Builders FirstSource, Inc. (Nasdaq: BLDR)
today reported its results for the second quarter ending June 30,
2020.
Second Quarter 2020 Highlights:
- Net sales for the quarter increased by 2.2% compared to the
prior year period- Core organic sales declined 2.1%, excluding
acquisitions and commodity impacts- Acquisitions contributed net
sales growth of 2.5%- Estimated sales volume, which includes core
organic and acquisitions, grew by 0.4%- Commodity inflation
increased sales by 1.8%
- Adjusted EBITDA increased 11.2% to a record $162 million, or
8.3% of net sales driven by disciplined cost management
- Net income of $78.9 million, or $0.67 per diluted share, and
adjusted net income of $79.2 million, or $0.67 per diluted
share
- Strong quarter-end balance sheet with a net debt to Adjusted
EBITDA ratio of 2.3x and liquidity of $1.2 billion.
CEO Chad Crow said, “We are incredibly proud of our team’s
ability to overcome the challenges presented by the COVID-19
pandemic and produce record-setting second quarter EBITDA results.
During the quarter, we carefully monitored local business
conditions in order to safely and effectively deliver critical
products and services to our customers, all while preserving as
many jobs as possible. As we look at our markets, improvement in
housing data, record low mortgage rates, and shifts toward suburban
living are all encouraging and continue to support demand for our
integrated services. To that end, in June, we experienced a sharp
sequential rebound in sales. Going forward, we remain confident in
our ability to outperform the market as well as mitigate business
disruptions outside of our control related to the COVID-19
pandemic.”
CFO Peter Jackson added, “Our proactive actions and focused
execution at the onset of the COVID-19 pandemic allowed us to
operate effectively throughout a challenging environment. During
the first half of the year, we actively enhanced our financial
flexibility, liquidity, and cash flow to better position our
business for continued success. We are pleased with our progress in
de-leveraging and fortifying our balance sheet as we reduced our
net leverage ratio to 2.3x, which is below the low end of our
targeted range.”
Second Quarter 2020 Compared to Second Quarter 2019
Net Sales
- Net sales for the second quarter ending June 30, 2020, were
$1.9 billion, a 2.2% increase compared to a year ago. Core organic
sales declined by 2.1% and commodity price inflation added 1.8% to
net sales.
- Acquisitions contributed net sales growth of 2.5% attributable
to the five acquisitions completed during the prior four
quarters.
- Value-added product sales volume grew by an estimated 0.4%, led
by 3.3% growth in our Windows, Doors, and Millwork product category
partially offset by a decline of 2.6% in our Manufactured
Products.
- Demand remained resilient across our three customer end
markets. Single family and multi-family estimated sales volume
declined by 0.6% and 1.4%, respectively, while repair and remodel /
other grew estimated sales volume by 4.1%.
Gross Margin
- Gross margin was $517.3 million, flat compared with the prior
year. Our gross margin percentage decreased to 26.6 percent from
27.2 percent in the prior year period. The decrease was
attributable to the expected normalization in our lumber and lumber
sheet goods product category gross margin percentage compared to
the prior year period.
Selling, General and Administrative Expenses
- SG&A in the second quarter of 2020 was $388.1 million, a
decrease of approximately $13.4 million, driven by disciplined cost
reduction which resulted in lower variable compensation and benefit
expenses, travel and entertainment expense, as well as lower fuel
expense. As a percentage of sales, SG&A decreased by 110 basis
points to 19.9 percent.
Interest Expense
- Interest expense decreased by $2.6 million to $26.8 million
compared to the same period last year. The year over year decrease
is largely due to one-time charges related to debt financing
transactions executed in the prior year period. Adjusting for the
one-time charges in both periods, interest expense increased by
$1.7 million due to a higher outstanding debt balance as compared
to the prior year quarter, partially offset by the effect of lower
interest rates.
Income Tax Expense
- Income tax expense in the second quarter of 2020 was $23.5
million, or an effective tax rate of 23.0%. In the same period of
the prior year, income tax expense was $19.7 million, or an
effective tax rate of 22.8%.
Adjusted Net Income
- Net income was $78.9 million, or $0.67 per diluted share,
compared to $66.6 million, or $0.57 per diluted share, in the same
period a year ago.
- Adjusted net income was $79.2 million, or $0.67 per diluted
share, compared to $74.1 million, or $0.63 per diluted share, in
the second quarter of 2019. The increase in adjusted net income of
$5.1 million, or 6.9%, was primarily driven by the reduction in
variable SG&A described above.
Adjusted EBITDA
- Adjusted EBITDA grew $16.3 million to $161.9 million, an
increase of 11.2%, setting a quarterly record. The increase was
driven by our cost management measures during the COVID-19
pandemic. As a result, Adjusted EBITDA improved to 8.3% of sales in
the second quarter from 7.6% in the same period a year ago.
Year to Date June 30, 2020 Financial Information:
Net Sales
- Net sales year to date were $3.7 billion, a 5.6% increase
compared to the first half of 2019, largely driven by the impact of
acquisitions of 3.0% while core organic growth contributed 0.6%.
Commodity inflation and one additional selling day increased sales
by 1.2% and 0.8%, respectively.
- Estimated sales volume grew 3.6%. Demand increased across our
three customer end markets. We grew in all of our product
categories with the exception of Gypsum, Roofing and
Insulation.
Gross Margin
- Gross margin increased $23.6 million to $982.7 million. Our
gross margin percentage decreased to 26.3% in the first half of
2020 from 27.1% in the first six months of 2019, an 80 basis point
decrease. The decrease was attributable to the expected
normalization in our lumber and lumber sheet goods product category
gross margin percentage, compared to the prior year period in which
we experienced a particularly strong gross margin percentage, due
in part to commodity deflation.
Adjusted Net Income
- GAAP net income was $87.7 million, or $0.75 per diluted share,
compared to $102.3 million, or $0.88 per diluted share, in the
first half of 2019, a decrease of $0.13 per diluted share, or
14.9%.Adjusted net income was $119.4 million, or $1.02 per diluted
share, compared to $113.9 million, or $0.98 per diluted share, in
the first half of 2019, an increase of $0.04 per diluted
share. The increase in adjusted net income of $5.5 million,
or 4.8%, was primarily driven by the increase in net sales,
partially offset by higher SG&A.
Adjusted EBITDA
- Adjusted EBITDA for the first half of 2020 grew $12.4 million
to a record $258.9 million, or 6.9% percent of sales, compared to
$246.5 million, or 7.0% of sales, for the first half of 2019, an
increase of 5.0%. The year over year improvement was due to the
increased gross margin partially offset by higher SG&A, related
to the acquisitions completed over the last four quarters.
Capital Structure, Leverage, and Liquidity Information:
- Adjusted EBITDA, on a trailing twelve-month basis, was $528.0
million and net debt was $1.237 million as of June 30, 2020. Our
net leverage ratio decreased to 2.3x net debt to Adjusted EBITDA at
June 30, 2020 from 2.8x as of March 31, 2020, a reduction of 0.5x
and below the Company’s target leverage ratio of between 2.5x and
3.5x.
- Cash generated by operating activities was $169.9 million in
the first six months of the year. Cash used in investing activities
was $69.3 million in the first half of 2020 including capital
expenditures, net of proceeds, of $53.4 million and $15.9 million
used for our acquisitions.
- In April of 2020, we completed a private offering of an
additional $350.0 million in aggregate principal amount of senior
secured notes due 2027 at an issue price of 98.75% of par value.
Proceeds were used to repay the funds drawn under our revolving
credit facility and to pay related transaction fees and expenses,
with the remaining net proceeds available as cash on hand.
- Liquidity as of June 30, 2020 was $1.2 billion, consisting of
$817.8 million in net borrowing availability under the revolving
credit facility and $385.5 million cash on hand.
Outlook
Mr. Crow concluded, “Our first half results demonstrate a
positive overall homebuilding environment, supported by tailwinds
and rising demand across our diverse, national footprint. We are
focusing our efforts on disciplined cost management while we work
to efficiently meet customer demand, manage the impact of
accelerating commodity inflation and generate additional cash flow
in the third quarter. We are exceptionally well-positioned to
execute on organic and inorganic value-enhancing growth
opportunities that advance our long-range plan, and help us win in
our markets. I especially thank our fifteen thousand team members
for the milestones achieved and the ongoing safety-first emphasis
in an unprecedented environment.”
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.
Please refer to the accompanying financial schedules for more
information.
Conference CallBuilders FirstSource will host a conference call
Friday, July 31, 2020, 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, July
30th. To participate in the teleconference, please dial into
the call a few minutes before the start time: 800-458-4121 (U.S.
and Canada) and 323-794-2093 (international), Conference ID:
3901667. A replay of the call will be available at 1:00 p.m.
Central Time through August 15th. To access the replay, please dial
888-203-1112 (U.S. and Canada) and 719-457-0820 (international) and
refer to pass code 3901667. 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 recent novel coronavirus disease 2019 (also known as
“COVID-19”) pandemic, 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, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
(Unaudited) |
|
|
(In thousands, except per share amounts) |
Net sales |
|
$ |
1,945,643 |
|
|
$ |
1,904,523 |
|
|
$ |
3,732,664 |
|
|
$ |
3,535,823 |
Cost of sales |
|
|
1,428,311 |
|
|
|
1,387,367 |
|
|
|
2,749,919 |
|
|
|
2,576,692 |
Gross margin |
|
|
517,332 |
|
|
|
517,156 |
|
|
|
982,745 |
|
|
|
959,131 |
Selling, general and
administrative expenses |
|
|
388,077 |
|
|
|
401,511 |
|
|
|
792,543 |
|
|
|
771,595 |
Income from operations |
|
|
129,255 |
|
|
|
115,645 |
|
|
|
190,202 |
|
|
|
187,536 |
Interest expense, net |
|
|
26,812 |
|
|
|
29,382 |
|
|
|
78,743 |
|
|
|
54,283 |
Income before income taxes |
|
|
102,443 |
|
|
|
86,263 |
|
|
|
111,459 |
|
|
|
133,253 |
Income tax expense |
|
|
23,519 |
|
|
|
19,659 |
|
|
|
23,768 |
|
|
|
30,941 |
Net income |
|
$ |
78,924 |
|
|
$ |
66,604 |
|
|
$ |
87,691 |
|
|
$ |
102,312 |
Comprehensive income |
|
$ |
78,924 |
|
|
$ |
66,604 |
|
|
$ |
87,691 |
|
|
$ |
102,312 |
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.68 |
|
|
$ |
0.58 |
|
|
$ |
0.75 |
|
|
$ |
0.89 |
Diluted |
|
$ |
0.67 |
|
|
$ |
0.57 |
|
|
$ |
0.75 |
|
|
$ |
0.88 |
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
116,634 |
|
|
|
115,757 |
|
|
|
116,446 |
|
|
|
115,592 |
Diluted |
|
|
117,547 |
|
|
|
116,919 |
|
|
|
117,520 |
|
|
|
116,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
|
|
June 30, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
(Unaudited) |
|
|
(In thousands, except per share amounts) |
ASSETS |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
385,461 |
|
|
$ |
14,096 |
Accounts receivable, less allowances of $16,834 and $13,492 at June
30, 2020 and December 31, 2019, respectively |
|
|
719,684 |
|
|
|
614,946 |
Other receivables |
|
|
45,164 |
|
|
|
77,447 |
Inventories, net |
|
|
615,142 |
|
|
|
561,255 |
Other current assets |
|
|
36,136 |
|
|
|
39,123 |
Total current assets |
|
|
1,801,587 |
|
|
|
1,306,867 |
Property, plant and equipment, net |
|
|
743,542 |
|
|
|
721,887 |
Operating lease right-of-use assets, net |
|
|
286,354 |
|
|
|
292,684 |
Goodwill |
|
|
777,283 |
|
|
|
769,022 |
Intangible assets, net |
|
|
126,519 |
|
|
|
128,388 |
Deferred
income taxes |
|
|
7,693 |
|
|
|
8,417 |
Other
assets, net |
|
|
21,700 |
|
|
|
22,225 |
Total assets |
|
$ |
3,764,678 |
|
|
$ |
3,249,490 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
554,394 |
|
|
$ |
436,823 |
Accrued liabilities |
|
|
292,851 |
|
|
|
308,950 |
Current portion of operating lease liabilities |
|
|
61,887 |
|
|
|
61,653 |
Current maturities of long-term debt |
|
|
23,974 |
|
|
|
13,875 |
Total current liabilities |
|
|
933,106 |
|
|
|
821,301 |
Noncurrent portion of operating lease liabilities |
|
|
230,634 |
|
|
|
236,948 |
Long-term debt, net of current maturities, debt discount, and debt
issuance costs |
|
|
1,577,884 |
|
|
|
1,277,398 |
Deferred
income taxes |
|
|
38,169 |
|
|
|
36,645 |
Other
long-term liabilities |
|
|
68,951 |
|
|
|
52,245 |
Total liabilities |
|
|
2,848,744 |
|
|
|
2,424,537 |
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; 116,701
and 116,052 shares issued and outstanding at June 30, 2020 and
December 31, 2019, respectively |
|
|
1,167 |
|
|
|
1,161 |
Additional paid-in capital |
|
|
578,239 |
|
|
|
574,955 |
Retained earnings |
|
|
336,528 |
|
|
|
248,837 |
Total stockholders' equity |
|
|
915,934 |
|
|
|
824,953 |
Total liabilities and stockholders' equity |
|
$ |
3,764,678 |
|
|
$ |
3,249,490 |
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
(Unaudited)(In thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
87,691 |
|
|
$ |
102,312 |
|
Adjustments to reconcile net
income to net cash from operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
57,875 |
|
|
|
47,390 |
|
Amortization of debt issuance costs and debt discount |
|
|
1,587 |
|
|
|
2,132 |
|
Loss on extinguishment of debt, net |
|
|
5,349 |
|
|
|
1,498 |
|
Deferred income taxes |
|
|
2,248 |
|
|
|
21,390 |
|
Stock compensation expense |
|
|
6,720 |
|
|
|
6,038 |
|
Net gain on sale of assets and asset impairments |
|
|
(188 |
) |
|
|
(1,023 |
) |
Changes in assets and liabilities, net of assets acquired and
liabilities assumed: |
|
|
|
|
|
|
|
|
Receivables |
|
|
(69,991 |
) |
|
|
(47,113 |
) |
Inventories |
|
|
(53,685 |
) |
|
|
(20,631 |
) |
Other current assets |
|
|
2,987 |
|
|
|
7,271 |
|
Other assets and liabilities |
|
|
39,452 |
|
|
|
1,057 |
|
Accounts payable |
|
|
108,152 |
|
|
|
90,050 |
|
Accrued liabilities |
|
|
(18,311 |
) |
|
|
(31,586 |
) |
Net cash provided by operating activities |
|
|
169,886 |
|
|
|
178,785 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(54,809 |
) |
|
|
(45,392 |
) |
Proceeds from sale of property, plant and equipment |
|
|
1,451 |
|
|
|
4,620 |
|
Cash used for acquisitions |
|
|
(15,893 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(69,251 |
) |
|
|
(40,772 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility |
|
|
791,000 |
|
|
|
594,000 |
|
Repayments under revolving credit facility |
|
|
(818,000 |
) |
|
|
(700,000 |
) |
Proceeds from issuance of notes |
|
|
895,625 |
|
|
|
400,000 |
|
Repayments of long-term debt and other loans |
|
|
(557,964 |
) |
|
|
(423,743 |
) |
Payments of debt extinguishment costs |
|
|
(22,686 |
) |
|
|
— |
|
Payments of loan costs |
|
|
(13,800 |
) |
|
|
(7,278 |
|
Exercise of stock options |
|
|
708 |
|
|
|
1,883 |
|
Repurchase of common stock |
|
|
(4,153 |
) |
|
|
(2,450 |
) |
Net cash provided by (used in) financing activities |
|
|
270,730 |
|
|
|
(137,588 |
) |
Net change in cash and cash
equivalents |
|
|
371,365 |
|
|
|
425 |
|
Cash and cash equivalents at
beginning of the period |
|
|
14,096 |
|
|
|
10,127 |
|
Cash and cash equivalents at end
of the period |
|
$ |
385,461 |
|
|
$ |
10,552 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash activities
Purchases of property, plant and equipment included in accounts
payable were $1.9 million and $4.0 million for the six months ended
June 30, 2020 and 2019, respectively.
The Company acquired assets under operating lease obligations of
$26.0 million and $35.9 million for the six months ended June 30,
2020 and 2019, respectively. Additionally, the Company
acquired assets under finance lease obligations of $10.1 million
and $7.0 million for the six months ended June 30, 2020 and 2019,
respectively.
The Company made cash payments for interest of $55.4 million and
$50.0 million for the six months ended June 30, 2020 and 2019,
respectively. Additionally, the Company made cash payments
for taxes of $0.3 million and $2.8 million for the six months ended
June 30, 2020 and 2019, 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 8K filed with
the Securities and Exchange Commission on July 30, 2020.
|
Three months ended |
|
Six months ended |
|
Twelve months ended |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
(in millions) |
|
(in millions) |
Reconciliation to
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
GAAP Net Income |
$ |
78.9 |
|
|
$ |
66.6 |
|
|
$ |
87.7 |
|
|
$ |
102.3 |
|
|
$ |
207.2 |
|
Acquisition and Integration
Expense |
|
0.3 |
|
|
|
3.2 |
|
|
|
3.7 |
|
|
|
8.0 |
|
|
|
8.7 |
|
Debt issuance and refinancing
cost (1) |
|
- |
|
|
|
4.3 |
|
|
|
28.0 |
|
|
|
3.6 |
|
|
|
34.6 |
|
Adjusted Net Income |
|
79.2 |
|
|
|
74.1 |
|
|
|
119.4 |
|
|
|
113.9 |
|
|
|
250.5 |
|
Weighted average diluted
common shares (in millions) |
|
117.5 |
|
|
|
116.9 |
|
|
|
117.5 |
|
|
|
116.7 |
|
|
|
Diluted adjusted net income
per share: |
$ |
0.67 |
|
|
$ |
0.63 |
|
|
$ |
1.02 |
|
|
$ |
0.98 |
|
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
28.5 |
|
|
|
23.8 |
|
|
|
57.9 |
|
|
|
47.4 |
|
|
|
110.5 |
|
Interest expense, net |
|
26.8 |
|
|
|
25.1 |
|
|
|
50.7 |
|
|
|
50.7 |
|
|
|
99.4 |
|
Income tax (benefit) expense |
|
23.5 |
|
|
|
19.7 |
|
|
|
23.8 |
|
|
|
30.9 |
|
|
|
53.8 |
|
Stock compensation expense |
|
3.5 |
|
|
|
3.4 |
|
|
|
6.7 |
|
|
|
6.0 |
|
|
|
12.9 |
|
(Gain)/loss on sale and asset impairments |
|
0.1 |
|
|
|
(0.6 |
) |
|
|
- |
|
|
|
(3.0 |
) |
|
|
(0.2 |
) |
Other management-identified
adjustments (2) |
|
0.3 |
|
|
|
0.1 |
|
|
|
0.4 |
|
|
|
0.6 |
|
|
|
1.6 |
|
Adjusted EBITDA |
$ |
161.9 |
|
|
$ |
145.6 |
|
|
$ |
258.9 |
|
|
$ |
246.5 |
|
|
$ |
528.5 |
|
Adjusted EBITDA Margin |
|
8.3 |
% |
|
|
7.6 |
% |
|
|
7.0 |
% |
|
|
7.0 |
% |
|
|
7.1 |
% |
|
|
|
|
|
|
|
|
|
|
(1) Costs
associated with issuing and extinguishing long term debt in 2020
and 2019. |
|
|
|
|
|
|
(2) Primarily relates to
severance and one time cost. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES |
Financial Data |
(adjusted and unaudited) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
(in millions except share amounts) |
Net sales |
|
1,945.6 |
|
|
|
1,904.5 |
|
|
|
3,732.7 |
|
|
|
3,535.8 |
|
Cost of sales |
|
1,428.3 |
|
|
|
1,387.3 |
|
|
|
2,750.0 |
|
|
|
2,576.7 |
|
Gross margin |
|
517.3 |
|
|
|
517.2 |
|
|
|
982.7 |
|
|
|
959.1 |
|
Gross margin % |
|
26.6 |
% |
|
|
27.2 |
% |
|
|
26.3 |
% |
|
|
27.1 |
% |
Adjusted SG&A/Other (excluding depreciation
and amortization) as a % of sales (1) |
|
18.3 |
% |
|
|
19.5 |
% |
|
|
19.4 |
% |
|
|
20.1 |
% |
Adjusted EBITDA |
|
161.9 |
|
|
|
145.6 |
|
|
|
258.9 |
|
|
|
246.5 |
|
Adjusted EBITDA margin % |
|
8.3 |
% |
|
|
7.6 |
% |
|
|
6.9 |
% |
|
|
7.0 |
% |
Depreciation and
amortization |
|
(28.5 |
) |
|
|
(23.8 |
) |
|
|
(57.9 |
) |
|
|
(47.4 |
) |
Interest expense, net of debt
issuance cost and refinancing |
|
(26.8 |
) |
|
|
(25.1 |
) |
|
|
(50.7 |
) |
|
|
(50.7 |
) |
Income tax expense |
|
(23.5 |
) |
|
|
(19.7 |
) |
|
|
(23.8 |
) |
|
|
(30.9 |
) |
Other adjustments |
|
(3.9 |
) |
|
|
(2.9 |
) |
|
|
(7.1 |
) |
|
|
(3.6 |
) |
Adjusted Net Income |
$ |
79.2 |
|
|
$ |
74.1 |
|
|
$ |
119.4 |
|
|
$ |
113.9 |
|
Basic adjusted net income per
share: |
$ |
0.68 |
|
|
$ |
0.64 |
|
|
$ |
1.03 |
|
|
$ |
0.99 |
|
Diluted adjusted net income
per share: |
$ |
0.67 |
|
|
$ |
0.63 |
|
|
$ |
1.02 |
|
|
$ |
0.98 |
|
Weighted average common shares
(in millions) |
|
|
|
|
|
|
|
Basic |
|
116.6 |
|
|
|
115.8 |
|
|
|
116.4 |
|
|
|
115.6 |
|
Diluted |
|
117.5 |
|
|
|
116.9 |
|
|
|
117.5 |
|
|
|
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 July 30, 2020. |
(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
Q2-20 of $388.0M less $28.5M depreciation and amortization,
less $0.3M of acquisition and integration expenses, less $3.5M
of stock comp. |
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES |
Sales by Product Category |
(adjusted and unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2020 |
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
Net Sales |
|
% of Net Sales |
|
Net Sales |
|
% of Net Sales |
% Change |
% Core Organic (1) |
|
Net Sales |
|
% of Net Sales |
|
Net Sales |
|
% of Net Sales |
% Change |
% Change Per Day |
% Core Organic (1) |
Manufactured Products |
$ |
365.8 |
|
18.8 |
% |
|
$ |
374.3 |
|
19.7 |
% |
-2.3 |
% |
-6.3 |
% |
|
$ |
720.2 |
|
19.3 |
% |
|
$ |
691.7 |
|
19.6 |
% |
4.1 |
% |
3.3 |
% |
-1.7 |
% |
Windows, Doors &
Millwork |
|
404.0 |
|
20.8 |
% |
|
|
391.0 |
|
20.5 |
% |
3.3 |
% |
1.1 |
% |
|
|
795.4 |
|
21.3 |
% |
|
|
744.4 |
|
21.1 |
% |
6.9 |
% |
6.0 |
% |
3.9 |
% |
Value-Added Products |
|
769.8 |
|
39.6 |
% |
|
|
765.3 |
|
40.2 |
% |
0.6 |
% |
-2.5 |
% |
|
|
1,515.6 |
|
40.6 |
% |
|
|
1,436.1 |
|
40.7 |
% |
5.5 |
% |
4.7 |
% |
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gypsum, Roofing &
Insulation |
|
125.8 |
|
6.5 |
% |
|
|
138.4 |
|
7.3 |
% |
-9.1 |
% |
-9.3 |
% |
|
|
236.6 |
|
6.3 |
% |
|
|
259.3 |
|
7.3 |
% |
-8.8 |
% |
-9.5 |
% |
-9.6 |
% |
Siding, Metal & Concrete
Products |
|
200.6 |
|
10.3 |
% |
|
|
191.3 |
|
10.0 |
% |
4.9 |
% |
2.6 |
% |
|
|
369.5 |
|
9.9 |
% |
|
|
341.2 |
|
9.6 |
% |
8.3 |
% |
7.4 |
% |
4.8 |
% |
Other |
|
227.3 |
|
11.6 |
% |
|
|
208.0 |
|
10.9 |
% |
9.3 |
% |
1.6 |
% |
|
|
436.3 |
|
11.7 |
% |
|
|
380.0 |
|
10.7 |
% |
14.8 |
% |
13.9 |
% |
3.7 |
% |
Specialized Products & Other |
|
553.7 |
|
28.4 |
% |
|
|
537.7 |
|
28.2 |
% |
3.0 |
% |
-0.8 |
% |
|
|
1,042.4 |
|
27.9 |
% |
|
|
980.5 |
|
27.6 |
% |
6.3 |
% |
5.5 |
% |
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lumber & Lumber Sheet
Goods |
$ |
622.1 |
|
32.0 |
% |
|
$ |
601.5 |
|
31.6 |
% |
3.4 |
% |
-2.9 |
% |
|
$ |
1,174.7 |
|
31.5 |
% |
|
$ |
1,119.2 |
|
31.7 |
% |
5.0 |
% |
4.1 |
% |
-0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted net sales |
$ |
1,945.6 |
|
100.0 |
% |
|
$ |
1,904.5 |
|
100.0 |
% |
2.2 |
% |
-2.1 |
% |
|
$ |
3,732.7 |
|
100.0 |
% |
|
$ |
3,535.8 |
|
100.0 |
% |
5.6 |
% |
4.7 |
% |
0.6 |
% |
(1) Core Organic
Growth excludes acquisitions, commodity price fluctuations and
differences in selling days between periods. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES |
Interest Reconciliation |
(unaudited) |
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
June 30, |
|
|
June 30, |
|
|
2020 |
|
|
2020 |
|
Interest Expense |
|
Interest Expense |
|
Net Debt Outstanding |
|
(in millions) |
|
(in millions) |
2030 Secured Notes @ 5% |
$ |
6.9 |
|
|
$ |
10.6 |
|
|
$ |
550.0 |
|
2027 Secured Notes @ 6.75% |
|
11.6 |
|
|
|
19.3 |
|
|
|
777.5 |
|
2024 Secured Notes @ 5.625% |
|
- |
|
|
|
3.9 |
|
|
|
- |
|
2024 Term Loan @ 4.5% Floating LIBOR |
|
0.6 |
|
|
|
1.2 |
|
|
|
52.0 |
|
Revolving Credit Facility @ 3.8% Floating LIBOR |
|
1.7 |
|
|
|
3.6 |
|
|
|
- |
|
Amortization of debt issuance costs, discount and premium |
|
0.9 |
|
|
|
1.6 |
|
|
|
- |
|
Finance leases and other finance obligations |
|
5.2 |
|
|
|
10.5 |
|
|
|
243.0 |
|
Loss on debt extinguishment |
|
- |
|
|
|
28.0 |
|
|
|
- |
|
Other |
|
(0.1 |
) |
|
|
- |
|
|
|
0.0 |
|
Cash |
|
- |
|
|
|
- |
|
|
|
(385.5 |
) |
Total |
$ |
26.8 |
|
|
$ |
78.7 |
|
|
$ |
1,237.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
|
2020 |
|
|
|
2020 |
|
|
|
Free Cash
Flow |
(in millions) |
|
(in millions) |
|
|
Operating activities |
$ |
221 |
|
|
$ |
170 |
|
|
|
Less: Capital expenditures |
|
(26 |
) |
|
|
(55 |
) |
|
|
Free Cash Flow |
$ |
194 |
|
|
$ |
115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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