Builders FirstSource drives big sales in Q3

Builders FirstSource reported third quarter sales increased 140% to $5.5 billion, driven by the company’s merger with BMC, commodity inflation, and organic growth.

Core organic sales increased 16.1%, excluding commodity inflation and acquisition impacts. Acquisitions, excluding the BMC merger, provided 8% sales growth.

Commodity inflation contributed a 38.6% increase in net sales, the company reported.

The Dallas, Texas-based company also posted a net income of $613 million for the period. Builders FirstSource reported a pro forma net income of $130.8 million for the same period a year ago.

During the quarter, Builders FirstSource repurchased nearly 11 million shares of its common stock at an average price of $52.74, for a total cost of approximately $578 million.

Looking ahead, Builders FirstSource expects 2021 year-end net sales to grow to a range of $19.3 billion to $19.8 billion or approximately 51% to 55% over 2020 combined pro forma net sales of $12.8 billion.

The pro dealer was active in the third quarter, both selling and acquiring assets.

In July, the company sold its Easter U.S. gypsum distribution business to L&W Supply for $76.2 million. 

In September, BuildersFirst Source acquired California TrusFrame, LLC (CTF) for $193.4 million. Prior to the move, CTF was the largest independent producer of value-added building products in California. CTF reported trailing twelve months’ sales of approximately $143.2 million as of July 31, 2021.

Additionally, Builders FirstSouce acquired the Apollo software assets from construction technology startup Katerra for approximately $4.5 million. The Apollo platform provides design collaboration and workflow, construction budgeting and scheduling, and field task assignment with mobile functionality.

BuildersFirstSource operates about 550 locations in 39 states.

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The Bottom Line: Commodity inflation, organic sales, and a super-merger with BMC drive sales up 140% to $5.5 billion as earnings reach $613 million.

What the CEO said: “We delivered above market core organic growth of 16.1%, along with record gross profit, adjusted EBITDA, adjusted EBITDA margin of 17.7% and free cash flow of $1.1 billion,” said Dave Flitman, CEO and president of Builders FirstSource. “Our team is executing at a very high level as we continue to outperform the market, especially given the strong demand environment coupled with unprecedented supply chain challenges that have continued to affect the home building industry.”

“In addition, the BMC integration continues to progress exceptionally well, and our realization of cost synergies remains ahead of schedule. Looking to the remainder of the year, we continue to expect both strong demand in single-family housing and solid execution of our strategy to drive above market growth, all of which are reflected in our upwardly revised 2021 outlook.”

Company info: Click here to read the full third quarter 2021 financial report from Builders FirstSource