Builders FirstSource sees post-acquisition bump in Q3
Builders FirstSource, Inc. is seeing the numbers from its recent ProBuild acquisition.
The company netted a 37% sales increase over the three months ended Sept. 30, largely due to the transaction.
"Integration efforts continue to progress as expected, creating approximately $20 million in savings in the quarter and almost $60 million year to date, before one time cost to implement," said CEO Floyd Sherman.
"Despite labor constraints which continue to slow construction activity, we grew Pro Forma sales volume in the quarter by 1% in the new residential construction end market, excluding the impact of commodity inflation. This is compared to the total national housing start decline year over year of 2% (comprised of 2% growth in single family starts and 9% contraction in multi-family starts). We also increased sales in the repair and remodeling end market by 3%. In addition, sales in our value-added categories of prefabricated components, windows, doors, and millwork grew 4% versus Pro Forma 2015.”
Net sales for the quarter totaled $1.7 billion, up from $1.3 billion during the same period last year.
Gross margin also increased by $112.3 million to $437.1 million, largely due to ProBuild.
The acquisition also helped put the company solidly in the black. Net income came in at $125.5 million, up from a net loss of $8.7 million in 2015.
“I am confident in the outlook for our business," added Sherman. "I believe the housing industry remains on a trajectory of steady growth, albeit hampered in the short term by construction labor availability."
"The competitive environment has also intensified in select regions of the country, but we believe our integrated approach and significant scale allow us to respond more effectively than our competitors to service the homebuilder. We are executing our strategy and managing what is in our control, and I am very pleased with the progress we have made to date on integrating our company. We are confident in our cost savings actions that are on target to achieve $100 - 120 million of annual cost savings before one-time integration expenses."