Builders FirstSource Reports Fourth Quarter Net Income of $4.5 MillionFebruary 24th, 2014 by DWM Magazine
Builders FirstSource Inc. reported its results for the fourth quarter and fiscal year ended December 31, 2013. According to the company, it saw a fourth quarter sales increase of 28.3 percent over the fourth quarter of 2012.
Additionally, the company saw its gross margin percentage improve 220 bps, to 22.4 percent, compared to 20.2 percent in the fourth quarter of 2012. Operating income was $13.3 million compared to $0.1 million in the fourth quarter of 2012 and net income improved to $4.5 million, up from a net loss of ($12.0) million for the fourth quarter of 2012.
Adjusted EBITDA was $16.2 million for the current quarter compared to adjusted EBITDA of $3.4 million for the fourth quarter of 2012.
“We ended fiscal 2013 with sales of approximately $1.5 billion, a 39.2 percent increase over fiscal year 2012 sales,” says Builders FirstSource CEO Floyd Sherman. “From a U.S. single-family housing starts perspective, 2013 ended with 618,400 actual starts, up 15.5 percent over 2012, but still well below the historical average of the past fifty years. When coupled with the ongoing recovery in U.S. housing, our market share gains of recent years have helped accelerate the pace of our sales growth. In turn, this enabled us to end fiscal 2013 with positive earnings before taxes, when excluding the effects of charges related to our May 2013 debt refinancing.
“Our fiscal 2013 concluded with a strong fourth quarter,” he adds. “Our topline growth of 28.3 percent for the quarter once again exceeded the increase in residential construction activity, as actual single-family housing starts in the South region (as defined by the U.S. Census Bureau, and which includes all of our markets) increased 14.2 percent and single-family units under construction increased 23.9 percent. In addition, our gross margin percentage increased to 22.4 percent for the current quarter, up from 20.2 percent for the fourth quarter of 2012. Higher sales volume and better customer pricing were the primary drivers of our overall margin improvement, in what is still a very competitive pricing environment.”
Chad Crow, Builders FirstSource senior vice president and chief financial officer says, “While we were increasing our sales and gross margin, we also continued to leverage our operating expenses. For the fourth quarter of 2013, our selling, general and administrative expense was 18.8 percent of sales compared to 20.1 percent for the fourth quarter of 2012. All of these factors helped drive the $16.6 million improvement in net income, resulting in net income of $0.05 per diluted share for the current quarter compared to a ($0.13) loss per diluted share for the fourth quarter of 2012. We were also cash flow positive during the quarter, despite making the first required semi-annual interest payment of $13.5 million related to our 2021 notes. We ended the year with liquidity of $211.8 million, consisting of $54.7 million of cash and $157.1 million in borrowing availability under our revolving credit facility. Our working capital as a percent of sales also improved, from 10.9 percent of sales for the fourth quarter of 2012 to 9.6 percent of sales for the current quarter.”
“We certainly closed 2013 on a strong note as indicated by our fourth quarter results. However, winter weather across our markets thus far in 2014 has caused disruptions and has delayed construction activity,” adds Sherman. “Nevertheless, we still believe a growing demand for housing exists in our markets, and that once the weather abates increased construction activity will return.”