BFS reports big Q2 sales, and big refi costs
Builders FirstSource CEO Floyd Sherman describes the three months ended June 30 as "another quarter of improving financial performance" for the Dallas-based pro dealer. However, hefty refinancing costs pushed the company to a net loss of $48.2 million in the quarter, compared with a net loss of $12.1 million in last year’s second quarter.
The company reported operating income of $13.2 million, compared with an operating loss of $1.4 million in the second quarter last year.
The Dallas-based pro dealer’s sales for the period were $398.1 million, an increase of 46.4%.
Sherman explained the market conditions that led to that sales surge: "Lumber and lumber sheet good prices were, on average, 21.5% higher during the second quarter of 2013 as compared with those in the same quarter last year, though prices did fall approximately 30% during the quarter. Falling prices in the back half of the quarter relieved some of the gross margin pressure we had been experiencing from commodity inflation, and we were able to improve our gross margin by 100 basis points for the current quarter due to both improved pricing and higher sales volumes."
For the second quarter of 2013, interest expense included refinancing costs of approximately $48.4 million. It was a cost that the company was willing to pay to get back in the black, according to CFO Chad Crow. "Our recent refinancing transaction provides a tremendous boost to our goal of returning to positive net income," he said.
Sherman added: "As the recovery in the housing market continues, we believe our year-over-year sales growth for the second half of 2013 will be driven by the combination of market share gains and increases in overall customer demand. We will maintain our focus on improving our gross margins and further leveraging our operating cost structure."
Boise Cascade Q2 sales up 16%
Boise, Idaho-based Boise Cascade Co. reported second-quarter sales of $852.3 million, up 16% over the same quarter last year.
Net income of $10.4 million was down from $15.0 million in last year’s second quarter, as gross margins in the company’s distribution segment were adversely affected by commodity prices.
“Commodity pricing for structural panels and lumber was stronger than the prior year quarter, contributing to improved operating performance in our Wood Products segment. However, gross margins in our Building Materials Distribution segment were negatively impacted by a steady downward trajectory in commodity prices during the second quarter of 2013,” said Tom Carlile, CEO. "In addition, we are pleased with our previously announced agreement to acquire two plywood plants in North and South Carolina. These facilities will complement our existing plywood and engineered wood manufacturing businesses and enable us to better serve our customers in the eastern and southeastern United States."
The company says it continues to experience demand below 20-year average historical levels for its products for the balance of 2013. However, "we remain optimistic that the recent improvement in demand for our products will continue."
The company added in a statement: "We expect to manage our production levels to our sales demand, which will likely result in operating some of our facilities below their capacity until demand improves further."
COO of New Enterprise Stone & Lime Co. resigns
James W. Van Buren has left his post as executive VP and CEO of New Enterprise Stone & Lime Co., Inc. Effective July 18, 2013, Van Buren is officially free to pursue other opportunities, though he will remain on the board of directors.
"I am proud of our accomplishments over my tenure, as we have built one of the finest and most recognizable franchises in the quarry, traffic safety and construction industry," said Van Buren. “I am sincerely grateful for the support I’ve received from the Board of Directors, our customers and our employees. The company is well positioned and on a clear path to a successful future. I am looking forward to my continued role as a significant shareholder and member of the Board of Directors."
New Enterprise CEO Paul Detwiler, III, thanked Van Buren for his contributions to the company in a statement, wherein he emphasized NESL’s continued focus on construction materials, heavy/highway construction and traffic safety.