Builders First Source Reports First-Quarter Sales Increase Compared to Year BeforeApril 20th, 2012 by DWM Magazine
In reporting its results for the first quarter ended March 31, 2012, sales for Builders First Source were $219.4 million compared to $162.8 million last year, an increase of $56.6 million or 34.7 percent. According to the company, the increase was primarily due to increased sales volume as commodity prices for lumber and lumber sheet goods were, on average, comparable over these same periods.
“This marks our third consecutive quarter with year-over-year sales growth greater than 20 percent,” says Floyd Sherman, Builders FirstSource chief executive. “Our sales growth continues to outpace construction activity as actual U.S. single-family housing starts were up only 16.8 percent compared to the same quarter last year and U.S. single-family units under construction actually decreased 5.0 percent over the same period. Commodity lumber prices for the current quarter were, on average, relatively consistent with those during the first quarter of 2011. When combined, these factors indicate we continue to achieve significant market share gains.”
Sherman adds that the company’s adjusted EBITDA was a loss of $(2.1) million, a $7.6 million improvement over the first quarter of 2011.
“Our gross margin percentage was 20.6 percent, up 1.3 percentage points from 19.3 percent in the first quarter of 201,” says Chad Crow, Builders FirstSource senior vice president and chief financial officer. “Higher sales volume was the primary driver of the margin improvement, as we were able to further lever our fixed costs within cost of goods sold.”
Crow adds, “We ended the quarter with approximately $130 million in cash and liquidity of approximately $95 million, after giving effect to the $35.0 million minimum cash requirement contained in our term loan agreement. Our liquidity at the end of the quarter was better than anticipated due to our improved P&L performance combined with our efficient use of working capital. Of the $17.2 million of cash used in the current quarter, $2.4 million was due to an increase in working capital and $1.7 million related to capital expenditures. The remaining $13.1 million was cash used to fund operating losses and cash interest. Our working capital expressed as a percentage of sales was 9.8 percent, down from 11.1 percent for the first quarter of 2011.”
The company says it also recorded $0.2 million of income tax expense in the first quarter of 2012 compared to a slight income tax benefit in the first quarter of 2011. The company recorded an after-tax, non-cash valuation allowance of $7.0 million and $8.1 million, in 2012 and 2011, respectively, which it says was related to its net deferred tax assets.
Loss from continuing operations in the current quarter was $19.1 million, or 20 cents loss per diluted share, compared to $21.1 million, or 22 cents loss per diluted share, in the first quarter of 2011. Excluding the fair value adjustment for stock warrants and the tax valuation allowance, the company says its loss from continuing operations per diluted share was 11 cents for the current quarter. For the first quarter of 2011, its loss from continuing operations was 13 cents per diluted share, excluding transaction costs and the tax valuation allowance.
The company reported a net loss for the first quarter of 2012 was $19.2 million, or 20 cents loss per diluted share, compared to a net loss of $21.2 million, or 22 cents loss per diluted share, in the first quarter of 2011.