Builders FirstSource (BFS) reported strong financial results in the third quarter of 2021, bolstered by the dealer’s acquisition of BMC Holdings in January 2021. Net sales in the third quarter, including numbers from BMC, were $5.5 billion, an increase of 140.0% on a year-over-year (YOY) basis compared to the third quarter of 2020, excluding sales numbers from BMC. On a pro forma basis, sales increased 62.7% compared to the combined pro forma third quarter of 2020, according to the company’s earnings report.
On a pro forma basis, commodity inflation increased net sales 38.6% YOY while core organic sales increased 16.1% YOY. Value-added core organic sales grew by an estimated 31.2% on a pro forma basis YOY, led by 44.6% growth in the dealer’s manufactured products category. BFS said “robust” demand was hindered nationally by material availability constraints in the quarter. The company said demand in the single-family housing segment continued to drive top-line growth, while core organic customer growth decreased in both the multi-family and remodeling segments.
“I couldn’t be more proud of our team’s effort and hard work that have resulted in record third quarter and first nine months earnings for Builders FirstSource,” CEO Dave Flitman said in a prepared statement. “We delivered above market core organic growth of 16.1%, along with record gross profit, adjusted EBITDA, adjusted EBITDA margin of 17.7% and free cash flow of $1.1 billion. Our team is executing at a very high level as we continue to outperform the market, especially given the strong demand environment couple with unprecedented supply chain challenges that have continued to affect the homebuilding industry.”
BFS reported gross profit of $1.7 billion in the third quarter of 2021, an increase of $868.3 million compared with the combined pro forma prior year period. The company’s gross margin increased 620 basis points YOY to 31.1%, primarily driven be disciplined pricing as well as effective and timely sourcing, according to the company.
The dealer’s net income increased from $130.8 million to $613.1 million on a combined pro forma basis. The increase in net income was driven by the company’s increased in net sales and gross margin, according to BFS. The company reported its adjusted EBITDA increased 244.4% YOY on a combined pro forma basis to $975.9 million while adjusted EBITDA margin improved to a record 17.7%.
“We remain focused on executing our strategy of investing both organically and through M&A to continue to enhance our portfolio of value-added offerings and faster-growth categories,” Flitman said. “We are excited to welcome the California TrusFrame teams to Builders FirstSource, adding substantial and profitable scale to our value-added products business on the west coast. In addition, the BMC integration continues to progress exceptionally well, and our realization of cost synergies remains ahead of schedule.”
