BMC Stock Holdings benefited from significant growth in its structural components and Ready-Frame sales to increase its net sales by 12.4% in the third quarter when compared to the year-earlier period. The dealer reported net sales of $990.3 million in its third quarter earnings report. BMC also reported a net income of $35.9 million, a $17.4 million increase compared to the third quarter in 2017.
The company said the sales growth was partially driven by the 15% growth in the structural components value-added product category and the 11.4% growth in the millwork, doors, and windows. Net sales of its Ready-Frame system increased 38.4% to $65 million. BMC estimates that net sales increased 6.3% from higher selling prices of lumber and lumber sheet goods, 4.0% from other organic growth, and 2.1% from the acquisition of Shone Lumber in February. The dealer also estimated that net sales to single-family home builders increase 13% and sales to remodeling contractors increased 15.1%.
BMC’s gross profit increased 152.% to $241.3 million, inching up the dealer’s gross margin to 24.4% of sales, up 0.6 points from the same period in 2017. BMC measures itself through EBITDA—earnings before interest, taxes, depreciation, amortization, merger and integration costs, non-cash stock compensation expenses, acquisition costs, and other items. This metric rose 25.4% to $74.4 million when compared to the year-earlier period. The adjusted EBITDA margin worked out to 7% of net sales, an increase of 80 basis points according to BMC.
The third quarter marked the first earnings report since new president Dave Flitman was appointed. Flitman, a former president and CEO of Performance Food Group, joined BMC on September 26, after nearly five months had passed since previous President and CEO Peter Alexander departed.
The company’s balance sheet shows goodwill accounted for $264.3 million of its $1.62 billion in assets as of September 30, 2018. Long-term debt accounted for $345.1 million of the company’s liabilities.
