Builders FirstSource posts strong Q2
Builders FirstSource CEO Floyd Sherman likes what he sees when he looks at the new residential housing market. He also described himself as bullish on his company’s ability to convert housing market growth to sales growth.
The Dallas-based pro dealer reported net sales of $1.8 billion in the quarter ended June 30. That’s up 9.9% from the same quarter last year. Net income swelled to $37.9 million, up from $29.4 million in the year-ago quarter.
“We are increasingly leveraging our national scale, geographic and end market exposure, customer reach, service advantage, and value-added product portfolio to continue to grow our revenue and operating profit,” Sherman said.
Excluding closed locations, sales grew 10.1% in the first half of the year, Sherman said. Also, sales to the single-family construction end market grew 7.4%. Repair and remodeling end market sales increased 5.1%. He pointed to major investments in manufacturing capacity and talent.
Other metrics from the company’s second quarter earnings release:
- Gross margin of $460.8 million increased by $43.5 million over the second quarter of 2016.
- Gross margin percentage of 25.0%, up from 24.9%;
- Year to date net sales of $3.4 billion, up 9.8% over the same period in the previous year.
Builders FirstSource, which acquired ProBuild Holdings in August 2015 to form an LBM super power operating in 40 states, had $6.4 billion in sales last year.
BMC sales growth hits double digits
Recent acquisitions and labor-saving solutions combined to propel BMC Stock Holdings to a double-digit sales gain in the second quarter ended June 30.
The Atlanta-based dealer reported sales of $886.4 million in the quarter, up 11.1% from the same quarter last year. Net income declined slightly from $18.0 million to $17.6 million, as merger and integration costs increased by about $3 million.
CEO Peter Alexander pointed to the continuation of solid top-line growth. He also singled out the success of the Ready-Frame whole-house solution, which delivered $45 million in revenue in the quarter. “This whole-house solution continues to gain significant traction as we provide builders a way to effectively navigate a tough labor environment, save money and shorten cash conversion cycle times,” he said.
Recent acquisitions added $19.2 million to the topline, he said. In April, BMC acquired Texas Plywood & Lumber Co. in Dallas and Code Plus Components in the Washington, D.C. market.
“We continue to pursue additional opportunities to further drive profitable growth,” Alexander said.
Meanwhile, the LBM dealer described price volatility that is expected to extend into the third quarter. Executive VP and CFO Jim Major said the company anticipates gross margin percentage to improve
“Our team remains intently focused on driving growth in our value-added product offerings and higher-margin customer categories while, at the same time, executing initiatives to further rationalize our cost structure and improve our operating results,” he said.
The BMC merger with Stock merger continues to play out in the company’s books. BMC realized an additional $2.8 million of merger-related synergies in the quarter. The revised estimate of total annualized merger-related cost savings is set at $48 million to $52 million by the end of 2017.
“During the second quarter, we realized an additional $2.8 million of merger-related cost synergies, primarily within cost of sales, and have refined our estimate of total annualized merger-related cost savings to $48 million to $52 million by the end of 2017.”
84 Lumber builds in North Carolina
Greensboro, North Carolina – home of the Greensboro grasshoppers, the Carolina Dynamo and the Greensboro Swarm (teams that play, respectively, baseball, soccer and basketball) – is now home to the state’s newest 84 Lumber location.
The Pennsylvania-based lumberyard company calls Greensboro an “ideal location.” The store, to be the company’s 12th in North Carolina, is located near three major interstates. With more than 8,000 square feet, Greensboro will build on an existing footprint which includes Raleigh, North Charlotte, and Fayetteville.
“With the opening of new stores in both Durham and Greensboro in 2017, we’re elevating 84 Lumber’s visibility in the North Carolina market,” said 84 Lumber’s chief operating officer Frank Cicero. “This is a great opportunity for us to connect with new customers and positively impact the marketplace.”
The store will also include an 84 Lumber Kitchen and Bath Design Studio complete with a full spectrum of design services for renovators and DIYers.
A three-day grand opening celebration at the new Greensboro store is slates for Aug. 10-12. The company's most recent previous new-opening announcement was for a store in Ruskin, Florida.