Specialty dealer Foundation Building Materials (FBM) reported both net sales and net income decreased during the fiscal second quarter of 2020, in part due to the impacts of the coronavirus (COVID-19) pandemic. The company’s net sales decreased 13.2% on a year-over-year (YOY) basis to $486.1 million while its net income decreased $4.9 million YOY to $9.9 million in the quarter, according to FBM’s earnings report.
The dealer’s net sales from base business decreased $77.4 million compared to the second quarter of 2019. Net sales from acquired branches and existing branches that were strategically combined increased by $3.6 million YOY in the second quarter. Base business net sales across all major product lines decreased during the second quarter, primarily as a result of reduced business activity due to the impacts and disruptions caused by COVID-19, according to FBM.
Tustin, Calif.-based FBM reported gross profit decreased $25.9 million to $145.7 million when compared to the prior year period. The decrease in gross profit was primarily due to lower net sales, according to the company. The dealer’s gross margin for the second quarter decreased 60 basis points on a YOY basis to 30.0%. The decrease was primarily attributed to COVID-19 related market disruptions.
Adjusted EBITDA for the second quarter was $42.3 million, compared to $50.3 million during the second quarter of 2019. FBM’s adjusted EBITDA margin in the second quarter was 8.7%, 30 basis points lower than in the second quarter of 2019.
“Despite a decline in net sales due to the COVID-19 pandemic, our stable profitability highlighted our second quarter results,” FBM president and CEO Ruben Mendoza said in a prepared statement. “Our long-term strategic focus is unwavering. As we navigate through these challenging market conditions, we remain committed to our strategic priorities that will lead to long-term value creation for our company.”
FBM reported that, through July, the COVID-19 pandemic has had a negative impact on most of the markets it serves. In several states, including Washington, California, Michigan, New Jersey, and Pennsylvania, FBM continues to face jobsite restrictions, which has reduced branch operations. Net sales during July were down approximately 7% YOY, according to the dealer.
FBM operates more than 175 branches across the United States and Canada. The company distributes wallboard, suspended ceiling systems, metal framing, and complementary products.
