BFS Increases Manufactured Product Sales by 16.8%
Builders FirstSource reported a very strong fourth quarter in 2020, thanks primarily to high lumber costs and a healthy housing market. During their earnings call on Friday with investors, BFS revealed their value-added core organic sales grew by an estimated 10.8%, led by 16.8% growth in their manufactured products category.
Overall, fourth quarter net sales totaled $2.5 billion, an increase of 43.5% compared to the prior year period. Core organic sales increased 15.0%, excluding acquisitions and commodity impacts. Commodity inflation increased net sales 26.5%, while acquisitions contributed to net sales growth of 2.0%.
The company’s fourth quarter gross profit was $669.2 million, an increase of 40.4% compared to the prior year period. Net income was $139.9 million and adjusted net income of $149.0 million. Most notably, adjusted EBITDA more than doubled to $257.1 million, driven by solid demand across all three customer end markets and commodity inflation. On the balance sheet, BFS reported a net debt to LTM Adjusted EBITDA ratio of 1.7x, and liquidity of $1.2 billion.
On January 1, 2021, Builders FirstSource completed its transformational merger with BMC Stock Holdings (“BMC”) in an all-stock transaction, creating the nation’s premier supplier of building materials and services. As a result, the fourth quarter and full-year results do not include the financial results of BMC.
Chad Crow, outgoing CEO of Builders FirstSource, commented, “Record fourth quarter results reflect an exceptional finish to a year of remarkable performance, despite the challenges in 2020. 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.”
Dave Flitman, President of Builders FirstSource who will succeed Mr. Crow as CEO on April 1, said, “On a pro forma basis, our combined companies achieved outstanding top and bottom-line performance in 2020, including $12.8 billion in net sales and over $1 billion of Adjusted EBITDA. Our integration efforts are progressing very well against our plan and we remain confident in delivering our expected run rate cost savings of $130 million to $150 million by the end of 2023.”
Peter Jackson, CFO of Builders FirstSource, said, “We entered 2021 with a strong foundation for our best-in-class solutions to thrive, underpinned by a pro forma leverage ratio for our combined companies of 1.3 times and free cash flow in excess of $286 million. We continue to evaluate opportunities to leverage the strength of our balance sheet as our debt falls. Looking ahead, we expect favorable market tailwinds from continued robust new single-family home demand to drive additional growth, and cash generation.”