Builders FirstSource Reports Increase in Sales in Third QuarterOctober 19th, 2012 by DWM Magazine
Builders FirstSource Inc., supplier and manufacturer of structural and related building products for residential new construction, based in Dallas, reported its results for the third quarter ended September 30, 2012, which includes a 34.3-percent increase in sales. Sales for the third quarter of 2012 were $291.8 million when compared to the third quarter of 2011.
“Our top-line growth continues to exceed the increase in residential construction activity, as actual single-family housing starts in the South Region increased 27.7 percent over the same time period and single-family units under construction increased only 12.4 percent,” says CEO Floyd Sherman. “For the second consecutive quarter, we reported positive Adjusted EBITDA, finishing with $3.0 million for the current quarter as compared to an Adjusted EBITDA loss of $0.7 million in the third quarter of 2011, and on a year-to-date basis, our Adjusted EBITDA has improved from a loss of $11.7 million in 2011 to positive $3.0 million in 2012.”
He attributes the increase to “stronger sales trends as the housing market continues to recover.” Chad Crow, senior vice president and chief financial officer, adds that challenges still remain.
“While we were very pleased by the improved building activity and our increased sales during the quarter, our gross margins were again negatively impacted by inflation on commodity lumber within the quarter and our limited ability to adjust intra-quarter customer pricing,” he says. “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. Commodity prices increased, on average, 14 percent 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.”