Disciplined execution delivers strong
margin, profitable growth and increased cash flow
Builders FirstSource, Inc. (Nasdaq: BLDR)
today reported its results for the third quarter ending September
30, 2018.
Commenting on the results, CEO Chad Crow remarked, “In the third
quarter, we delivered sales growth of 12.7 percent to $2.1 billion,
with our higher margin value added products again growing by double
digits. I am pleased to report that Adjusted EBITDA increased by 27
percent to $155 million, a strong performance in a volatile
commodity environment. We continued to invest in our manufacturing
capacity and efficiency enhancing initiatives to further strengthen
and differentiate our platform and the value-added solutions we
provide our customers.”
Peter Jackson, CFO, added, “The growth in Adjusted EBITDA
dollars, and the improvement in EBITDA margin, reflected our
ability to successfully manage the volatility in commodity costs
during the quarter as well as realize cost efficiencies on a
sustained basis. We generated solid cash flow in the third quarter
and remain on track to delever below 3.5x by year end while
continuing to fund our strategic initiatives and drive profitable
growth.”
The Company has provided supplemental non-GAAP financial
information of the consolidated company that is adjusted to exclude
one-time integration and other 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.
Third Quarter 2018 Compared to Third Quarter 2017:
Net Sales
- Net sales for the third quarter ending September 30, 2018 were
$2.1 billion, a 12.7 percent increase compared to a year ago.
Estimated sales volume grew 1.5 percent, while price increases
related to commodity inflation resulted in an additional 11.2
percent in sales growth compared to the third quarter of 2017.
Excluding commodity inflation, the single family homebuilding end
market grew an estimated 3.1 percent while the multi-family end
market was up 0.5 percent, offset by a 2.6 percent decline in the
repair and remodel / other end market. Value added products sales,
including the windows, doors and millwork, and manufactured
products categories, grew by $92 million, or 13.9 percent, during
the quarter.
Gross Margin
Gross margin of $522.8 million in the third quarter of 2018
increased by $63.5 million, or 13.8 percent, over the prior year.
Gross margin percentage was 24.7 percent, an increase of
approximately 0.3 percent compared to the third quarter of 2017 and
an increase of 1 percent over the second quarter of 2018. The
margin percentage increased largely due to the decline in the cost
of commodities during the quarter relative to our short term
customer pricing commitments.
Selling, General and Administrative Expenses
- SG&A in the third quarter of 2018 was $401.0 million, or
18.9 percent of sales, compared to $370.6 million, or 19.7 percent
of sales in the third quarter of 2017. The increase of
approximately $30 million was largely due to higher variable
compensation related to the improvement in performance, including
higher commissions and incentives. As a percentage of sales,
SG&A decreased by 80 basis points primarily due to cost
leverage as well as continued cost management focused on general
and administrative expenses.
Interest Expense
- Interest expense in the third quarter of 2018 was $29.1 million
compared to $33.8 million in the same period last year. The
year over year reduction is largely a result of refinancing
transactions the Company executed in 2017, slightly offset by
rising interest rates.
Income Tax Expense
- GAAP income tax expense in the third quarter of 2018 was $19.4
million compared to income tax expense of $15.1 million in the
third quarter of 2017. The effective tax rate for the third
quarter is approximately 20.9 percent compared to 27.5 percent in
the third quarter of 2017.
Net Income
- Net income for the third quarter of 2018 was $73.3 million, or
$0.63 per diluted share, compared to $39.8 million, or $0.34 per
diluted share, for the third quarter of 2017.
- Adjusted net income was $77.8 million, or $0.67 per diluted
share, compared to $45.4 million, or $0.39 per diluted share, in
the third quarter of 2017. The year over year increase of $32.4
million, or 71.4 percent, was primarily driven by sales growth,
particularly in higher margin value added product categories, as
well as cost management and lower interest expense.
Adjusted EBITDA
- Third quarter Adjusted EBITDA grew $32.8 million to $154.8
million compared to $122.0 million in the period a year ago, an
increase of 26.9 percent. The year over year improvement was
largely driven by sales increases as higher prices, particularly in
lumber and lumber sheet goods, benefited the Company’s gross profit
and Adjusted EBITDA dollars. As a result, Adjusted EBITDA improved
to 7.3 percent of sales in the third quarter from 6.5 percent in
the same period a year ago.
Year to Date September 30, 2018 Financial Information:
Net Sales
- Net sales year to date were $5.9 billion, a 12.4 percent
increase over the first nine months of 2017.
Net Income
- In the first nine months of 2018, net income was $153.2
million, or $1.31 per diluted share, compared to $81.5 million, or
$0.71 per diluted share, in the first nine months of 2017, an
increase of $0.60 per diluted share, or 84.5 percent.
- Adjusted net income was $168.1 million, or $1.44 per diluted
share, compared to $100.6 million, or $0.87 per diluted share, in
the first nine months of 2017, an increase of $0.57 per diluted
share. The year over year increase of $67.5 million, or 67.1
percent, was primarily driven by the Company’s sales growth, cost
efficiencies, and lower interest expense.
Adjusted EBITDA
- Adjusted EBITDA for the first nine months of 2018 grew $54.5
million to $376.6 million, or 6.4 percent of sales, compared to
$322.1 million, or 6.1 percent of sales, for the first nine months
of 2017. The year over year improvement was primarily attributable
to sales growth and ongoing cost management, offset in part by the
impact of commodity inflation on gross margin. The 16.9 percent
growth was achieved as investments in growth and efficiency
initiatives continued, including additional sales associates, new
locations and operational excellence initiatives.
- Although rapid commodity inflation can cause short term gross
margin percentage compression as prices are rising, higher
sustained commodity prices generally benefit the Company’s gross
profit and Adjusted EBITDA dollars.
Capital Structure, Leverage, and Liquidity Information:
- Adjusted EBITDA, on a trailing 12 month basis, was $473.4
million and net debt was $1,824.2 million as of September 30, 2018.
The Company decreased its leverage ratio versus September 30, 2017
by 0.7x, to 3.9x net debt / Adjusted EBITDA despite the higher
commodity costs in its working capital. The Company expects to
reduce its leverage ratio to below 3.5x by year end.
- Due to seasonal working capital needs in the first nine months
of 2018, net cash used in operations and investing was $67.3
million. The Company expects to generate $170 – 190 million
in cash from operations and investing activities for the full year
2018, in line with its full year cash flow guidance.
- Liquidity at September 30, 2018 was $448.2 million, which
consisted of net borrowing availability under the revolving credit
facility and cash on hand.
Please refer to the accompanying financial schedules for more
information.
OutlookConcluding, Mr. Crow added, “While the rate of market
growth has recently eased, the long term outlook for the housing
industry continues to be favorable as do the opportunities for
Builders FirstSource to generate profitable growth for the balance
of 2018 and beyond. We continue to invest in high margin value
added products and operational excellence initiatives that position
us well within the industry. Our associates remain focused on
developing close relationships with our customers across our
national footprint and have demonstrated this commitment in the
third quarter. I want to thank our team for its disciplined
execution and continuing focus on customer value, as well as
delivering strong earnings and cash flow to our
shareholders.”
Conference CallBuilders FirstSource will host a conference call
Friday, November 2, 2018 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 before the call. To participate in the
teleconference, please dial into the call a few minutes before the
start time: 877-260-1479 (U.S. and Canada) and 334-323-0522
(international), Conference ID: 5738521. A replay of the call
will be available at 1:00 p.m. Central Time through November
17th. To access the replay, please dial
888-203-1112 (U.S. and Canada) and 719-457-0820 (international) and
refer to pass code 573821. 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
2017 Sales: $7.0 Billion | Associates:
15 Thousand | Operations in 40 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 40 states with over 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 CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS AND COMPREHENSIVE INCOME
|
Three Months
Ended September 30, |
|
|
Nine Months
Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
(Unaudited)(In thousands, except per share
amounts) |
Sales |
$ |
2,118,467 |
|
|
$ |
1,878,909 |
|
|
$ |
5,908,791 |
|
|
$ |
5,255,270 |
Cost of sales |
|
1,595,686 |
|
|
|
1,419,587 |
|
|
|
4,478,630 |
|
|
|
3,959,099 |
Gross margin |
|
522,781 |
|
|
|
459,322 |
|
|
|
1,430,161 |
|
|
|
1,296,171 |
Selling, general and administrative expenses |
|
400,993 |
|
|
|
370,638 |
|
|
|
1,151,670 |
|
|
|
1,075,869 |
Income from operations |
|
121,788 |
|
|
|
88,684 |
|
|
|
278,491 |
|
|
|
220,302 |
Interest expense, net |
|
29,106 |
|
|
|
33,836 |
|
|
|
84,805 |
|
|
|
103,703 |
Income before income taxes |
|
92,682 |
|
|
|
54,848 |
|
|
|
193,686 |
|
|
|
116,599 |
Income tax expense |
|
19,354 |
|
|
|
15,098 |
|
|
|
40,516 |
|
|
|
35,117 |
Net income |
$ |
73,328 |
|
|
$ |
39,750 |
|
|
$ |
153,170 |
|
|
$ |
81,482 |
Comprehensive income |
$ |
73,328 |
|
|
$ |
39,750 |
|
|
$ |
153,170 |
|
|
$ |
81,482 |
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.64 |
|
|
$ |
0.35 |
|
|
$ |
1.34 |
|
|
$ |
0.73 |
Diluted |
$ |
0.63 |
|
|
$ |
0.34 |
|
|
$ |
1.31 |
|
|
$ |
0.71 |
Weighted average common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
114,707 |
|
|
|
112,688 |
|
|
|
114,480 |
|
|
|
112,368 |
Diluted |
|
116,456 |
|
|
|
115,871 |
|
|
|
116,614 |
|
|
|
115,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEET
|
September
30, 2018 |
|
|
December
31, 2017 |
|
|
|
|
|
(Unaudited)(In
thousands, except per share amounts) |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
34,446 |
|
|
$ |
57,533 |
|
Accounts receivable, less allowances of $13,470 and
$11,771 at September 30, 2018 and December 31, 2017,
respectively |
|
805,317 |
|
|
|
631,992 |
|
Other receivables |
|
59,389 |
|
|
|
71,232 |
|
Inventories, net |
|
679,471 |
|
|
|
601,547 |
|
Other current assets |
|
35,351 |
|
|
|
33,564 |
|
Total current assets |
|
1,613,974 |
|
|
|
1,395,868 |
|
Property, plant and equipment, net |
|
665,732 |
|
|
|
639,303 |
|
Assets held for sale |
|
7,874 |
|
|
|
5,273 |
|
Goodwill |
|
740,411 |
|
|
|
740,411 |
|
Intangible assets, net |
|
111,266 |
|
|
|
132,567 |
|
Deferred income taxes |
|
38,760 |
|
|
|
75,105 |
|
Other assets, net |
|
15,568 |
|
|
|
17,597 |
|
Total assets |
$ |
3,193,585 |
|
|
$ |
3,006,124 |
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Checks outstanding |
$ |
13,531 |
|
|
$ |
— |
|
Accounts payable |
|
487,775 |
|
|
|
514,282 |
|
Accrued liabilities |
|
255,836 |
|
|
|
271,597 |
|
Current maturities of long-term debt and lease
obligations |
|
14,620 |
|
|
|
12,475 |
|
Total current liabilities |
|
771,762 |
|
|
|
798,354 |
|
Long-term debt and lease obligations, net of current maturities,
debt discount and debt issuance costs |
|
1,826,962 |
|
|
|
1,771,945 |
|
Other long-term liabilities |
|
56,546 |
|
|
|
59,616 |
|
Total liabilities |
|
2,655,270 |
|
|
|
2,629,915 |
|
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; 114,725
and 113,572 shares issued and outstanding at September 30,
2018 and December 31, 2017, respectively |
|
1,147 |
|
|
|
1,136 |
|
Additional paid-in capital |
|
554,223 |
|
|
|
546,766 |
|
Accumulated deficit |
|
(17,055 |
) |
|
|
(171,693 |
) |
Total stockholders' equity |
|
538,315 |
|
|
|
376,209 |
|
Total liabilities and stockholders' equity |
$ |
3,193,585 |
|
|
$ |
3,006,124 |
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Nine Months
EndedSeptember 30, |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
(Unaudited)(In thousands) |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net
income |
$ |
153,170 |
|
|
$ |
81,482 |
|
Adjustments to reconcile net income to net cash used in
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
72,691 |
|
|
|
70,796 |
|
Amortization and write-off of debt issuance costs and
debt discount |
|
3,479 |
|
|
|
5,163 |
|
Deferred income taxes |
|
35,829 |
|
|
|
29,060 |
|
Stock compensation expense |
|
9,929 |
|
|
|
9,916 |
|
Net (gain) loss on sale of assets and asset
impairments |
|
(480 |
) |
|
|
5,079 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
Receivables |
|
(151,092 |
) |
|
|
(158,617 |
) |
Inventories |
|
(86,639 |
) |
|
|
(85,313 |
) |
Other current assets |
|
(1,786 |
) |
|
|
2,837 |
|
Other assets and liabilities |
|
1,442 |
|
|
|
3,776 |
|
Accounts payable and checks outstanding |
|
(12,792 |
) |
|
|
71,247 |
|
Accrued liabilities |
|
(14,219 |
) |
|
|
(43,024 |
) |
Net cash provided by (used in) operating
activities |
|
9,532 |
|
|
|
(7,598 |
) |
Cash
flows from investing activities: |
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(78,693 |
) |
|
|
(48,060 |
) |
Proceeds from sale of property, plant and
equipment |
|
1,890 |
|
|
|
4,802 |
|
Net cash used in investing activities |
|
(76,803 |
) |
|
|
(43,258 |
) |
Cash
flows from financing activities: |
|
|
|
|
|
|
|
Borrowings under revolving credit facility |
|
1,243,000 |
|
|
|
894,000 |
|
Repayments under revolving credit facility |
|
(1,189,000 |
) |
|
|
(839,000 |
) |
Repayments of long-term debt and other loans |
|
(11,173 |
) |
|
|
(8,555 |
) |
Proceeds from long-term debt and other loans |
|
3,818 |
|
|
|
— |
|
Payments of loan costs |
|
— |
|
|
|
(2,799 |
) |
Exercise of stock options |
|
2,394 |
|
|
|
4,574 |
|
Repurchase of common stock |
|
(4,855 |
) |
|
|
(2,476 |
) |
Net cash provided by financing activities |
|
44,184 |
|
|
|
45,744 |
|
Net
change in cash and cash equivalents |
|
(23,087 |
) |
|
|
(5,112 |
) |
Cash
and cash equivalents at beginning of period |
|
57,533 |
|
|
|
14,449 |
|
Cash
and cash equivalents at end of period |
$ |
34,446 |
|
|
$ |
9,337 |
|
Supplemental disclosure of non-cash activities
For the nine months ended September 30, 2018 and 2017, the
Company retired assets subject to lease finance obligations of $0.6
million and $15.0 million and extinguished the related lease
finance obligation of $0.7 million and $12.9 million,
respectively.
The Company purchased equipment which was financed through
capital lease obligations of $9.0 million and $14.2 million in the
nine months ended September 30, 2018 and 2017, respectively. In
addition, purchases of property, plant and equipment included in
accounts payable were $2.5 million and $1.0 million for the nine
months ended September 30, 2018 and 2017, 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 November 1, 2018. |
|
|
|
|
|
|
|
|
|
Three months ended September
30, |
|
Nine months ended September
30, |
|
Twelve months ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
(in millions) |
|
|
Reconciliation
to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
GAAP Net Income |
$ |
73.3 |
|
|
$ |
39.7 |
|
|
$ |
153.2 |
|
|
$ |
81.5 |
|
|
$ |
110.5 |
|
Integration related
expenses |
|
4.5 |
|
|
|
5.7 |
|
|
|
14.9 |
|
|
|
16.7 |
|
|
|
18.9 |
|
Debt issuance and
refinancing cost (1) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2.4 |
|
|
|
56.3 |
|
Revaluation of NOL
(2) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29.0 |
|
Adjusted Net
Income |
|
77.8 |
|
|
|
45.4 |
|
|
|
168.1 |
|
|
|
100.6 |
|
|
|
214.7 |
|
Weighted average
diluted common shares (in millions) |
|
116.5 |
|
|
|
115.9 |
|
|
|
116.6 |
|
|
|
115.3 |
|
|
|
Diluted adjusted net
income per share: |
$ |
0.67 |
|
|
$ |
0.39 |
|
|
$ |
1.44 |
|
|
$ |
0.87 |
|
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
25.1 |
|
|
|
23.0 |
|
|
|
72.7 |
|
|
|
70.8 |
|
|
$ |
94.9 |
|
Interest
expense, net |
|
29.1 |
|
|
|
33.8 |
|
|
|
84.8 |
|
|
|
101.3 |
|
|
|
118.0 |
|
Income
tax (benefit) expense |
|
19.4 |
|
|
|
15.1 |
|
|
|
40.5 |
|
|
|
35.1 |
|
|
|
29.5 |
|
Stock
compensation expense |
|
3.5 |
|
|
|
3.5 |
|
|
|
9.9 |
|
|
|
9.9 |
|
|
|
13.5 |
|
(Gain)/loss on sale and asset impairments |
|
(0.2 |
) |
|
|
1.5 |
|
|
|
(0.1 |
) |
|
|
4.4 |
|
|
|
1.8 |
|
Other
management-identified adjustments (3) |
|
0.1 |
|
|
|
(0.3 |
) |
|
|
0.7 |
|
|
|
- |
|
|
|
1.1 |
|
Adjusted
EBITDA |
$ |
154.8 |
|
|
$ |
122.0 |
|
|
$ |
376.6 |
|
|
$ |
322.1 |
|
|
$ |
473.5 |
|
Adjusted
EBITDA Margin |
|
7.3 |
% |
|
|
6.5 |
% |
|
|
6.4 |
% |
|
|
6.1 |
% |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
(1) Cost
associated with refinancing long term debt in 2017. |
(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 September 30, |
|
Nine months
ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
(in millions except per share amounts) |
Net sales |
$ |
2,118.5 |
|
|
$ |
1,878.9 |
|
|
$ |
5,908.8 |
|
|
$ |
5,255.3 |
|
Cost of sales |
|
1,595.7 |
|
|
|
1,419.6 |
|
|
|
4,478.6 |
|
|
|
3,959.1 |
|
Gross
margin |
|
522.8 |
|
|
|
459.3 |
|
|
|
1,430.2 |
|
|
|
1,296.2 |
|
Gross
margin % |
|
24.7 |
% |
|
|
24.4 |
% |
|
|
24.2 |
% |
|
|
24.7 |
% |
Adjusted
SG&A/Other (excluding depreciation and amortization) as a % of
sales (1) |
|
17.4 |
% |
|
|
18.0 |
% |
|
|
17.8 |
% |
|
|
18.5 |
% |
Adjusted EBITDA |
|
154.8 |
|
|
|
122.0 |
|
|
|
376.6 |
|
|
|
322.1 |
|
Adjusted
EBITDA margin % |
|
7.3 |
% |
|
|
6.5 |
% |
|
|
6.4 |
% |
|
|
6.1 |
% |
Depreciation and
amortization |
|
(25.1 |
) |
|
|
(23.0 |
) |
|
|
(72.7 |
) |
|
|
(70.8 |
) |
Interest expense, net
of debt issuance cost and refinancing |
|
(29.1 |
) |
|
|
(33.8 |
) |
|
|
(84.8 |
) |
|
|
(101.3 |
) |
Income tax expense |
|
(19.4 |
) |
|
|
(15.1 |
) |
|
|
(40.5 |
) |
|
|
(35.1 |
) |
Other adjustments |
|
(3.4 |
) |
|
|
(4.7 |
) |
|
|
(10.5 |
) |
|
|
(14.3 |
) |
Adjusted
Net Income |
$ |
77.8 |
|
|
$ |
45.4 |
|
|
$ |
168.1 |
|
|
$ |
100.6 |
|
Basic adjusted net
income per share: |
$ |
0.68 |
|
|
$ |
0.40 |
|
|
$ |
1.47 |
|
|
$ |
0.90 |
|
Diluted adjusted net
income per share: |
$ |
0.67 |
|
|
$ |
0.39 |
|
|
$ |
1.44 |
|
|
$ |
0.87 |
|
Weighted average common
shares (in millions) |
|
|
|
|
|
|
|
Basic |
|
114.7 |
|
|
|
112.7 |
|
|
|
114.5 |
|
|
|
112.4 |
|
Diluted |
|
116.5 |
|
|
|
115.9 |
|
|
|
116.6 |
|
|
|
115.3 |
|
|
|
|
|
|
|
|
|
Note: The company provided detailed explanations of these
non-GAAP financial measures in its Form 8-K filed with the SEC on
November 1, 2018. |
(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 Q3-18 of $401.0M less $25.1M depreciation and
amortization, less $4.5M of integration expenses, less $3.5M of
stock comp and plus $0.1M loss from sales, impairments, and other.
GAAP SG&A in 9M-18 of $1,151.7M less $72.7M depreciation and
amortization, less $14.9M of integration expenses, less $9.9M
of stock comp and $0.6M loss from sales, impairments, and
other. |
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
Sales by Product
Category |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, |
|
|
|
Nine months
ended September 30, |
|
|
|
2018 |
|
2017 |
|
|
|
2018 |
|
2017 |
|
|
|
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 |
$ |
818.7 |
|
38.6 |
% |
|
$ |
679.9 |
|
36.2 |
% |
|
20.4 |
% |
|
$ |
2,273.8 |
|
38.5 |
% |
|
$ |
1,867.6 |
|
35.5 |
% |
|
21.7 |
% |
Manufactured
Products |
|
385.9 |
|
18.2 |
% |
|
|
318.6 |
|
16.9 |
% |
|
21.1 |
% |
|
|
1,051.0 |
|
17.8 |
% |
|
|
900.9 |
|
17.2 |
% |
|
16.7 |
% |
Windows, Doors &
Millwork |
|
372.5 |
|
17.6 |
% |
|
|
347.5 |
|
18.5 |
% |
|
7.2 |
% |
|
|
1,080.1 |
|
18.3 |
% |
|
|
1,016.7 |
|
19.3 |
% |
|
6.2 |
% |
Gypsum, Roofing &
Insulation |
|
146.6 |
|
6.9 |
% |
|
|
147.9 |
|
7.9 |
% |
|
-0.9 |
% |
|
|
400.8 |
|
6.8 |
% |
|
|
409.4 |
|
7.8 |
% |
|
-2.1 |
% |
Siding, Metal &
Concrete Products |
|
196.6 |
|
9.3 |
% |
|
|
183.5 |
|
9.8 |
% |
|
7.1 |
% |
|
|
528.3 |
|
8.9 |
% |
|
|
498.9 |
|
9.5 |
% |
|
5.9 |
% |
Other |
|
198.2 |
|
9.4 |
% |
|
|
201.5 |
|
10.7 |
% |
|
-1.6 |
% |
|
|
574.8 |
|
9.7 |
% |
|
|
561.8 |
|
10.7 |
% |
|
2.3 |
% |
Total
adjusted net sales |
$ |
2,118.5 |
|
100.0 |
% |
|
$ |
1,878.9 |
|
100.0 |
% |
|
12.7 |
% |
|
$ |
5,908.8 |
|
100.0 |
% |
|
$ |
5,255.3 |
|
100.0 |
% |
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUILDERS FIRSTSOURCE, INC. AND
SUBSIDIARIES |
Interest Reconciliation |
(unaudited) |
|
|
|
|
|
|
|
Three months ended September
30, |
|
|
|
|
Interest Expense |
|
Net Debt Outstanding |
|
Adjusted Annual Go Forward Cash
Interest (1) |
|
(in millions) |
2024 Secured Notes @
5.625% Fixed |
$ |
10.5 |
|
$ |
750.0 |
|
|
$ |
42.2 |
2024 Term
Loan @ 5.39% (Floating LIBOR) (2) |
|
6.3 |
|
|
459.4 |
|
|
|
24.6 |
Revolving
Credit Facility @ 3.9% (Floating LIBOR) (2) |
|
5.8 |
|
|
404.0 |
|
|
|
10.0 |
Amortization of deferred loan costs and debt discount |
|
1.2 |
|
|
|
|
Lease
finance obligations and capital leases |
|
5.3 |
|
|
245.2 |
|
|
|
21.2 |
Other |
|
- |
|
|
|
|
Cash |
|
|
|
(34.4 |
) |
|
|
Total |
$ |
29.1 |
|
$ |
1,824.2 |
|
|
$ |
98.0 |
|
|
|
|
|
|
(1)
Excludes issuance cost and one time items. Assumes Q3
borrowing rates on variable debt. |
|
|
(2)
Assumes average next twelve months balances for the Term Loan and
the Revolving Credit Facility |
|
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