Builders FirstSource turns in banner Q4
A healthy residential construction market and strong lumber prices helped propel Builders FirstSource to a banner fourth quarter.
The nation’s largest pro dealer, recently completing a mega merger with BMC Stock Holdings, reported fourth quarter sales jumped 43.5% to $2.53 billion from fourth quarter 2019 sales of $1.76 billion.
Core organic sales at Builders FirstSource rose 15% for the period, excluding acquisitions and commodity impacts. Commodity inflation increased net sales 26.5% as acquisitions contributed 2% sales growth.
Pro forma sales, including BMC, leaped 41.5% to $3.75 billion for the fourth quarter from sales of $2.65 billion.
For the full year net sales reached a company record of $8.6 billion, rising 17.6% from net sales of $7.28 billion in 2019.
Acquisitions and core organic growth contributed 2.5% and 5.6% of the increase, the Dallas, Texas-based company reported. Commodity inflation and one additional selling day increased net sales by 9% and 0.5% for the year.
Fiscal pro forma sales reached $12.8 billion, rising more than 17% from sales of $10.9 billion in 2019.
Builders FirstSource posted a net income of $140 million for the fourth quarter, marking a massive increase from a net income of $41.4 million in the prior fourth quarter. The company reported a net income of $313.5 billion for the full year, soaring 41% from a net income of $221.8 million in the prior year.
Looking ahead, Builders FirstSource expects to see net sales to grow to a range of $13.9 billion to $14.6 billion or approximately 9% to 14% over its 2020 pro forma net sales of $12.8 billion.
Builders FirstSource and BMC completed their super merger on Jan. 4. The combined company now operates about 550 locations in 40 states, including 46 of the top metro markets.
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The Bottom Line: Builders FirstSource reports nearly $100 million in additional net income for the fourth quarter as sales soar more than 43% for the quarter.
What the CEO said: “Record fourth quarter results reflect an exceptional finish to a year of remarkable performance, despite the challenges in 2020,” said Chad Crow, CEO of Builders FirstSource. “Solid momentum from the continued execution of our strategic plan combined with strong residential market tailwinds positions Builders FirstSource to accelerate its success through the recently completed combination with BMC. The combined company provides a broader platform for growth including a deepened presence in the top housing markets across the nation.”
“It has been my absolute pleasure to help build this great company over the past 21 years, and I believe that Dave Flitman’s proven ability to drive sustainable growth with a defined vision will lead to further value creation for our shareholders in the quarters and years to come,” Crow said.
Dave Flitman, previously the CEO of BMC, will become the next CEO of the combined company beginning April 1 with Crow retiring on that date.
“We are very excited about our merger, which was overwhelmingly approved by the shareholders of both companies and positions us with a long runway of growth well into the future," Flitman said. "I want to thank Chad for his partnership in creating the premier specialty building materials distributor in the U.S."
Flitman notes that the company expects to see cost savings of $130 million to $150 million by 2023.
"I look forward to working with our more than 26,000 team members to execute our strategy and foster a culture where we live our values of safety, people, integrity, customers and excellence," he said.
Company info: Click here to read the fourth quarter and fiscal 2020 report from Builders FirstSource.