Builders FirstSource (BFS), the nation’s biggest full-service lumberyard, reported today its net income shot up to $23.2 million in the first quarter from $3.8 million in the year-earlier period on a 10.9% rise in net sales to $1.7 billion.
Noting it had one fewer sales day in 2018 than 2017, BFS said sales per day rose 12.7%. Of that, 9.6 percentage points of growth were credited to higher lumber prices and 3.1 points were due to increased sales volume.
Gross margin increased 9.3% to $411.1 million at the No. 2 company on the ProSales 100, but the gross margin percentage slipped to 24.2% from 24.5% in the January-to-March 2017 quarter. BFS said the runup in commodity prices relative to short-term customer pricing commitments damped its margins for the quarter, but it expects to see benefits over time.
On the brighter side, selling, general, and administrative expenses slipped to 21.1% of sales from 21.9% to total $358.9 million. “Cost leverage and continued cost management” and a $4.2 million one-time decrease in insurance and benefits expenses were partially offset by $4.6 million worth of growth initiatives.
BFS likes to measure itself using adjusted EBITDA–earnings before interest, taxes, depreciation, amortization, stock compensation expenses, gains or losses on sale and asset impairments, integration-related expanses, debt issuances, and refinancing costs. By that metric, the company’s adjusted EBITDA rose to $82.6 million in the quarter (4.9% of revenue) from a year-earlier $76.1 million (5.0%).
“We have once again demonstrated our ability to deliver robust sales and EBITDA growth in a volatile market while executing on our strategic priorities and investing in our future,” CEO Chad Crow said in a news release.
On a GAAP accounting basis, the net profit margin was 1.3% of revenues. Adjusted net income jumped to $27.6 million from $12.1 million.
The company’s balance sheet shows goodwill provides $740.4 million of the dealer’s $3.11 billion in assets. Meanwhile, the liability side shows $1.93 billion worth of long-term debt.
