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Builders FirstSource Reports Second Quarter 2024 Results

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Builders FirstSource (NYSE: BLDR) reported Q2 2024 results with net sales of $4.5 billion, a 1.6% decrease YoY, driven by a 3.8% decline in core organic sales. Gross profit margin decreased 240 basis points to 32.8%, impacted by Multi-Family sector challenges. Net income fell 15% to $344.1 million, or $2.87 per diluted share. Adjusted EBITDA decreased 12.9% to $669.7 million.

Despite lower sales, cash provided by operating activities rose to $452.1 million, and free cash flow increased 35.9% to $366.7 million. The company repurchased 5.8 million shares for $989.6 million. CEO Dave Rush highlighted maintaining a mid-teens EBITDA margin, while CFO Peter Jackson noted nearly $1 billion in share repurchases and three acquisitions.

Looking ahead, BLDR projects 2024 net sales of $16.4-$17.2 billion, with an adjusted EBITDA of $2.2-$2.4 billion. Challenges include weaker Single-Family starts and Multi-Family declines, but strategic investments and strong financial flexibility are emphasized.

Builders FirstSource (NYSE: BLDR) ha riportato i risultati del secondo trimestre 2024 con vendite nette di 4,5 miliardi di dollari, registrando una diminuzione dell'1,6% rispetto all'anno precedente, influenzata da un calo del 3,8% delle vendite core organiche. Il margine di profitto lordo è diminuito di 240 punti base, scendendo al 32,8%, colpito dalle difficoltà nel settore Multi-Family. Il reddito netto è sceso del 15% a 344,1 milioni di dollari, pari a 2,87 dollari per azione diluita. Il EBITDA rettificato è diminuito del 12,9% a 669,7 milioni di dollari.

Nonostante le vendite più basse, il cash flow generato dalle attività operative è aumentato a 452,1 milioni di dollari e il free cash flow è cresciuto del 35,9% a 366,7 milioni di dollari. L'azienda ha riacquistato 5,8 milioni di azioni per 989,6 milioni di dollari. Il CEO Dave Rush ha sottolineato l'importanza di mantenere un margine EBITDA a metà cifra, mentre il CFO Peter Jackson ha evidenziato quasi 1 miliardo di dollari in riacquisti di azioni e tre acquisizioni.

Guardando al futuro, BLDR prevede vendite nette per il 2024 tra 16,4 e 17,2 miliardi di dollari, con un EBITDA rettificato tra 2,2 e 2,4 miliardi di dollari. Le difficoltà includono la debolezza nei cantieri Single-Family e il calo del settore Multi-Family, ma vengono sottolineati investimenti strategici e una forte flessibilità finanziaria.

Builders FirstSource (NYSE: BLDR) reportó resultados del segundo trimestre de 2024 con ventas netas de 4.5 mil millones de dólares, lo que representa una disminución del 1.6% interanual, impulsada por una caída del 3.8% en las ventas orgánicas principales. El margen bruto de utilidad disminuyó 240 puntos base a 32.8%, afectado por los desafíos en el sector Multi-Family. El ingreso neto cayó un 15% a 344.1 millones de dólares, o 2.87 dólares por acción diluida. El EBITDA ajustado disminuyó un 12.9% a 669.7 millones de dólares.

A pesar de las menores ventas, el efectivo proporcionado por actividades operativas aumentó a 452.1 millones de dólares, y el flujo de caja libre creció un 35.9% a 366.7 millones de dólares. La compañía recompró 5.8 millones de acciones por 989.6 millones de dólares. El CEO Dave Rush destacó la importancia de mantener un margen EBITDA en dos dígitos medios, mientras que el CFO Peter Jackson mencionó casi 1 mil millones en recompras de acciones y tres adquisiciones.

De cara al futuro, BLDR proyecta ventas netas para 2024 de entre 16.4 y 17.2 mil millones de dólares, con un EBITDA ajustado de entre 2.2 y 2.4 mil millones de dólares. Los desafíos incluyen un menor inicio de proyectos Single-Family y caídas en el sector Multi-Family, pero se enfatiza la inversión estratégica y una fuerte flexibilidad financiera.

Builders FirstSource (NYSE: BLDR)는 2024년 2분기 실적을 발표하며 순매출이 45억 달러로 작년 대비 1.6% 감소했으며, 이는 핵심 유기적 매출의 3.8% 감소에 기인하는 것으로 나타났습니다. 총 이익률은 240bp 감소하여 32.8%에 이르렀으며, 다가구 부문에서의 도전이 영향을 미쳤습니다. 순이익은 15% 감소하여 3억4410만 달러, 즉 희석주당 2.87달러에 달했습니다. 조정 EBITDA는 12.9% 감소하여 6억6970만 달러로 나타났습니다.

판매가 줄어들었음에도 불구하고 운영 활동에서 발생한 현금은 4억5210만 달러로 증가하였고, 자유 현금 흐름은 35.9% 증가하여 3억6670만 달러로 증가했습니다. 회사는 580만 주의 자사주를 9억8960만 달러에 재구매했습니다. CEO 데이브 러시는 중간 십 대 EBITDA 마진을 유지하는 것의 중요성을 강조했으며, CFO 피터 잭슨은 거의 10억 달러에 달하는 자사주 재매입과 세 건의 인수를 언급했습니다.

앞으로 BLDR은 2024년 순매출을 164억 달러에서 172억 달러로 예상하며, 조정 EBITDA는 22억 달러에서 24억 달러로 예상하고 있습니다. 도전 과제로는 주거용 단독 주택 시작 감소와 다가구 주택 감소가 포함되지만, 전략적 투자와 강력한 재무 유연성도 강조됩니다.

Builders FirstSource (NYSE: BLDR) a publié ses résultats pour le deuxième trimestre 2024, avec un chiffre d'affaires net de 4,5 milliards de dollars, soit une baisse de 1,6 % par rapport à l'année précédente, en raison d'un déclin de 3,8 % des ventes organiques de base. La marge brute a diminué de 240 points de base pour atteindre 32,8 %, impactée par les défis du secteur des logements Multi-Family. Le revenu net a chuté de 15 % pour atteindre 344,1 millions de dollars, soit 2,87 dollars par action diluée. Le EBITDA ajusté a diminué de 12,9 % pour atteindre 669,7 millions de dollars.

Malgré une baisse des ventes, les flux de trésorerie générés par les activités opérationnelles ont augmenté à 452,1 millions de dollars, et le flux de trésorerie libre a augmenté de 35,9 % pour atteindre 366,7 millions de dollars. L'entreprise a racheté 5,8 millions d'actions pour 989,6 millions de dollars. Le PDG Dave Rush a souligné l'importance de maintenir une marge EBITDA dans les moyennes adolescents, tandis que le directeur financier Peter Jackson a noté près d'un milliard de dollars en rachats d'actions et trois acquisitions.

En regardant vers l'avenir, BLDR projette un chiffre d'affaires net pour 2024 compris entre 16,4 et 17,2 milliards de dollars, avec un EBITDA ajusté compris entre 2,2 et 2,4 milliards de dollars. Les défis incluent des débuts plus faibles de projets Single-Family et des déclins dans les Multi-Family, mais des investissements stratégiques et une forte flexibilité financière sont soulignés.

Builders FirstSource (NYSE: BLDR) hat die Ergebnisse des zweiten Quartals 2024 veröffentlicht, mit Nettoumsätzen von 4,5 Milliarden Dollar, was einem Rückgang von 1,6% im Vergleich zum Vorjahr entspricht, was auf einen Rückgang der Kernorgankäufe um 3,8% zurückzuführen ist. Die Bruttogewinnmarge sank um 240 Basispunkte auf 32,8%, betroffen von Herausforderungen im Mehrfamilien-Sektor. Der Nettoertrag fiel um 15% auf 344,1 Millionen Dollar, oder 2,87 Dollar pro verwässerter Aktie. Das angepasste EBITDA ging um 12,9% auf 669,7 Millionen Dollar zurück.

Trotz sinkender Umsätze stieg der Cashflow aus der betrieblichen Tätigkeit auf 452,1 Millionen Dollar, während der freie Cashflow um 35,9% auf 366,7 Millionen Dollar anstieg. Das Unternehmen erwarb 5,8 Millionen Aktien für 989,6 Millionen Dollar zurück. CEO Dave Rush betonte, dass es wichtig sei, eine EBITDA-Marge im mittleren Bereich zu halten, während CFO Peter Jackson fast 1 Billion Dollar an Aktienrückkäufen und drei Akquisitionen erwähnte.

Für die Zukunft prognostiziert BLDR Nettoumsätze für 2024 zwischen 16,4 und 17,2 Milliarden Dollar, mit einem angepassten EBITDA von 2,2 bis 2,4 Milliarden Dollar. Zu den Herausforderungen gehören schwächere Starts im Einfamilienhaussektor und Rückgänge im Mehrfamilienhaussektor, jedoch wird auch auf strategische Investitionen und eine starke finanzielle Flexibilität hingewiesen.

Positive
  • Cash provided by operating activities increased to $452.1 million.
  • Free cash flow rose 35.9% to $366.7 million.
  • Repurchased 5.8 million shares for $989.6 million.
  • Maintained mid-teens EBITDA margin.
  • Projected 2024 net sales of $16.4-$17.2 billion and adjusted EBITDA of $2.2-$2.4 billion.
Negative
  • Net sales decreased by 1.6% YoY.
  • Gross profit margin decreased by 240 basis points.
  • Net income decreased by 15% to $344.1 million.
  • Adjusted EBITDA decreased by 12.9% to $669.7 million.
  • Multi-Family sector saw a significant decline of 31.3%.

Insights

Builders FirstSource's Q2 2024 results show resilience amid challenging market conditions. While net sales decreased 1.6% to $4.5 billion, the company maintained a robust Adjusted EBITDA margin of 15.0%. This demonstrates the strength of their business model despite headwinds in the housing market.

Key points to consider:

  • Core organic sales declined 3.8%, primarily due to a 31.3% drop in Multi-Family segment
  • Gross profit margin decreased 240 basis points to 32.8%
  • Free cash flow increased 35.9% to $366.7 million
  • The company repurchased $989.6 million worth of shares, showcasing confidence in their financial position

The company's ability to maintain mid-teens EBITDA margins for 13 consecutive quarters is impressive, indicating operational efficiency and strong cost management.

The housing market landscape presents a mixed picture for Builders FirstSource. While Single-Family starts are projected to grow slightly, Multi-Family starts are expected to decline significantly by 25% to 30% in 2024. This shift in market dynamics could impact the company's revenue mix and overall performance.

Key market trends to watch:

  • Ongoing housing affordability challenges
  • Weaker-than-expected Single-Family starts
  • Slowing Multi-Family segment
  • Flat Repair and Remodel market

The company's focus on value-added solutions and digital platform adoption could help mitigate some of these challenges. However, investors should closely monitor housing market indicators and their potential impact on Builders FirstSource's future performance.

Builders FirstSource's financial strategy appears sound in the face of market uncertainties. The company's strong balance sheet and cash flow generation provide flexibility for both organic and inorganic growth opportunities.

Key financial highlights:

  • Net debt to LTM Adjusted EBITDA ratio of 1.4x, indicating a healthy leverage position
  • Robust liquidity of approximately $1.7 billion
  • Aggressive share repurchase program, with 45.0% of total shares repurchased since August 2021
  • Productivity savings of $37 million in Q2, with $90-110 million expected for full-year 2024

The company's ability to generate strong free cash flow and maintain financial discipline positions it well to navigate market volatility and potentially capitalize on strategic opportunities in the future.

IRVING, Texas--(BUSINESS WIRE)-- Builders FirstSource, Inc. (NYSE: BLDR) today reported its results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights
All Year-Over-Year Comparisons Unless Otherwise Noted:

  • Net sales were $4.5 billion, a 1.6% decrease, with core organic sales down 3.8% as Multi-Family continues to trend downward, partially offset by growth from acquisitions and Single Family.
  • Gross profit margin percentage decreased 240 basis points to 32.8%, primarily driven by ongoing normalization, particularly in Multi-Family.
  • Net income decreased 15.0% to $344.1 million, or $2.87 per diluted share compared to $3.16 per diluted share in the prior year period, which is a 9.2% decline in net income per diluted share.
  • Adjusted EBITDA decreased 12.9% to $669.7 million, primarily driven by lower gross profit, partially offset by lower operating expenses.
  • Adjusted EBITDA margin declined by 200 basis points to 15.0%. Adjusted EBITDA margin has remained in the mid-teens or better for 13 consecutive quarters.
  • Cash provided by operating activities was $452.1 million, up $60.8 million compared to the prior year period, while free cash flow increased 35.9% to $366.7 million, compared to $269.9 million in the prior year period.
  • The Company repurchased 5.8 million shares of common stock at an average price of $170.01 for $989.6 million, inclusive of applicable fees and taxes.

“As we continue to operate in this complex environment, I am proud of our resilient second quarter results highlighted by maintaining a mid-teens EBITDA margin, which demonstrates the strength of our differentiated business model and the hard work of our extraordinary team members,” commented Dave Rush, CEO of Builders FirstSource. “While we continue to see weaker than expected Single-Family starts, slowing Multi-Family, and broader housing affordability challenges, we are executing our strategy by controlling what we can control, investing in value-added solutions, and driving adoption of our industry-leading digital platform. Our ability to solve industry pain points with our best-in-class product portfolio and delivering exceptional customer service makes us trusted partners to our customers as they navigate this uncertain macro landscape.”

Peter Jackson, CFO of Builders FirstSource, added, “We were able to effectively navigate a softer-than-expected housing environment during the second quarter by leaning into the pillars of our strategy and operating model. Leveraging our fortress balance sheet and exceptional financial flexibility, we executed nearly $1 billion of share repurchases and made three tuck-in acquisitions to enhance and expand our existing footprint. Looking forward, we believe our sustainable competitive advantages in our value-added solutions and strong financial position are enabling us to successfully manage volatility and deliver long-term value creation.”

Second Quarter 2024 Financial Performance Highlights
All Year-Over-Year Comparisons Unless Otherwise Noted:

Net Sales

  • Net sales of $4.5 billion, a 1.6% decrease, driven by a 3.8% decline in core organic sales as Multi-Family continues to trend downward, partially offset by growth from acquisitions of 1.9% and commodity inflation of 0.3%.
  • Core organic net sales declined 3.8%. Single-Family increased 1.1% and Repair and Remodel (“R&R”)/Other increased 1.5%, while Multi-Family declined 31.3%. On a weighted basis, the increases in Single-Family raised net sales by 0.7% and R&R/Other by 0.3%, respectively, while the decrease in Multi-Family lowered net sales by 4.8%.

Gross Profit

  • Gross profit was $1.5 billion, a decrease of 8.3%. Gross profit margin percentage decreased 240 basis points to 32.8%, primarily driven by ongoing normalization, particularly in Multi-Family.

Selling, General and Administrative Expenses

  • SG&A was $973.2 million, a decrease of $44.7 million, or 4.4%, primarily driven by lower variable compensation due to lower core organic net sales, partially offset by additional expenses from operations acquired within the last twelve months. As a percentage of net sales, total SG&A decreased by 70 basis points to 21.8%.

Interest Expense

  • Interest expense decreased $1.0 million to $52.0 million, primarily due to interest income received during the period, partially offset by higher interest expense on higher average debt balances.

Income Tax Expense

  • Income tax expense was $93.4 million, compared to $119.4 million in the prior year period, primarily driven by a decrease in income before income tax. The effective tax rate in the second quarter decreased 150 basis points year-over-year to 21.3%, primarily driven by a stock-based compensation windfall benefit.

Net Income

  • Net income was $344.1 million, or $2.87 earnings per diluted share, compared to net income of $404.6 million, or $3.16 earnings per diluted share, in the same period a year ago. The 15.0% decrease in net income was primarily driven by lower gross profit, partially offset by lower operating and income tax expenses.

Adjusted Net Income

  • Adjusted net income was $420.4 million, a decrease of 15.6%, primarily driven by lower gross profit, partially offset by lower operating and income tax expenses.

Adjusted Earnings Per Diluted Share

  • Adjusted earnings per diluted share was $3.50, compared to $3.89 adjusted earnings per diluted share in the same period a year ago. The 10.0% decrease was primarily driven by lower adjusted net income, partially offset by share repurchases.

Adjusted EBITDA

  • Adjusted EBITDA decreased 12.9% to $669.7 million, primarily driven by lower gross profit, partially offset by lower operating expenses.
  • Adjusted EBITDA margin declined by 200 basis points from the prior year period to 15.0%, primarily due to lower gross profit margins, partially offset by lower operating expenses.

Capital Structure, Leverage, and Liquidity Information

  • For the three months ended June 30, 2024, cash provided by operating activities was $452.1 million, and cash used in investing activities was $164.6 million. The Company's free cash flow was $366.7 million, compared to $269.9 million in the prior year period due to a decrease in net working capital, partially offset by lower net income.
  • Liquidity as of June 30, 2024, was approximately $1.7 billion, consisting of $1.6 billion in net borrowing availability under the revolving credit facility and $0.1 billion of cash on hand.
  • As of June 30, 2024, LTM Adjusted EBITDA was $2.7 billion and net debt was $3.8 billion, resulting in the net debt to LTM Adjusted EBITDA ratio of 1.4x, compared to 1.1x in the prior year period.
  • In the second quarter, the Company repurchased 5.8 million shares of its common stock at an average price of $170.01 per share for $989.6 million, inclusive of applicable fees and taxes.
  • The Company’s Board of Directors recently authorized a new repurchase plan of up to $1.0 billion of the Company’s outstanding shares of common stock.
  • Since the inception of its buyback program in August 2021, the Company has repurchased 93.0 million shares of its common stock, or 45.0% of its total shares outstanding, at an average price of $76.65 per share for a total cost of $7.1 billion. As of June 30, 2024, shares outstanding were approximately 116.5 million.

Operational Excellence Productivity

  • For the second quarter, the Company delivered approximately $37 million in productivity savings related to operations excellence and supply chain initiatives. Year to date, the Company has delivered approximately $77 million in productivity savings.
  • The Company expects to deliver $90 million to $110 million in productivity savings in 2024.

2024 Full Year Total Company Outlook

For 2024, the Company expects to achieve the financial performance highlighted below. Projected Net Sales and Adjusted EBITDA include the expected impact of price, commodities, and margins for 2024.

  • Net Sales to be in a range of $16.4 billion to $17.2 billion.
  • Gross Profit margin to be in a range of 31.5% to 32.5%.
  • Adjusted EBITDA to be in a range of $2.2 billion to $2.4 billion.
  • Adjusted EBITDA margin to be in a range of 13.4% to 14.0%.
  • Free cash flow in the range of $1.0 billion to $1.2 billion.

2024 Full Year Assumptions

The Company’s anticipated 2024 performance is based on several assumptions for the full year, including the following:

  • Within the Company’s geographies, Single-Family starts are projected to be up low-single digits, Multi-Family starts down 25% to 30%, and R&R flat to the prior year.
  • Acquisitions completed within the last twelve months are projected to add net sales growth of 1.5% to 2.0%.
  • Total capital expenditures in the range of $400 million to $500 million.
  • Average commodity prices in the range of $380 to $400 per thousand board feet (mbf).
  • Interest expense in the range of $205 million to $215 million.
  • An effective tax rate of 23.0% to 25.0%.
  • Depreciation and amortization expenses in the range of $525 million to $575 million.
  • Two more selling days in 2024 versus 2023.

Conference Call

Builders FirstSource will host a conference call and webcast on Tuesday, August 6, 2024, to discuss the Company’s financial results and other business matters. The teleconference will begin at 8:00 a.m. Central Time and will be hosted by Dave Rush, Chief Executive Officer, and Peter Jackson, Chief Financial Officer.

To participate in the teleconference, please dial into the call a few minutes before the start time at 800-225-9448 (U.S. and Canada) or 203-518-9708 (international), Conference ID: BLDRQ224. A replay of the call will be available at 12:00 p.m. Central Time through Tuesday, August 13, 2024. To access the replay, please dial 800-723-7372 (U.S. and Canada) or 402-220-2666 (international). The live webcast and archived replay can also be accessed on the Company's investor relations website at investors.bldr.com under the Events and Presentations section. The online archive of the webcast will be available for approximately 90 days.

Upcoming Events

Management will participate in investor meetings at the Jefferies Industrials Conference in New York City on September 4, 2024, the Zelman Housing Summit in Boston on September 12, 2024, and the RBC Capital Markets Global Industrials Conference in Las Vegas on September 24, 2024.

About Builders FirstSource

Headquartered in Irving, Texas, Builders FirstSource is the largest U.S. supplier of building products, prefabricated components, and value-added services to the professional market segment for new residential construction and repair and remodeling. We provide customers an integrated homebuilding solution, offering manufacturing, supply, delivery, and installation of a full range of structural and related building products. We operate in 43 states with approximately 570 locations and have a market presence in 48 of the top 50 and 90 of the top 100 MSAs, providing geographic diversity and balanced end market exposure. We service customers from strategically located distribution and manufacturing facilities (some of which are co-located) that produce value-added products such as roof and floor trusses, wall panels, stairs, vinyl windows, custom millwork, and pre-hung doors. Builders FirstSource also distributes dimensional lumber and lumber sheet goods, millwork, windows, interior and exterior doors, and other specialty building products. www.bldr.com

Forward-Looking Statements

Statements in this news release and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about forecasted financial performance or other statements about anticipations, beliefs, expectations, hopes, synergies, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. As with the forward-looking statements included in this release, these forward-looking statements are by nature inherently uncertain, and actual results or events may differ materially as a result of many factors. All forward-looking statements are based upon information available to Builders FirstSource on the date this release was submitted. Builders FirstSource undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control or may be currently unknown to the Company, that could cause actual events or results to differ materially from the events or results described in the forward-looking statements; such risks or uncertainties include those related to the Company’s growth strategies, including acquisitions, organic growth and digital strategies, or the dependence of the Company’s revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, consumer confidence, labor and supply shortages, and also lumber and other commodity prices. Builders FirstSource may not succeed in addressing these and other risks. Further information regarding factors that could affect our financial and other results can be found in the risk factors section of Builders FirstSource’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and may also be described from time to time in the other reports Builders FirstSource files with the SEC. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein.

Non-GAAP Financial Measures

The financial measures entitled Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, diluted Adjusted net income per share, Adjusted SG&A, Adjusted SG&A as a percent of sales, and Free cash flow are not financial measures recognized under GAAP and are therefore non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and operating results.

Adjusted EBITDA is defined as GAAP net income before depreciation and amortization expense, interest expense, net, income tax expense and other non-cash or special items including stock compensation expense, acquisition and related expense, technology implementation expense, debt issuance and refinancing costs, severance and gain on sale of assets and other one-time costs. LTM Adjusted EBITDA is defined as Adjusted EBITDA for the last twelve consecutive months. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net sales. Adjusted net income is defined as GAAP net income before non-cash or special items including acquisition and related expense, technology implementation expense, debt issuance and refinancing cost and amortization expense offset by the tax effect of those adjustments to net income. Adjusted net income per diluted share is defined as Adjusted net income divided by weighted average diluted common shares outstanding. Adjusted SG&A is defined as GAAP SG&A expense before non-cash or special items including acquisition and related expense, depreciation and amortization expense, and stock compensation expense. Adjusted SG&A as a percent of sales is defined as Adjusted SG&A divided by net sales. Free cash flow is defined as GAAP net cash from operating activities less capital expenditures, net of proceeds from the sale of property, plant and equipment.

Company management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income and diluted Adjusted net income per share as supplemental measures in its evaluation of the Company’s business, including for trend analysis, purposes of determining management incentive compensation and budgeting and planning purposes. Company management believes that these measures provide a meaningful measure of the Company’s performance and a better baseline for comparing financial performance across periods because these measures eliminate the effects of period to period changes, in the case of Adjusted EBITDA and Adjusted EBITDA margin, in taxes, costs associated with capital investments, interest expense, stock compensation expense, and other non-cash and non-recurring items and, in the case of Adjusted net income and Adjusted net income per diluted share, in certain non-recurring items. Company management also uses free cash flow as a supplemental measure in its evaluation of the Company’s business, including for purposes of its internal liquidity assessments. Company management believes that free cash flow provides a meaningful evaluation of the Company’s liquidity.

The Company believes that these non-GAAP financial measures provide additional tools for investors to use in evaluating ongoing operating results, cash flows and trends and in comparing the Company’s financial measures with other companies in the Company’s industry, which may present similar non-GAAP financial measures to investors. However, the Company’s calculations of these financial measures are not necessarily comparable to similarly titled measures reported by other companies. Company management does not consider these financial measures in isolation or as alternatives to financial measures determined in accordance with GAAP. Furthermore, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below.

The Company’s Adjusted EBITDA outlook, free cash flow and full-year forecast for its effective tax rate on operations exclude the impact of certain income and expense items that management believes are not part of underlying operations. These items may include, but are not limited to, loss on early extinguishment of debt, restructuring charges, certain tax items, and charges associated with non-recurring costs such as professional and legal fees associated with our acquisitions and enterprise resource planning (ERP) program. The Company’s management cannot estimate on a forward-looking basis without unreasonable effort the impact these income and expense items will have on its reported net income, operating cash flow and its reported effective tax rate because these items, which could be significant, are difficult to predict and may be highly variable. As a result, the Company does not provide a reconciliation to the most comparable GAAP financial measure for its Adjusted EBITDA or free cash flow outlook or its effective tax rate on operations forecast. Please see the Forward-Looking Statements section of this release for a discussion of certain risks relevant to the Company’s outlook.

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

(in thousands, except per share amounts)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net sales

 

$

4,456,340

 

 

$

4,528,890

 

 

$

8,347,692

 

 

$

8,412,204

 

Cost of sales

 

 

2,993,656

 

 

 

2,933,944

 

 

 

5,585,154

 

 

 

5,445,858

 

Gross margin

 

 

1,462,684

 

 

 

1,594,946

 

 

 

2,762,538

 

 

 

2,966,346

 

Selling, general and administrative expenses

 

 

973,201

 

 

 

1,017,874

 

 

 

1,899,458

 

 

 

1,922,091

 

Income from operations

 

 

489,483

 

 

 

577,072

 

 

 

863,080

 

 

 

1,044,255

 

Interest expense, net

 

 

52,016

 

 

 

53,016

 

 

 

100,352

 

 

 

95,124

 

Income before income taxes

 

 

437,467

 

 

 

524,056

 

 

 

762,728

 

 

 

949,131

 

Income tax expense

 

 

93,377

 

 

 

119,437

 

 

 

159,857

 

 

 

210,726

 

Net income

 

$

344,090

 

 

$

404,619

 

 

$

602,871

 

 

$

738,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.89

 

 

$

3.19

 

 

$

5.00

 

 

$

5.59

 

Diluted

 

$

2.87

 

 

$

3.16

 

 

$

4.95

 

 

$

5.54

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

119,244

 

 

 

126,977

 

 

 

120,608

 

 

 

132,034

 

Diluted

 

 

120,072

 

 

 

128,066

 

 

 

121,721

 

 

 

133,247

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

(in thousands)

 

2024

 

2023

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

344,090

 

 

$

404,619

 

 

$

602,871

 

 

$

738,405

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

143,355

 

 

 

138,966

 

 

 

283,736

 

 

 

275,515

 

Deferred income taxes

 

 

(18,954

)

 

 

(16,433

)

 

 

(27,322

)

 

 

(37,902

)

Stock-based compensation expense

 

 

16,726

 

 

 

12,395

 

 

 

33,626

 

 

 

23,421

 

Other non-cash adjustments

 

 

(164

)

 

 

(841

)

 

 

15

 

 

 

804

 

Changes in assets and liabilities, net of assets acquired and liabilities assumed:

 

 

 

 

 

 

 

 

Receivables

 

 

(172,781

)

 

 

(288,507

)

 

 

(36,145

)

 

 

(179,946

)

Inventories

 

 

77,471

 

 

 

(24,468

)

 

 

(49,236

)

 

 

77,277

 

Contract assets

 

 

(17,622

)

 

 

(14,398

)

 

 

(25,260

)

 

 

(6,815

)

Other current assets

 

 

(2,990

)

 

 

17,509

 

 

 

(10,038

)

 

 

25,652

 

Other assets and liabilities

 

 

(15,943

)

 

 

(15,549

)

 

 

(32,607

)

 

 

(13,815

)

Accounts payable

 

 

(1,800

)

 

 

121,427

 

 

 

141,816

 

 

 

260,972

 

Accrued liabilities

 

 

85,926

 

 

 

61,299

 

 

 

(136,789

)

 

 

(113,695

)

Contract liabilities

 

 

14,770

 

 

 

(4,693

)

 

 

24,604

 

 

 

(4,166

)

Net cash provided by operating activities

 

 

452,084

 

 

 

391,326

 

 

 

769,271

 

 

 

1,045,707

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash used for acquisitions, net of cash acquired

 

 

(74,213

)

 

 

(11,589

)

 

 

(132,918

)

 

 

(90,559

)

Purchases of property, plant and equipment

 

 

(88,107

)

 

 

(125,465

)

 

 

(181,319

)

 

 

(231,110

)

Proceeds from sale of property, plant and equipment

 

 

2,731

 

 

 

4,103

 

 

 

6,298

 

 

 

9,858

 

Cash used for equity investments

 

 

(5,000

)

 

 

 

 

 

(7,686

)

 

 

 

Net cash used in investing activities

 

 

(164,589

)

 

 

(132,951

)

 

 

(315,625

)

 

 

(311,811

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Borrowings under revolving credit facility

 

 

475,000

 

 

 

2,000,000

 

 

 

897,000

 

 

 

2,801,000

 

Repayments under revolving credit facility

 

 

(376,000

)

 

 

(1,524,000

)

 

 

(1,262,000

)

 

 

(2,108,000

)

Proceeds from long-term debt and other loans

 

 

 

 

 

 

 

 

1,000,000

 

 

 

 

Repayments of long-term debt and other loans

 

 

(888

)

 

 

(1,064

)

 

 

(1,767

)

 

 

(2,112

)

Payments of loan costs

 

 

(300

)

 

 

(717

)

 

 

(12,829

)

 

 

(1,897

)

Payment of acquisition-related deferred and contingent consideration

 

 

(622

)

 

 

 

 

 

(9,522

)

 

 

 

Tax withholdings on and exercises of equity awards

 

 

(23,274

)

 

 

(9,490

)

 

 

(54,997

)

 

 

(32,028

)

Repurchase of common stock

 

 

(983,317

)

 

 

(778,195

)

 

 

(1,000,118

)

 

 

(1,381,988

)

Net cash used in financing activities

 

 

(909,401

)

 

 

(313,466

)

 

 

(444,233

)

 

 

(725,025

)

Net change in cash and cash equivalents

 

 

(621,906

)

 

 

(55,091

)

 

 

9,413

 

 

 

8,871

 

Cash and cash equivalents at beginning of period

 

 

697,475

 

 

 

144,407

 

 

 

66,156

 

 

 

80,445

 

Cash and cash equivalents at end of period

 

$

75,569

 

 

$

89,316

 

 

$

75,569

 

 

$

89,316

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(unaudited)

 

(in thousands, except per share amounts)

 

June 30,
2024

 

 

December 31,
2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

75,569

 

 

$

66,156

 

Accounts receivable, less allowances of $45,102 and $42,488, respectively

 

 

1,482,336

 

 

 

1,436,917

 

Other receivables

 

 

292,610

 

 

 

290,310

 

Inventories

 

 

1,289,708

 

 

 

1,228,265

 

Contract assets

 

 

190,937

 

 

 

165,677

 

Other current assets

 

 

123,545

 

 

 

113,403

 

Total current assets

 

 

3,454,705

 

 

 

3,300,728

 

Property, plant and equipment, net

 

 

1,895,966

 

 

 

1,803,824

 

Operating lease right-of-use assets, net

 

 

516,828

 

 

 

502,184

 

Goodwill

 

 

3,598,233

 

 

 

3,556,556

 

Intangible assets, net

 

 

1,174,957

 

 

 

1,298,173

 

Other assets, net

 

 

80,498

 

 

 

37,987

 

Total assets

 

$

10,721,187

 

 

$

10,499,452

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,028,355

 

 

$

881,384

 

Accrued liabilities

 

 

577,342

 

 

 

717,528

 

Contract liabilities

 

 

187,367

 

 

 

162,659

 

Current portion of operating lease liabilities

 

 

96,881

 

 

 

98,217

 

Current maturities of long-term debt

 

 

2,596

 

 

 

3,649

 

Total current liabilities

 

 

1,892,541

 

 

 

1,863,437

 

Noncurrent portion of operating lease liabilities

 

 

452,403

 

 

 

434,081

 

Long-term debt, net of current maturities, discounts and issuance costs

 

 

3,800,897

 

 

 

3,177,411

 

Deferred income taxes

 

 

139,877

 

 

 

167,199

 

Other long-term liabilities

 

 

130,827

 

 

 

124,973

 

Total liabilities

 

 

6,416,545

 

 

 

5,767,101

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value, 10,000 shares authorized; zero shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.01 par value, 300,000 shares authorized; 116,451 and 121,857 shares issued and outstanding at June 30, 2024, and December 31, 2023, respectively

 

 

1,164

 

 

 

1,219

 

Additional paid-in capital

 

 

4,249,572

 

 

 

4,270,948

 

Retained earnings

 

 

53,906

 

 

 

460,184

 

Total stockholders' equity

 

 

4,304,642

 

 

 

4,732,351

 

Total liabilities and stockholders' equity

 

$

10,721,187

 

 

$

10,499,452

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Reconciliation of Adjusted Non-GAAP Financial Measures to their GAAP Equivalents

(unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

Twelve Months Ended

 

June 30,

 

June 30,

 

June 30,

(in millions)

2024

 

2023

 

2024

 

2023

 

2024

Reconciliation to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

GAAP net income

$

344.1

 

 

$

404.6

 

 

$

602.9

 

 

$

738.4

 

 

$

1,405.0

 

Acquisition and related expense

 

1.9

 

 

 

21.9

 

 

 

2.5

 

 

 

27.9

 

 

 

5.6

 

Technology implementation expense

 

17.5

 

 

 

16.0

 

 

 

27.3

 

 

 

26.1

 

 

 

82.6

 

Debt issuance and refinancing cost

 

-

 

 

 

0.7

 

 

 

-

 

 

 

0.7

 

 

 

-

 

Amortization expense

 

81.0

 

 

 

84.8

 

 

 

160.9

 

 

 

169.4

 

 

 

327.2

 

Tax-effect of adjustments to net income

 

(24.1

)

 

 

(29.6

)

 

 

(45.8

)

 

 

(53.8

)

 

 

(99.7

)

Adjusted net income

$

420.4

 

 

$

498.4

 

 

$

747.8

 

 

$

908.7

 

 

$

1,720.7

 

Weighted average diluted common shares

 

120.1

 

 

 

128.1

 

 

 

121.7

 

 

 

133.2

 

 

 

Diluted adjusted net income per share:

$

3.50

 

 

$

3.89

 

 

$

6.14

 

 

$

6.82

 

 

 

Reconciling items:

 

 

 

 

 

 

 

 

 

Depreciation expense

$

62.3

 

 

$

54.1

 

 

$

122.8

 

 

$

106.1

 

 

$

239.3

 

Interest expense, net

 

52.0

 

 

 

52.3

 

 

 

100.4

 

 

 

94.4

 

 

 

197.3

 

Income tax expense

 

117.5

 

 

 

149.0

 

 

 

205.7

 

 

 

264.5

 

 

 

492.5

 

Stock compensation expense

 

16.7

 

 

 

12.4

 

 

 

33.6

 

 

 

23.4

 

 

 

58.7

 

Other management-identified adjustments (1)

 

0.8

 

 

 

2.6

 

 

 

0.3

 

 

 

3.4

 

 

 

0.9

 

Adjusted EBITDA

$

669.7

 

 

$

768.8

 

 

$

1,210.6

 

 

$

1,400.5

 

 

$

2,709.4

 

Adjusted EBITDA margin

 

15.0

%

 

 

17.0

%

 

 

14.5

%

 

 

16.6

%

 

 

15.9

%

 

 

 

 

 

 

 

 

 

 

(1) Primarily relates to severance, net gain/loss on sale of assets, and other one-time costs.

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Financial Data

(unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

(in millions, except per share amounts)

2024

 

2023

 

2024

 

2023

Net sales

$

4,456.3

 

 

$

4,528.9

 

 

$

8,347.7

 

 

$

8,412.2

 

Cost of sales

 

2,993.6

 

 

 

2,934.0

 

 

 

5,585.2

 

 

 

5,445.9

 

Gross margin

 

1,462.7

 

 

 

1,594.9

 

 

 

2,762.5

 

 

 

2,966.3

 

Gross margin %

 

32.8

%

 

 

35.2

%

 

 

33.1

%

 

 

35.3

%

SG&A as a % of sales

 

21.8

%

 

 

22.5

%

 

 

22.8

%

 

 

22.8

%

Adjusted SG&A as a % of sales

 

17.9

%

 

 

18.3

%

 

 

18.7

%

 

 

18.7

%

Adjusted EBITDA

 

669.7

 

 

 

768.8

 

 

 

1,210.6

 

 

 

1,400.5

 

Adjusted EBITDA margin %

 

15.0

%

 

 

17.0

%

 

 

14.5

%

 

 

16.6

%

Depreciation expense

 

(62.3

)

 

 

(54.1

)

 

 

(122.8

)

 

 

(106.1

)

Interest expense, net of debt issuance and refinancing costs

 

(52.0

)

 

 

(52.3

)

 

 

(100.4

)

 

 

(94.4

)

Income tax expense

 

(117.5

)

 

 

(149.0

)

 

 

(205.7

)

 

 

(264.5

)

Other adjustments

 

(17.5

)

 

 

(15.0

)

 

 

(33.9

)

 

 

(26.8

)

Adjusted net income

$

420.4

 

 

$

498.4

 

 

$

747.8

 

 

$

908.7

 

Basic adjusted net income per share:

$

3.53

 

 

$

3.93

 

 

$

6.20

 

 

$

6.88

 

Diluted adjusted net income per share:

$

3.50

 

 

$

3.89

 

 

$

6.14

 

 

$

6.82

 

Weighted average common shares

 

 

 

 

 

 

 

Basic

 

119.2

 

 

 

127.0

 

 

 

120.6

 

 

 

132.0

 

Diluted

 

120.1

 

 

 

128.1

 

 

 

121.7

 

 

 

133.2

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Interest Reconciliation

(unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30, 2024

 

June 30, 2024

(in millions)

Interest
Expense

 

Net Debt
Outstanding

 

Interest
Expense

 

Net Debt
Outstanding

2032 Unsecured notes @ 4.25%

$

13.8

 

 

$

1,300.0

 

 

$

27.6

 

 

$

1,300.0

 

2032 Unsecured notes @ 6.375%

 

11.2

 

 

 

700.0

 

 

 

22.3

 

 

 

700.0

 

2030 Unsecured notes @ 5.00%

 

6.9

 

 

 

550.0

 

 

 

13.8

 

 

 

550.0

 

2034 Unsecured notes @ 6.375%

 

15.9

 

 

 

1,000.0

 

 

 

21.4

 

 

 

1,000.0

 

Revolving credit facility @ 8.10% weighted average interest rate

 

2.0

 

 

 

99.0

 

 

 

7.3

 

 

 

99.0

 

Amortization of debt issuance costs, discount and premium

 

1.4

 

 

 

-

 

 

 

2.7

 

 

 

-

 

Finance leases and other finance obligations

 

5.1

 

 

193.8

 

 

 

9.9

 

 

193.8

 

Cash

 

-

 

 

 

(75.6

)

 

 

-

 

 

 

(75.6

)

Total (1)

$

56.3

 

 

$

3,767.2

 

 

$

105.0

 

 

$

3,767.2

 

 

 

 

 

 

 

 

 

(1) Total interest expense does not include interest income of approximately $4 million received during the period.

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Free Cash Flow

(unaudited)

 

 

Three Months Ended

 

Six Months Ended

(in millions)

June 30, 2024

 

June 30, 2024

Free Cash Flow

 

Operating activities

$

452.1

 

 

$

769.3

 

Less: Capital expenditures, net of proceeds

 

(85.4

)

 

 

(175.0

)

Free cash flow

$

366.7

 

 

$

594.3

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Sales by Product Category

(unaudited)

 

Three Months Ended June 30,

 

2024

 

2023

 

 

(in millions)

Net Sales

 

% of
Net Sales

 

Net Sales

 

% of
Net Sales

 

% Change

Manufactured products

$

1,054.9

 

 

 

23.7

%

 

$

1,294.2

 

 

 

28.6

%

 

 

(18.5

)%

Windows, doors & millwork

$

1,115.4

 

 

 

25.0

%

 

$

1,091.9

 

 

 

24.1

%

 

 

2.2

%

Value-added products

 

2,170.3

 

 

48.7

%

 

 

2,386.1

 

 

52.7

%

 

 

(9.0

)%

 

 

 

 

 

 

 

 

 

 

Specialty building products & services

 

1,091.2

 

 

 

24.5

%

 

 

1,082.4

 

 

 

23.9

%

 

 

0.8

%

Lumber & lumber sheet goods

 

1,194.8

 

 

 

26.8

%

 

 

1,060.4

 

 

 

23.4

%

 

 

12.7

%

Total net sales

$

4,456.3

 

 

 

100.0

%

 

$

4,528.9

 

 

 

100.0

%

 

 

(1.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

2024

 

2023

 

 

(in millions)

Net Sales

 

% of
Net Sales

 

Net Sales

 

% of
Net Sales

 

% Change

Manufactured products

$

2,034.3

 

 

 

24.4

%

 

$

2,357.2

 

 

 

28.0

%

 

 

(13.7

)%

Windows, doors & millwork

 

2,146.1

 

 

 

25.7

%

 

 

2,170.4

 

 

 

25.8

%

 

 

(1.1

)%

Value-added products

 

4,180.4

 

 

 

50.1

%

 

 

4,527.6

 

 

 

53.8

%

 

 

(7.7

)%

 

 

 

 

 

 

 

 

 

 

Specialty building products & services

 

1,991.9

 

 

 

23.8

%

 

 

1,947.4

 

 

 

23.2

%

 

 

2.3

%

Lumber & lumber sheet goods

 

2,175.4

 

 

 

26.1

%

 

 

1,937.2

 

 

 

23.0

%

 

 

12.3

%

Total net sales

$

8,347.7

 

 

 

100.0

%

 

$

8,412.2

 

 

 

100.0

%

 

 

(0.8

)%

 

Heather Kos

SVP, Investor Relations

Builders FirstSource, Inc.

investorrelations@bldr.com

Source: Builders FirstSource, Inc.

FAQ

What were Builders FirstSource's net sales for Q2 2024?

Net sales for Q2 2024 were $4.5 billion, reflecting a 1.6% decrease year-over-year.

How did Builders FirstSource's net income perform in Q2 2024?

Net income for Q2 2024 was $344.1 million, a decrease of 15% compared to the same period in the previous year.

What was Builders FirstSource's adjusted EBITDA for Q2 2024?

Adjusted EBITDA for Q2 2024 was $669.7 million, a decrease of 12.9% year-over-year.

How many shares did Builders FirstSource repurchase in Q2 2024?

Builders FirstSource repurchased 5.8 million shares of common stock in Q2 2024.

What are Builders FirstSource's projections for net sales in 2024?

Builders FirstSource projects net sales for 2024 to be in the range of $16.4 billion to $17.2 billion.

Builders FirstSource, Inc.

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