Builders FirstSource: sales are up, but so are losses
Builders FirstSource, the Dallas-based pro dealer, reported net sales of $291.8 million for its third fiscal quarter, an increase of 34.3% when compared with the third quarter of 2011. The company estimated that sales increased approximately 27% due to increased volume and 7% due to price.
Losses from continuing operations were $12.3 million for the quarter, which ended Sept. 30. This compares with a loss of $11.5 million in the third quarter of 2011.
“Our topline growth continues to exceed the increase in residential construction activity, as actual single-family housing starts in the south region increased 27.7% over the same time period, and single-family units under construction increased only 12.4%," said Builders FirstSource CEO Floyd Sherman. "For the second consecutive quarter, we reported positive adjusted EBITDA, finishing with $3.0 million for the current quarter as compared with an adjusted EBITDA loss of $0.7 million in the third quarter of 2011.”
Chad Crow, Builders FirstSource senior VP and CFO, said that the company’s results were negatively impacted by inflation on commodity lumber and “our limited ability to adjust intra-quarter customer pricing.”
“While we were able to pass on some price increases as part of our third-quarter pricing, we once again experienced a rising commodity market for most of the quarter,” Crow added. “Commodity prices increased, on average, 14% from the end of the second quarter through mid-September, before falling back somewhat by quarter-end. These factors, combined with what is still an extremely competitive pricing environment, constrained our gross margin during the quarter.”
USG swings to profit
USG Corp. reported net sales of $828 million for its third fiscal quarter, a 9% increase over net sales of $763 million in the same period a year ago. Operating profit for the third quarter, which ended Sept. 30, 2012, was $29 million, compared with a $79 million loss from continuing operations in the third quarter of 2011.
The third-quarter net loss from both continuing and discontinued operations was $29 million. This result compares with a $115 million net loss from both continuing and discontinued operations in the third quarter of 2011. During the third quarter, the company announced it had entered into a definitive agreement to sell its European operations. Although that sale has not yet been consummated, results from European operations have been reported as discontinued operations for the 2012 and 2011 periods. Those operations reported net sales of $27 million and operating profit of $1 million for the third quarter of 2012, and $29 million and $3 million, respectively, for the third quarter of 2011.
“Our innovative new products, modest demand improvement, new wallboard pricing strategy and recent restructuring efforts contributed to our third consecutive quarter of positive operating profit,” said James Metcalf, USG’s chairman, president and CEO. “We achieved continued wallboard volume growth, and price was essentially flat compared with the prior quarter, with any improvement offset by regional and channel mix and freight cost fluctuations.”
Selling the company’s European operations, Metcalf said, “will allow us to reallocate assets from a lower-growth market to joint ventures supporting higher-growth markets in India, which will allow us to diversify the company’s earnings and offset some of the cyclicality in our core businesses.”
Although wallboard demand remains significantly below historical averages, the company’s wallboard division, L&W Supply, experienced a 10% rise in same-store net sales at its branch locations. And its newer introductions to the market are doing well. According to the Chicago-based company, its Sheetrock brand Ultralight panels accounted for 47% of all USG wallboard shipments in the United States.
Weyerhaeuser to distribute WindsorOne
Weyerhaeuser Distribution has added the full line of WindsorOne trim and molding products to its offerings in California, where it will be the exclusive distributor of manufacturer’s products.
Weyerhaeuser is stocking and shipping the WindsorOne line from its distribution centers in Stockton, Fresno, Santa Clarita and Fontana.
This summer, Weyerhaeuser also announced it is distributing WindsorOne building materials in Texas.