Builders FirstSource, Inc. (Nasdaq: BLDR)
today reported its results for the fourth quarter ending December
31, 2018.
Commenting on the results, CEO Chad Crow remarked, “We generated
strong financial results in 2018, delivering record sales, Adjusted
EBITDA and net income despite a volatile market. We continued to
show double-digit growth in value-added products, partnering with
our customers in joint efforts to reduce construction costs and
help mitigate labor shortages. Our team also made significant
progress on our operational excellence initiatives, driving towards
a more agile and efficient operating platform. I am particularly
proud of our free cash flow generation as we achieved net financial
debt to Adjusted EBITDA of 3.1x, fulfilling the last strategic
milestone of the 2015 ProBuild acquisition.”
Peter Jackson, CFO, added, “We finished the year with a strong
fourth quarter, in which we grew our single family customer segment
by 4.5 percent, faster than the single family end market. Our
fourth quarter Adjusted EBITDA grew by 29 percent, or $28.1
million, to generate full year Adjusted EBITDA of $502 million. We
improved our 2018 Adjusted EBITDA margin by 50 basis points and
Adjusted net income by more than 50 percent. Our team’s focus on
cash and working capital conversion initiatives, generated an
impressive $186 million in free cash flow for the full year after
funding $101 million in capital investments.”
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.
Fourth Quarter 2018 Compared to Fourth Quarter 2017:
Net Sales
- Net sales for the fourth quarter ending December 31, 2018 were
$1.8 billion, a 2.1 percent increase compared to a year ago. The
Company had one additional sales day in the fourth quarter of 2018
compared to the fourth quarter of 2017. Estimated sales unit volume
per day grew at 3.3 percent in the quarter, partially offset by
approximately 2.8 percent from the impact of commodity deflation,
which resulted in sales per day growth of 0.5 percent. Estimated
sales unit volume per day, excluding commodity inflation, grew
approximately 4.5 percent in the single-family homebuilding end
market and 1.1 percent in the repair and remodeling/other end
market while the multi-family end market declined by 1.8 percent as
expected. Additionally, value-added products sales per day grew by
6.8 percent, including 4.7 percent in the windows, doors, and
millwork category and 9.1 percent in manufactured products.
Gross Margin
- Gross margin of $492.8 million in the fourth quarter of 2018
increased by $61.6 million, or 14.3 percent, over the prior year.
Gross margin percentage was 27.1 percent, an increase of
approximately 290 basis points compared to the fourth quarter of
2017 and an increase of 240 basis points over the third quarter of
2018. The margin percentage increase was attributable to the sharp
decline in the cost of commodities during the quarter, relative to
our short-term customer pricing commitments, combined with
continued pricing discipline and growth in value-added
products.
- Rapid commodity inflation or deflation can cause short-term
gross margin percentage fluctuations, whereas higher or lower
sustained commodity prices will increase or decrease, respectively,
the Company’s net sales, gross margin and Adjusted EBITDA
dollars.
Selling, General and Administrative Expenses
- SG&A in the fourth quarter of 2018 was $402.3 million, or
22.2 percent of sales, compared to $366.4 million, or 20.6 percent
of sales, in the fourth quarter of 2017. The increase of
approximately $35.9 million was mainly due to higher variable
costs, including compensation related to the improved performance.
As a percentage of sales, SG&A increased by 1.6 percent as
fixed cost leverage was offset by increased commissions and
incentives related to the high margins achieved in the fourth
quarter.
Interest Expense
- Interest expense in the fourth quarter of 2018 was $23.4
million compared to $89.5 million in the same period last year.
Adjusting for the $56.3 million one-time premium paid to redeem
notes in the fourth quarter of 2017, interest expense declined by
$6.6 million. The year over year reduction is largely a result of a
gain on debt extinguishment in the amount of $3.2 million and the
opportunistic refinancing transactions the Company executed in
2017, slightly offset by rising interest rates impacting the
floating rate instruments. The debt extinguishment executed in the
fourth quarter of 2018 consisted of a series of open market
purchases of $53.6 million in aggregate principal amount of 2024
notes. In February 2019, an additional $20.4 million in aggregate
principal amount of the same notes was repurchased.
Income Tax Expense
- GAAP income tax expense in the fourth quarter of 2018 was $15.0
million compared to income tax expense of $18.0 million in the
fourth quarter of 2017. The effective tax rate for the fourth
quarter is approximately 22.4 percent.
Net Income
- Net income for the fourth quarter of 2018 was $52.0 million, or
$0.45 per diluted share, compared to a net loss of ($42.7) million,
or ($0.38) per diluted share, for the fourth quarter of 2017 due to
the improved operating results in the fourth quarter of 2018 and
the one-time premium paid related to the refinancing transactions
in the prior year.
- Adjusted net income was $53.1 million, or $0.46 per diluted
share, compared to $46.6 million, or $0.40 per diluted share, in
the fourth quarter of 2017. The year over year increase of $6.5
million, or 14.0 percent, was primarily driven by improved
operating results and lower interest expense.
Adjusted EBITDA
- Fourth quarter Adjusted EBITDA grew $28.1 million to $125.0
million compared to $96.9 million in the period a year ago, an
increase of 29.0 percent. The year over year improvement was
largely driven by the increase in sales, particularly in the
value-added product categories, and the Company’s expanded gross
margin percentage. As a result, Adjusted EBITDA improved to 6.9
percent of sales in the fourth quarter from 5.4 percent in the same
period a year ago.
Full Year December 31, 2018 Financial Information:
Net Sales
- Net sales for the full year 2018 were $7.7 billion, a 9.8
percent increase over the prior year comprised of an estimated
sales unit volume growth of 3.2 percent and approximately 6.6
percent of commodity price inflation. Single-family and repair and
remodel / other end market sales unit volume growth in 2018 was
partially offset by expected declines in the multi-family end
markets. Additionally, value-added products grew by 10.5
percent.
Gross margin
- Gross margin increased for the full year 2018 by $195.5 million
to $1,922.9 million. Gross margin percentage increased to 24.9
percent from 24.6 percent in 2017, a 30 basis point increase. The
pressure experienced on gross margin percentage during the first
half of 2018, due to rising commodity costs relative to our
customer pricing commitments, was more than offset by the sharp
decline in commodity costs during the second half of the year.
- Rapid commodity inflation or deflation can cause short-term
gross margin percentage fluctuations, whereas higher or lower
sustained commodity prices will over time increase or decrease,
respectively, the Company’s sales, gross margin and Adjusted EBITDA
dollars.
Interest Expense
- Interest expense was $108.2 million in 2018, a decrease of
$85.0 million from 2017. This decrease, which is largely
attributable to the capital management strategy executed in both
2018 and 2017, was partially offset by increased interest expense
due to increased market interest rates on our floating rate debt
instruments. Interest expense for the year ended December 31, 2018
included a $3.2 million gain on debt extinguishment. Excluding the
one-time charges of $58.7 million related to the debt transactions
executed in 2017, interest expense decreased by $26.3 million.
Net Income
- Net income for the full year 2018 was $205.2 million, or $1.76
per diluted share, compared to $38.8 million, or $0.34 per diluted
share, in 2017, an increase of $1.42 per diluted share driven by
improved operating results for the full year 2018 and the one-time
costs related to the refinancing transactions in the prior
year.
- Adjusted net income for the full year 2018 was $221.2 million,
or $1.90 per diluted share, compared to $147.2 million, or $1.27
per diluted share, for the full year 2017, an increase of $0.63 per
diluted share. The year over year increase of $74.0 million,
or 50.3 percent, was primarily driven by the Company’s sales
growth, improved margin and lower interest expense.
Adjusted EBITDA
- Adjusted EBITDA for the full year 2018 grew $82.6 million to
$501.6 million, or 6.5 percent of sales, compared to $419.0
million, or 6.0 percent of sales, for the prior year. The year over
year improvement was attributable to cost leverage and the growth
in higher margin value-added products partially offset by an
increase in variable costs including sales commissions and
incentives related to the profitable growth in 2018.
Capital Structure, Leverage, and Liquidity Information:
- Net debt as of December 31, 2018 declined by $179 million to
$1,567 million as compared to the prior year end. The Company
decreased its leverage ratio versus December 31, 2017 by 1.1x, to
3.1x net debt / Adjusted EBITDA, achieving a goal announced in 2015
to manage the balance sheet leverage ratio between 2.5x and
3.5x.
- Due to the substantial conversion of working capital during the
fourth quarter, net cash generated in operations and investing was
$186.2 million for the full year 2018, achieving the guidance to
generate $170 – 190 million for the full year 2018. Cash used in
investing activities was $96.6 million in 2018 mainly related to
facility improvements to expand the Company’s manufacturing
capacity and purchase of rolling stock in support of the Company’s
sales growth.
- Liquidity as of December 31, 2018 was $595.4 million, consisted
of net borrowing availability under the revolving credit facility
and cash on hand.
- In February of 2019, the Company’s Board of Directors
authorized the repurchase of up to $20 million in common stock. We
may repurchase shares primarily to offset dilution associated with
the Company’s stock incentive plans and other compensation
programs. The repurchase plan may also be used for other
transactions or for other corporate purposes, if deemed necessary.
The program may be suspended or terminated at any time.
Please refer to the accompanying financial schedules for more
information.
Outlook
Concluding, Mr. Crow added, “I am very pleased with the
performance our team delivered in 2018 by focusing on exceptional
customer service and disciplined execution. As overall market
growth moderated, we managed to produce solid growth driven by our
differentiated platform in the single family end market, delivered
on our long-term strategic priority of deleveraging, and
demonstrated the strength of our close customer relationships
across our national footprint. I am confident that we will continue
to deliver strong results from our strategic initiatives in high
margin value-added products and operational excellence programs. I
thank our team members who worked relentlessly throughout the year
to build a more durable, value-added solutions platform that
creates enhanced value for our customers, shareholders and other
stakeholders and look forward to 2019 as we continue to build on
our success.”
Conference CallBuilders FirstSource will host a conference call
Friday, March 1, 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 prior to the call. To participate in the
teleconference, please dial into the call a few minutes before the
start time: 888-220-8451 (U.S. and Canada) and 323-794-2588
(international), Conference ID: 3163178. A replay of the call
will be available at 1:00 p.m. Central Time through March
1st. To access the replay, please dial
888-203-1112 (U.S. and Canada) and 719-457-0820 (international) and
refer to pass code 3163178. 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 FirstSource
2018 Sales: $7.7 Billion | Associates: 15
Thousand | Operations in 39 States
Headquartered 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 39 states with approximately 400 locations and have a
market presence in 75 of the top 100 Metropolitan Statistical
Areas, providing geographic diversity and balanced end market
exposure. We service customers from strategically located
distribution facilities and manufacturing facilities (some 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
SUBSIDIARIES |
CONSOLIDATED STATEMENT OF OPERATIONS AND
COMPREHENSIVE INCOME |
|
|
|
|
Three Months EndedDecember
31, |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
(In thousands, except per share
amounts) |
|
Sales |
$ |
1,815,980 |
|
|
$ |
1,778,939 |
|
Cost of sales |
|
1,323,201 |
|
|
|
1,347,719 |
|
Gross
margin |
|
492,779 |
|
|
|
431,220 |
|
Selling, general and
administrative expenses |
|
402,302 |
|
|
|
366,419 |
|
Income
from operations |
|
90,477 |
|
|
|
64,801 |
|
Interest expense,
net |
|
23,408 |
|
|
|
89,471 |
|
Income
(loss) before income taxes |
|
67,069 |
|
|
|
(24,670 |
) |
Income tax expense |
|
15,048 |
|
|
|
18,031 |
|
Net
income (loss) |
$ |
52,021 |
|
|
$ |
(42,701 |
) |
Comprehensive income (loss) |
$ |
52,021 |
|
|
$ |
(42,701 |
) |
Net income (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.45 |
|
|
$ |
(0.38 |
) |
Diluted |
$ |
0.45 |
|
|
$ |
(0.38 |
) |
Weighted average common
shares: |
|
|
|
|
|
|
|
Basic |
|
114,898 |
|
|
|
113,239 |
|
Diluted |
|
116,375 |
|
|
|
113,239 |
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENT OF OPERATIONS AND
COMPREHENSIVE INCOME |
|
|
|
|
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share
amounts) |
|
Sales |
|
$ |
7,724,771 |
|
|
$ |
7,034,209 |
|
|
$ |
6,367,284 |
|
Cost of sales |
|
|
5,801,831 |
|
|
|
5,306,818 |
|
|
|
4,770,536 |
|
Gross
margin |
|
|
1,922,940 |
|
|
|
1,727,391 |
|
|
|
1,596,748 |
|
Selling, general and
administrative expenses |
|
|
1,553,972 |
|
|
|
1,442,288 |
|
|
|
1,360,412 |
|
Income
from operations |
|
|
368,968 |
|
|
|
285,103 |
|
|
|
236,336 |
|
Interest expense,
net |
|
|
108,213 |
|
|
|
193,174 |
|
|
|
214,667 |
|
Income
before income taxes |
|
|
260,755 |
|
|
|
91,929 |
|
|
|
21,669 |
|
Income tax expense
(benefit) |
|
|
55,564 |
|
|
|
53,148 |
|
|
|
(122,672 |
) |
Net
income |
|
$ |
205,191 |
|
|
$ |
38,781 |
|
|
$ |
144,341 |
|
Comprehensive income |
|
$ |
205,191 |
|
|
$ |
38,781 |
|
|
$ |
144,341 |
|
Net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.79 |
|
|
$ |
0.34 |
|
|
$ |
1.30 |
|
Diluted |
|
$ |
1.76 |
|
|
$ |
0.34 |
|
|
$ |
1.27 |
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
114,586 |
|
|
|
112,587 |
|
|
|
110,754 |
|
Diluted |
|
|
116,554 |
|
|
|
115,597 |
|
|
|
113,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEET |
|
|
|
|
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts) |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
10,127 |
|
|
$ |
57,533 |
|
Accounts
receivable, less allowances of $13,054 and $11,771 at December 31,
2018 and 2017, respectively |
|
|
654,170 |
|
|
|
631,992 |
|
Other
receivables |
|
|
68,637 |
|
|
|
71,232 |
|
Inventories, net |
|
|
596,896 |
|
|
|
601,547 |
|
Other
current assets |
|
|
43,921 |
|
|
|
33,564 |
|
Total
current assets |
|
|
1,373,751 |
|
|
|
1,395,868 |
|
Property, plant and
equipment, net |
|
|
670,075 |
|
|
|
639,303 |
|
Goodwill |
|
|
740,411 |
|
|
|
740,411 |
|
Intangible assets,
net |
|
|
103,154 |
|
|
|
132,567 |
|
Deferred income
taxes |
|
|
22,766 |
|
|
|
75,105 |
|
Other assets, net |
|
|
22,152 |
|
|
|
22,870 |
|
Total
assets |
|
$ |
2,932,309 |
|
|
$ |
3,006,124 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
423,168 |
|
|
|
514,282 |
|
Accrued
liabilities |
|
|
292,526 |
|
|
|
271,597 |
|
Current
maturities of long-term debt and lease obligations |
|
|
15,565 |
|
|
|
12,475 |
|
Total
current liabilities |
|
|
731,259 |
|
|
|
798,354 |
|
Long-term debt and
lease obligations, net of current maturities, debt discount, and
debt issuance costs |
|
|
1,545,729 |
|
|
|
1,771,945 |
|
Other long-term
liabilities |
|
|
58,983 |
|
|
|
59,616 |
|
Total
liabilities |
|
|
2,335,971 |
|
|
|
2,629,915 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Preferred
stock, $0.01 par value, 10,000 shares authorized; zero
shares issued and outstanding at December 31, 2018 and
2017 |
|
|
— |
|
|
|
— |
|
Common
stock, $0.01 par value, 200,000 shares authorized;
115,078 and 113,572 shares issued and outstanding at
December 31, 2018 and 2017, respectively |
|
|
1,151 |
|
|
|
1,136 |
|
Additional paid-in capital |
|
|
560,221 |
|
|
|
546,766 |
|
Retained
earnings (accumulated deficit) |
|
|
34,966 |
|
|
|
(171,693 |
) |
Total
stockholders’ equity |
|
|
596,338 |
|
|
|
376,209 |
|
Total
liabilities and stockholders’ equity |
|
$ |
2,932,309 |
|
|
$ |
3,006,124 |
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
205,191 |
|
|
$ |
38,781 |
|
|
$ |
144,341 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
97,906 |
|
|
|
92,993 |
|
|
|
109,793 |
|
Amortization and write-off of debt issuance costs and debt
discount |
|
|
4,642 |
|
|
|
6,092 |
|
|
|
7,502 |
|
(Gain)
loss on extinguishment of debt |
|
|
(3,170 |
) |
|
|
56,657 |
|
|
|
55,776 |
|
Payment
of original issue discount |
|
|
— |
|
|
|
— |
|
|
|
(1,259 |
) |
Deferred
income taxes |
|
|
51,823 |
|
|
|
49,104 |
|
|
|
(124,787 |
) |
Stock
compensation expense |
|
|
14,420 |
|
|
|
13,508 |
|
|
|
10,549 |
|
Net
(gain) loss on sales of assets and asset impairments |
|
|
(1,393 |
) |
|
|
6,965 |
|
|
|
(336 |
) |
Changes
in assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Receivables |
|
|
(9,221 |
) |
|
|
(75,673 |
) |
|
|
(44,552 |
) |
Inventories |
|
|
(5,425 |
) |
|
|
(60,645 |
) |
|
|
(33,965 |
) |
Other
current assets |
|
|
(10,356 |
) |
|
|
8 |
|
|
|
(4,873 |
) |
Other
assets and liabilities |
|
|
5,637 |
|
|
|
8,315 |
|
|
|
(828 |
) |
Accounts
payable |
|
|
(89,392 |
) |
|
|
65,764 |
|
|
|
36,585 |
|
Accrued
liabilities |
|
|
22,168 |
|
|
|
(23,341 |
) |
|
|
4,281 |
|
Net cash
provided by operating activities |
|
|
282,830 |
|
|
|
178,528 |
|
|
|
158,227 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
|
(101,411 |
) |
|
|
(62,407 |
) |
|
|
(42,662 |
) |
Proceeds
from sale of property, plant and equipment |
|
|
4,753 |
|
|
|
2,981 |
|
|
|
8,305 |
|
Cash used
for acquisitions, net |
|
|
— |
|
|
|
— |
|
|
|
(3,970 |
) |
Net cash
used in investing activities |
|
|
(96,658 |
) |
|
|
(59,426 |
) |
|
|
(38,327 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility |
|
|
1,662,000 |
|
|
|
1,370,000 |
|
|
|
907,000 |
|
Payments
under revolving credit facility |
|
|
(1,833,000 |
) |
|
|
(1,020,000 |
) |
|
|
(967,000 |
) |
Proceeds
from issuance of notes |
|
|
— |
|
|
|
— |
|
|
|
750,000 |
|
Repayments of long-term debt and other loans |
|
|
(65,312 |
) |
|
|
(379,926 |
) |
|
|
(807,517 |
) |
Proceeds
from long-term debt and other loans |
|
|
3,818 |
|
|
|
— |
|
|
|
— |
|
Payments
of debt extinguishment costs |
|
|
(134 |
) |
|
|
(48,704 |
) |
|
|
(42,869 |
) |
Payments
of loan costs |
|
|
— |
|
|
|
(2,799 |
) |
|
|
(15,663 |
) |
Exercise
of stock options |
|
|
3,945 |
|
|
|
8,055 |
|
|
|
6,627 |
|
Repurchase of common stock |
|
|
(4,895 |
) |
|
|
(2,644 |
) |
|
|
(1,092 |
) |
Net cash
used in financing activities |
|
|
(233,578 |
) |
|
|
(76,018 |
) |
|
|
(170,514 |
) |
Net (decrease) increase
in cash and cash equivalents |
|
|
(47,406 |
) |
|
|
43,084 |
|
|
|
(50,614 |
) |
Cash and cash
equivalents at beginning of period |
|
|
57,533 |
|
|
|
14,449 |
|
|
|
65,063 |
|
Cash and cash
equivalents at end of period |
|
$ |
10,127 |
|
|
$ |
57,533 |
|
|
$ |
14,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash activities
For the years ended December 31, 2018, 2017 and 2016, the
Company retired assets subject to other finance obligations of $0.6
million, $14.0 million and $38.1 million and extinguished the
related other finance obligations of $0.7 million $11.7 million and
$41.2 million, respectively.
The Company purchased equipment which was financed through
capital lease obligations of $10.2 million, $14.2 million and $8.1
million in the years ended December 31, 2018, 2017 and 2016,
respectively. In addition, purchases of property, plant and
equipment included in accounts payable were $2.4 million, $3.9
million and $1.8 million for the years ended December 31, 2018,
2017 and 2016, 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 SEC on
February 28, 2019. |
|
|
|
|
|
|
|
Three months ended December
31, |
|
Twelve months ended December
31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
(in millions) |
|
(in millions) |
Reconciliation
to Adjusted EBITDA: |
|
|
|
|
|
|
|
GAAP Net Income |
$ |
52.0 |
|
|
$ |
(42.7 |
) |
|
$ |
205.2 |
|
|
$ |
38.8 |
|
Integration related
expenses |
|
4.3 |
|
|
|
4.0 |
|
|
|
19.2 |
|
|
|
20.7 |
|
Debt issuance and
refinancing cost (1) |
|
(3.2 |
) |
|
|
56.3 |
|
|
|
(3.2 |
) |
|
|
58.7 |
|
Revaluation of NOL
(2) |
|
- |
|
|
|
29.0 |
|
|
|
- |
|
|
|
29.0 |
|
Adjusted Net
Income |
|
53.1 |
|
|
|
46.6 |
|
|
|
221.2 |
|
|
|
147.2 |
|
Weighted average
diluted common shares (in millions) |
|
116.4 |
|
|
|
116.5 |
|
|
|
116.6 |
|
|
|
115.6 |
|
Diluted adjusted net
income per share: |
$ |
0.46 |
|
|
$ |
0.40 |
|
|
$ |
1.90 |
|
|
$ |
1.27 |
|
Reconciling items: |
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
25.2 |
|
|
|
22.2 |
|
|
|
97.9 |
|
|
|
93.0 |
|
Interest
expense, net |
|
26.6 |
|
|
|
33.2 |
|
|
|
111.4 |
|
|
|
134.5 |
|
Income
tax (benefit) expense |
|
15.0 |
|
|
|
(11.0 |
) |
|
|
55.6 |
|
|
|
24.1 |
|
Stock
compensation expense |
|
4.5 |
|
|
|
3.6 |
|
|
|
14.4 |
|
|
|
13.5 |
|
(Gain)/loss on sale and asset impairments |
|
(0.9 |
) |
|
|
1.9 |
|
|
|
(1.0 |
) |
|
|
6.3 |
|
Other
management-identified adjustments (3) |
|
1.5 |
|
|
|
0.4 |
|
|
|
2.1 |
|
|
|
0.4 |
|
Adjusted
EBITDA |
$ |
125.0 |
|
|
$ |
96.9 |
|
|
$ |
501.6 |
|
|
$ |
419.0 |
|
Adjusted
EBITDA Margin |
|
6.9 |
% |
|
|
5.4 |
% |
|
|
6.5 |
% |
|
|
6.0 |
% |
|
|
|
|
|
|
|
(1) Gain
or loss associated with refinancing long term debt. |
(2) In
2017, the company revalued its NOL tax asset given the tax reform
that allows for a lower federal corporate tax rate. |
(3)
Primarily relates to severance and one time cost. |
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
Financial Data |
(adjusted and unaudited) |
|
|
|
|
|
|
|
|
|
Three months ended December
31, |
|
Twelve months ended December
31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
(in millions except per share amounts) |
Net sales |
|
1,816.0 |
|
|
|
1,778.9 |
|
|
|
7,724.8 |
|
|
|
7,034.2 |
|
Gross
margin |
|
492.8 |
|
|
|
431.2 |
|
|
|
1,922.9 |
|
|
|
1,727.4 |
|
Gross
margin % |
|
27.1 |
% |
|
|
24.2 |
% |
|
|
24.9 |
% |
|
|
24.6 |
% |
Adjusted
SG&A/Other (excluding depreciation and amortization) as a % of
sales (1) |
|
20.3 |
% |
|
|
18.8 |
% |
|
|
18.4 |
% |
|
|
18.6 |
% |
Adjusted EBITDA |
|
125.0 |
|
|
|
96.9 |
|
|
|
501.6 |
|
|
|
419.0 |
|
Adjusted
EBITDA margin % |
|
6.9 |
% |
|
|
5.4 |
% |
|
|
6.5 |
% |
|
|
6.0 |
% |
Depreciation and
amortization |
|
(25.2 |
) |
|
|
(22.2 |
) |
|
|
(97.9 |
) |
|
|
(93.0 |
) |
Interest expense, net
of debt issuance cost and refinancing |
|
(26.6 |
) |
|
|
(33.2 |
) |
|
|
(111.4 |
) |
|
|
(134.5 |
) |
Income tax expense |
|
(15.0 |
) |
|
|
11.0 |
|
|
|
(55.6 |
) |
|
|
(24.1 |
) |
Other adjustments |
|
(5.1 |
) |
|
|
(5.9 |
) |
|
|
(15.5 |
) |
|
|
(20.2 |
) |
Adjusted
Net Income |
$ |
53.1 |
|
|
$ |
46.6 |
|
|
$ |
221.2 |
|
|
$ |
147.2 |
|
Basic adjusted net
income per share: |
$ |
0.46 |
|
|
$ |
0.41 |
|
|
$ |
1.93 |
|
|
$ |
1.31 |
|
Diluted adjusted net
income per share: |
$ |
0.46 |
|
|
$ |
0.40 |
|
|
$ |
1.90 |
|
|
$ |
1.27 |
|
Weighted average common
shares (in millions) |
|
|
|
|
|
|
|
Basic |
|
114.9 |
|
|
|
113.2 |
|
|
|
114.6 |
|
|
|
112.6 |
|
Diluted |
|
116.4 |
|
|
|
116.5 |
|
|
|
116.6 |
|
|
|
115.6 |
|
|
|
|
|
|
|
|
|
Note: The company provided detailed explanations of these
non-GAAP financial measures in its Form 8-K filed with the SEC on
February 28, 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 Q4-18 of $402.3M less $25.2M depreciation and
amortization, less $4.3M of integration expenses, less $4.5M of
stock comp and $0.6M loss from sales, impairments, and other.
GAAP SG&A in FY18 of $1,554.0M less $97.9M depreciation and
amortization, less $19.2M of integration expenses, less $14.4M
of stock comp and $1.1M loss from sales, impairments, and
other. |
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
Sales by Product
Category |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31, |
|
|
Twelve months ended December
31, |
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
|
Net Sales |
|
% of NetSales |
|
Net Sales |
|
% of NetSales |
%
Change |
|
Net Sales |
|
% of NetSales |
|
Net Sales |
|
% of NetSales |
%
Change |
Lumber & Lumber
Sheet Goods |
$ |
628.4 |
|
34.6 |
% |
|
$ |
643.3 |
|
36.2 |
% |
-2.3 |
% |
|
$ |
2,902.2 |
|
37.6 |
% |
|
$ |
2,510.9 |
|
35.7 |
% |
15.6 |
% |
Manufactured
Products |
|
341.1 |
|
18.8 |
% |
|
|
307.7 |
|
17.3 |
% |
10.9 |
% |
|
|
1,392.0 |
|
18.0 |
% |
|
|
1,208.5 |
|
17.2 |
% |
15.2 |
% |
Windows, Doors &
Millwork |
|
365.7 |
|
20.1 |
% |
|
|
343.9 |
|
19.3 |
% |
6.4 |
% |
|
|
1,445.9 |
|
18.7 |
% |
|
|
1,360.6 |
|
19.4 |
% |
6.3 |
% |
Gypsum, Roofing &
Insulation |
|
127.6 |
|
7.0 |
% |
|
|
129.0 |
|
7.2 |
% |
-1.0 |
% |
|
|
528.4 |
|
6.9 |
% |
|
|
538.4 |
|
7.6 |
% |
-1.8 |
% |
Siding, Metal &
Concrete Products |
|
169.4 |
|
9.3 |
% |
|
|
157.0 |
|
8.8 |
% |
8.0 |
% |
|
|
697.8 |
|
9.0 |
% |
|
|
655.9 |
|
9.3 |
% |
6.4 |
% |
Other |
|
183.7 |
|
10.1 |
% |
|
|
198.1 |
|
11.1 |
% |
-7.3 |
% |
|
|
758.5 |
|
9.8 |
% |
|
|
759.9 |
|
10.8 |
% |
-0.2 |
% |
Total
adjusted net sales |
$ |
1,816.0 |
|
100.0 |
% |
|
$ |
1,779.0 |
|
100.0 |
% |
2.1 |
% |
|
$ |
7,724.8 |
|
100.0 |
% |
|
$ |
7,034.2 |
|
100.0 |
% |
9.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
Interest Reconciliation |
(unaudited) |
|
|
|
|
|
Three months ended December
31, |
|
Interest Expense |
|
Net DebtOutstanding |
|
|
|
|
|
(in millions) |
2024 Secured Notes @
5.625% Fixed |
$ |
10.2 |
|
|
$ |
696.4 |
|
2024 Term Loan @ 5.2%
(Floating LIBOR) |
|
6.3 |
|
|
|
458.3 |
|
Revolving Credit
Facility @ 3.9% (Floating LIBOR) |
|
3.4 |
|
|
|
179.0 |
|
Amortization of
deferred loan costs and debt discount |
|
1.3 |
|
|
|
Other finance
obligations and capital leases |
|
5.3 |
|
|
|
243.5 |
|
Gain on debt
extinguishment |
|
(3.2 |
) |
|
|
Other |
|
0.1 |
|
|
|
Cash |
|
|
|
(10.1 |
) |
Total |
$ |
23.4 |
|
|
$ |
1,567.0 |
|
|
|
|
|
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