Net sales at Builders FirstSource (BFS) increased 36.1% year-over-year (YOY) in the first quarter of 2022, driven by double-digit core organic growth, commodity inflation, and acquisitions, according to the company’s quarterly earnings report.
According to the dealer, core organic sales in value-added products increased by an estimated 30.8% compared with the prior year period in the first quarter. Demand for single-family continues to drive to-line sales growth, with core organic growth for the single-family segment growing 16.6% YOY in the first quarter for BFS. The repair and remodel segment experienced 9.5% YOY growth and the multifamily segment experienced 10.2% YOY core organic growth.
“We started the year out strong achieving another quarter of record net sales, gross margin, and adjusted EBITDA, while also producing strong core organic sales growth of 15%,” BFS president and CEO Dave Flitman said in a prepared statement. “In addition, we continue to make progress investing prudently in our operations and delivering outstanding service to our customers as we work to overcome the supply chain constraints that persist throughout our industry.
BFS reported a gross profit of $1.8 billion in the first quarter of 2022, a 71.3% increase compared to the prior year quarter. The dealer’s gross profit margin percentage increased 670 basis points YOY to 32.3% in the first quarter, primarily driven by disciplined pricing in a volatile, supply-constrained marketplace, as well as effective and timely sourcing of materials, according to BFS.
The dealer reported net income increased from $172.6 million in the first quarter of 2021 to $639.6 million in the first quarter of 2022. BFS said the increase in net income was driven by the increase in net sales and gross margin. The company’s adjusted EBITDA increased 119.8% to $1.0 billion, driven by solid demand across key customer end-markets, commodity inflation, pricing, and acquisitions, according to BFS. Adjusted EBITDA margin increased 670 basis points YOY to 17.6% in the first quarter.
“We are pleased with our remarkable first quarter results as well as our continued M&A momentum,” CFO Peter Jackson said. “We remain committed to a balanced approach to capital deployment through 2022 and beyond as we leverage our strong cash flow to pursue additional accretive investments in our operations while executing against our share repurchase authorizations.”
Since closing its mega-merger with BMC on January 1, 2021, BFS has made “substantial progress in integrating the two companies while delivering solid execution,” according to the company. BFS delivered approximately $55 million in cost synergies to the profit and loss statement in the first quarter and the company said it believes it will deliver over $100 million in productivity savings in 2022.
BFS acquired Texas Panel Truss, East Panel Truss, and Valley Truss on April 1, 2022. Texas Panel Truss and East Panel Truss (collectively “Panel Truss”) is a provider of building components to single-family and multifamily markets in the south and southeast. BFS said the acquisition will provide the company with additional component capacity in high-growth southern markets. The Panel Truss businesses had approximately $138 million in sales in 2021. Valley Truss is a provider of building components to the single-family and multifamily markets in Boise, Idaho. The company generated sales of approximately $26 million in 2021.
“We are excited to welcome the Panel Truss and Valley Truss team members to the Builders FirstSource family and look forward to their contributions to grow our value-added products business,” Flitman said. “Looking ahead, we believe the housing industry remains resilient and underbuilt, and we have seen strong underlying demand in new housing construction into the second quarter. Furthermore, we are maintaining our focus on allocating resources to outpace market growth in our higher margin value-added products while investing further in our digital solutions platform to advance our goal of transforming the home building industry.”
