BMC Stock Holdings posted solid year-over-year (YOY) growth in both net sales and net income during the fiscal first quarter of 2020. Net sales increased 11.6% YOY to $920.9 million for BMC in the first quarter, while net income increased to $22.0 million in the first quarter from $20.4 million in the year-earlier period.
BMC said net its sales increase in the quarter was driven by growth from acquisitions of 6.0% YOY, core organic growth of 5.3% YOY, and growth of 1.7% YOY due to an extra selling day. The increases were partially offset by a 0.7% decrease YOY due to price deflation and the impact of a closed location of 0.7%.
BMC’s gross profit increased 9.7% YOY in the first quarter to $237.1 million. Gross profit as a percentage of sales decreased 40 basis points to 25.8% in the first quarter of 2020. The decrease in gross margin was driven by a decrease in the gross margin in the lumber and lumber sheet goods and structural components product categories, which benefited from unusually high commodity price-related gross margins during the first quarter of 2019, according to BMC.
“We were very pleased with our first quarter results, which exceeded our expectations and capitalized on a strong pipeline of construction activity and continued momentum in our value-added products and services,” BMC president and CEO Dave Flitman said in a prepared statement. “However, due to the COVID-19 pandemic, our focus quickly turned to the safety and well-being of our associates and their families while meeting the critical product and service needs of our customers.”
BMC’s adjusted EBITDA in the first quarter was $61.0 million, a 12.1% increase from the first quarter of 2019. Adjusted EBITDA margin was unchanged from the first quarter of 2019, remaining at 6.6%.
“We have taken numerous steps across our local operations to help protect our associates and customers, accelerate productivity gains while reducing our operating expenses and capital expenditures, and increase our company’s financial flexibility. Our team is focused on protecting the assets of the company, while not losing sight of executing our long-term strategic objectives.”
Over the course of the past two months, Raleigh, N.C.-based BMC has taken numerous steps to protect its associates and customers from the coronavirus (COVID-19) pandemic. The dealer created a cross-function task force that meets daily in mid-March to ensure the company is responding with the development of necessary processes, protocols, training, and communications related to its response. The company also implemented requirements for job site safety and signage at its locations to promote safety. The dealer has launched a dedicated COVID-19 resource website to keep associates up-to-date on company and health authority information, guidelines, and policies.
The dealer has been classified as “essential” in the majority of its locations and only experienced more restrictive stay-at-home orders that halted construction activities in a select number of states, including Washington, Pennsylvania, and northern California.
