Builders FirstSource sees slight sales bump
Builders FirstSource, the nation’s largest prodealer, posted net sales of $3.9 billion in the first quarter ended March 31. That’s up 0.2 percent from the same quarter last year.
The company reported that core organic sales were essentially flat, in line with expectations, and growth from acquisitions partially offset by commodity deflation.
Net income was $258.8 million, compared to net income of $333.8 million in the same period a year ago. The 22.5% decrease in net income was primarily driven by lower gross profit and higher operating expenses, largely due to acquisitions, partially offset by lower income tax expense, the company said.
"Our resilient first quarter results reflect our differentiated product portfolio and scale, our team members’ consistent focus on executing our strategic priorities, and our operational efficiency initiatives," said Dave Rush, CEO.
The company saw positive growth in the single-family market. Here's the breakdown:
• Core organic net sales: flat;
• Single-family: up 4.3%;
• Multi-family: down 13.4%; and
• Repair and remodel/other: down 4.7%.
"As we expected, a weakening multi-family market and higher mortgage rates driving affordability challenges were headwinds to start the year," Rush said. ”Despite these macro challenges, we are building on our successes and driving growth through our value-added products portfolio and industry-leading digital platform. We are committed to advancing innovation and delivering exceptional customer service as a trusted and preferred partner to our customers."
Peter Jackson, CFO of Builders FirstSource, added, "Our first quarter results demonstrate the effectiveness of our strategy and operating model amid a measured start to the year. We are maintaining our fortress balance sheet and prudently deploying capital to the highest return opportunities, which included acquisitions and share repurchases during the first quarter. Our $1 billion senior notes offering priced in February strengthens our financial flexibility to grow organically and remain acquisitive.”
Shares of BLDR, which had flying high for the past year, were down 19 percent at the end of trading on Tuesday.
Builders FirstSource’s acquisition streak continued in the first quarter, balancing "attractive opportunities" with financial discipline, said Rush.
The company's most recent acquisition—in early May—was Schoeneman’s Building Materials in South Dakota. In early February, the company acquired Quality Door and Millwork of Southern Idaho. And in March, BFS took on Hanson Truss, operating in Northern California and Nevada.
”We believe there is a long runway of M&A targets in our fragmented market, and we are pleased with recent improvements in the pipeline," Rush said.
Among the other recent acquisitions for the national LBM giant were Trussway of Houston, Texas; Church's Lumber of Auburn Hills, Mich.; JB Millworks in Ringgold, Georgia; and Builders Millwork Supply of Anchorage, Alaska.
