Specialty dealer Foundation Building Materials (FBM) posted an increase in net sales and net income during the third quarter of 2019. The dealer reported net sales grew 4.2% year over year (YOY) to $564.9 million, while base business net sales increased 1.1% YOY to $500.8 million. The dealer attributed the growth in sales to strong commercial market activity and product expansion into new markets, according to FBM’s third quarter earnings report.
Tustin, Calif.-based FBM also posted a net income of $12.7 million, an increase of $50.3 million YOY after posting net losses of $37.6 million in the same period a year ago.
“Our strong underlying profitability was the key driver of our third quarter results,” Ruben Mendoza, president and CEO of FBM, said in a public statement. “Despite continuing softness in Canadian markets and adverse weather affecting our net sales, we continue to see solid demand in our core non-residential construction markets, and we are on track to meet our financial objectives for the year.”
Gross profit during the third quarter grew $17.8 million YOY to $171.8 million. FBM attributed the growth in gross profit to an expansion of the company’s gross margin and increase in sales from acquisitions. FBM’s third quarter gross margin rose 2.0% YOY to 30.4%, driven primarily by improved profitability across product lines. FBM’s adjusted EBITDA for the third quarter increased to $50.0 million and the dealer’s adjusted EBITDA margin increased 0.8% YOY to 8.9%.
In the third quarter, FBM completed two acquisitions expected to contribute between $2.8 million and $3.2 million in net sales. The dealer acquired Colorado Springs, Co.-based Joe’s Wallboard Supply and Lakewood, Wash.-based The Supply Guy in October.
The dealer’s balance sheet as of Sept. 30, 2019 shows goodwill accounts for $490.3 million of the company’s $1.4 billion in total assets.
FBM ranked 9th on the 2019 ProSales 100.
