Builders FirstSource rides strong demand
A mega merger with BMC, commodity inflation and basic LBM blocking and tackling propelled Dallas-based Builders FirstSource to a record second quarter.
Among the highlights:
• Net sales of $5.6 billion for the quarter increased 186.6% driven by the merger with BMC, commodity inflation, and strong organic growth.
• Gross profit of $1.6 billion increased 206.0% driven by the merger with BMC, commodity inflation, and double-digit organic growth.
• Net income for the company grew to $497.2 million, up from $122.5 million in the prior-year quarter.
Dave Flitman, CEO of Builders FirstSource, gave credit to the effort and execution of the 26,000 employees. He also pointed to core organic sales growth of 35% along with record gross profit, adjusted EBITDA and margin.
"Our strong results accelerated in the second quarter as we continued to expand our value-added offerings while maintaining our focus on operational excellence and providing outstanding customer service.” Flitman said. “Demand in single-family housing remains exceptionally strong and we continue to capitalize on this positive trend while ensuring we meet the needs of our customers."
Looking ahead, the company expects net sales to grow to a range of $18 billion to $19 billion, representing a 41% to 48% gain over the combined net sales of BMC and BFS in 2020.
Builders FirstSource completed its acquisition of BMC Stock Holdings back in January. And it has been on a steady run of M&A activity in 2021.
• On May 3, 2021, BFS completed the acquisition of John’s Lumber, a premier building materials supplier serving the largest housing markets in Michigan. The acquisition adds another top 50 Metropolitan Statistical Area (MSA) to the Company’s portfolio and provides enhanced scale that will benefit our existing 14 locations in the state.
• On June 29, 2021, the company entered into a definitive agreement to acquire WTS Paradigm, a software solutions and services provider for the building products industry. The acquisition is an important step forward in Builder FirstSource’s strategy to invest in innovative digital solutions that will help its customers build more efficiently. Paradigm serves hundreds of customers, including manufacturers, retailers, dealers, homebuilders and remodelers
• On July 1, 2021, BFS completed the acquisition of Alliance Lumber, the largest independently operated supplier of building materials in Arizona, primarily serving the greater Phoenix, Tucson, and Prescott Valley metropolitan areas. As a leading regional supplier with strategically located facilities, Alliance is uniquely positioned to offer unmatched distribution throughout the highest-growth regions of Arizona with a comprehensive portfolio of premium building materials.
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Access the complete second-quarter earnings release here.