BMC Stock Holdings experienced significant growth in net profit year over year (YOY) in the fourth quarter of 2018 and saw healthy growth in net sales, the company reported in its fourth quarter earnings report. The Raleigh, N.C.-based dealer reported a net income of $28.1 million in the fourth quarter, a 59.4% increase YOY. BMC posted a net income of $119.7 million for the full year, more than doubling its net income of $57.4 million in 2017.
The dealer also recorded net sales of $859.5 million in the fourth quarter, a 2.2% increase YOY. The company estimates net sales increased 1.6% from an additional selling day versus Q4 2017, 1.9% from the acquisition of Shone Lumber, and less than a percentage point from organic growth. The growth in net sales for the quarter were partially offset by lumber and lumber sheet good commodity price deflation and the disposition of the company’s Coleman Floor business in November.
BMC estimates net sales to single-family builders rose 1.2% in the quarter and net sales to remodeling contractors declined 1.1%. Net sales for the company’s Ready-Frame product line increased nearly 30% YOY to $58.2 million in the fourth quarter.
For the full year period, BMC’s net sales increased 9.4% YOY to $3.7 billion. Around 2% of the growth for the full year came from organic growth and recent acquisitions by BMC, respectively, according to the dealer. The dealer’s Structural Components division experienced net sales growth of 19% for the full year, driven by the 26.4% increase in Ready-Frame sales in 2018.
“2018 marked a year of record results in which our team accelerated momentum across all areas of our business,” president and CEO Dave Flitman said in a public statement. “In addition, we delivered valuable improvements in both safety and customer service. Our team launched a first-of-its-kind innovation in truss manufacturing and announced the planned addition of more of these automated truss lines in the coming months.”
BMC’s gross profit in the fourth quarter increased 16.9% to $229.2 million, boosting the company’s gross margin to 26.7% of sales, up 3.4 percentage points from the fourth quarter of 2017. BMC likes to measure itself through EBITDA—earnings before interest, taxes, depreciation, amortizations, merger and integration cost, non-cash stock compensation expenses, acquisition costs, and other items. This metric rose $17.9 million to $65.5 million in the fourth quarter. The adjusted EBITDA margin worked out to 7.6%, an increase of 1.9% according to BMC.
For the full-year period, BMC’s gross profit rose 14.3% to $909.2 million, with a gross margin of 24.7%. Adjusted EBITDA for the full year increased $65.9 million to $265.9 million and the margin increased 1.3% to 7.2%.
BMC completed the sale of its non-core Coleman Floor business in November. The net sales of the Coleman Floor business represented approximately 1% of BMC’s net sales, according to the company. The recent acquisitions of Barefoot & Lumber Company and Locust Lumber generated an approximate addition of $105 in 2018 net sales, according to BMC.
The company’s balance sheet shows goodwill accounted for $263 million of its $1.6 billion in assets as of December 31, 2018. Long-term debt account for $345.2 million of the company’s liabilities.
