Specialty dealer Foundation Building Materials (FBM) posted strong growth in net sales and net income during the first quarter of 2019. Tustin, Calif-based FBM recorded net sales of $514.9 million in the first quarter, an 11.0% increase year over year compared to the first quarter of 2018, according to the company’s first quarter earnings report. After posting a net loss from continuing operations of $2.3 million in the first quarter of 2018, FBM recorded a net income of $4.8 million in the first quarter of 2019.
FBM’s net sales from base business contributed $460.9 million to total net sales, an increase in 6.8% compared to the prior year period. Average daily base business net sales for FBM grew 8.5% according to the dealer, driven largely by strong commercial activity and product expansions into new geographic markets. FBM anticipates its February acquisition of Builders’ Supplies Limited will contribute between $20 million to $24 million to net sales.
“We delivered strong first quarter net sales and base business growth, reflecting our continued momentum in the commercial end market,” Ruben Mendoza, president and CEO, said in a public statement. “We are well on our way to achieving our strategic goals, including reducing our debt leverage and growing our profitability.”
FBM, the 10th largest company on the 2018 ProSales 100, reported an adjusted net income for the first three months of 2019 as $6.1 million, a $7.2 million increase year over year.
The specialty dealer’s gross profit for the first quarter was $153.0 million, a 13.8% increase from its 2018 first quarter gross profit of $134.4 million. FBM attributed the increase in gross profit to its increase in sales volume, contributions from acquisitions, and base business growth. The company’s gross margin for the first quarter was 29.7%, up 0.70% year over year. The dealer attributed the increase in margin to the “continued stabilization” of product costs and “a shift in product mix.”
FBM’s adjusted EBITDA for the first quarter was $37.5 million, with a margin of 7.3%, both healthy increases from the first quarter in 2018.
FBM’s balance sheet as of March 31, 2019 shows goodwill accounts for $487.9 million of the company’s $1.43 billion in total assets.
