Builders FirstSource Reports Second Quarter GainsJuly 28th, 2014 by Casey Flores
Builders FirstSource Inc.’s 2014 second-quarter earnings showed the company has made significant gains from the second-quarter of 2013.
Some highlights include:
- Second quarter 2014 sales increased 7.1 percent to $426.5 million, compared to the second quarter of 2013.
- Gross margin percentage improved to 22.0 percent, up from 20.7 percent in the second quarter of 2013.
- Adjusted EBITDA was $20.4 million, up $3.6 million over the second quarter of 2013.
- Completed the acquisition of Slone Lumber Company on June 30th, increasing the company’s presence in the greater Houston market.
“We achieved our highest quarterly sales since 2006, as we ended the second quarter of 2014 with sales of $426.5 million,” says Floyd Sherman, Builders FirstSource CEO. “We were able to achieve this high level of sales even though sales were reduced by commodity deflation this quarter, as market prices for lumber and lumber sheet goods were, on average, 8.8 percent lower when compared to the second quarter of 2013. In addition, the U.S. Census Bureau reported actual single-family housing starts in the South Region, which encompasses all of our markets, increased just 0.6 percent compared to the second quarter of 2013. Our results are a prime example of how our market share gains of recent years, and the tremendous efforts of our employees, continue to have a positive impact.”
Sherman says Builders’ acquisition of Slone was instrumental for future growth. “[The acquisition allows us] to expand our presence in the Houston market, which is currently the #1 homebuilding market in the country. Evaluating attractive acquisition opportunities such as Slone will continue to be a key strategy of the company.”
Chad Crow, Builders FirstSource senior vice president and chief financial officer adds, “Our gross margin percentage of 22.0 percent was a 130 basis point improvement over the same quarter last year. On a sequential quarter basis, our second quarter gross margin percentage was up 30 basis points. Improved customer pricing drove our overall margin increase, though we still face a very competitive pricing environment. Our selling, general and administrative expense, expressed as a percentage of sales, increased 60 basis points compared to the second quarter of 2013 primarily due to the impact of commodity lumber price deflation on our sales. Based on our growth in sales volume, absent the negative impact of price deflation, our growth in operating expense was in line with our expectations.”
Sherman is confident the company will maintain future growth.
“Though the growth in housing starts this year has not been what most people expected, we still have been able to drive improved year-over-year results due to our market share gains and operating efficiencies. We will continue leveraging those strengths and also look for ways to expand our footprint and market share through acquisitions, as we did with our recent acquisition in the Houston, Texas market,” he says.