|
|
Three months
ended September 30, 2019 |
|
|
Interest Expense |
|
Net Debt Outstanding |
|
|
|
|
|
|
|
|
|
|
Debt and Interest |
(in millions) |
|
2027 Secured Notes @ 6.75% Fixed |
$ |
7.7 |
|
|
$ |
475.0 |
|
|
2024 Secured Notes @ 5.625% Fixed |
|
7.4 |
|
|
|
503.9 |
|
|
2024 Term Loan @ 5.6% (Floating LIBOR) |
|
2.1 |
|
|
|
157.1 |
|
|
Revolving Credit Facility @ 4.4% (Floating LIBOR) |
|
1.3 |
|
|
|
- 0 |
|
|
Amortization of deferred loan costs and debt discount |
|
1.0 |
|
|
|
|
Finance leases and other finance obligations |
|
5.2 |
|
|
|
241.5 |
|
|
Debt issuance and refinancing cost |
|
3.1 |
|
|
|
|
Cash |
|
|
|
(43.3 |
) |
|
Total |
$ |
27.8 |
|
|
$ |
1,334.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, |
|
Nine months
ended September 30, |
|
|
|
2019 |
|
|
|
2019 |
|
|
Free Cash Flow |
(in millions) |
|
(in millions) |
|
Cash flows from operating activities |
$ |
182 |
|
|
$ |
360 |
|
|
Less: Purchases of property, plant and equipment |
|
(33 |
) |
|
|
(78 |
) |
|
Free Cash Flow |
$ |
149 |
|
|
$ |
282 |
|
|
|
|
|
|
|
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