BFS Reports 2.2% Q3 Growth in Manufactured Sales

Originally published by: ProSales MagazineNovember 3, 2020

The following article was produced and published by the source linked to above, who is solely responsible for its content. SBC Magazine is publishing this story to raise awareness of information publicly available online and does not verify the accuracy of the author’s claims. As a consequence, SBC cannot vouch for the validity of any facts, claims or opinions made in the article.

Builders FirstSource (BFS) reported net sales grew 15.9% on a year-over-year (YOY) basis to $2.3 billion in the third quarter. Core organic sales for the Dallas, Texas-based dealer increased 6.7% YOY while commodity inflation added 7.2% to net sales, according to the company’s quarterly earnings report.

Builders FirstSource logo

BFS reported value-added core organic sales grew 1.9% YOY, led by 2.2% growth in the manufactured products category and 1.5% growth in the windows, doors, and millwork categories. The dealer said continued weakness in markets in the northeast were offset by solid national growth. The company also reported demand increased during the third quarter across all customer end markets—single-family, repair and remodel and multifamily—with the multifamily market segment experiencing the largest increase in demand.

“Our third quarter 2020 results reflect our team’s collective efforts to execute our strategic plan, which led to record sales and adjusted EBITDA,” CEO Chad CRow said in a news release. “These exceptional results were underpinned by strong demand for our integrated services and by our team’s ability to react quickly to market fluctuations, including the sharp rise in lumber costs.”

BFS reported net income increased $7.8 million on a YOY basis to $85.9 million in the third quarter. Adjusted EBITDA increased 15% YOY to $184 million, driven by solid demand across all three BFS customer end markets and “disciplined pricing,” according to the company.

The dealer reported a gross margin of $570.7 million in the third quarter, an increase of $29.5 million from the prior-year period. The company’s gross margin percentage decreased to 27.3% from 24.9%. BFS attributed the decrease in gross margin percentage to the sharp rise in commodity prices during the quarter.

In addition to the strong financial results, BFS also entered a definitive merger agreement with BMC Holdings in the third quarter. The transaction is expected to close in late 2020 or early 2021. Combined, the companies will create a building materials supplier with over $11 billion in annual sales and a network of 550 distribution and manufacturing locations across 42 states.

BFS third quarter results