US LBM recorded a net loss of $22.7 million in the first quarter, improving slightly from a $24.5 million net loss in the year-earlier period, the company reported late May 15. Sales rose 4.5% to $689.3 million; same-store sales grew 2.4%.
The company revealed its latest financial results in an update to the SEC filing it made May 10, 2017, as a first step toward an initial public offering. That IPO would certainly be the biggest in construction supply in years, given US LBM’s status as the No. 6 company on the latest ProSales 100, with 2017 sales of $3.09 billion.
The company’s gross profit increased 2.5% to $185.3 million. Gross margin slipped to 26.9% from 27.4%.
Selling, general and administrative expenses jumped 4.1% to $163.8 million. but depreciation and amortization costs shrank 1.5% to $20.6 million. That enabled the Buffalo Grove, Ill.-based dealer to swing to an operating profit of $870,000 in the January-to-March period from a $940,000 operating loss a year earlier.
US LBM likes to measure itself in terms of adjusted EBITDA–earnings before interest, taxes, depreciation, and amortization as well as before IPO-related expenses, acquisition expenses, equity-based compensation and profit interests, management fees, goodwill impairment, early extinguishment of debt, changes in reserves, consultant fees, and other unnamed expenses. By that metric, adjusted EBITDA slipped to $28.5 million (4.1% of sales) from $30.5 million (4.6%).
A balance sheet shows total assets of $1.83 billion as of March 31, with goodwill accounting for $662.6 million of those assets. On the liabilities side, total debt amounted to $1.19 billion.
The SEC filing also broke down how US LBM made its money during the quarter. Wood products sales accounted for 28.0% of revenue, up from 25.9% for all 2017. This increase is consistent with several other dealers who cited higher lumber prices for increases in wood-related sales. US LBM took in 19.0% of 1Q revenue from windows, doors, and millwork, down from 2017’s 19.7%. As for the other categories: wallboard and metal studs accounted for19.4% of first-quarter sales, up from 16.5% last year); roofing and siding 9.4% (vs. 10.9% in 2017); engineered components 8.6% (down from 9.8%); cabinetry 5.1% (down from 5.8%); and hardlines and other products and services 10.5% (down from 11.4%).
Custom builders spend 36% of the dollars that US LBM took in last year. Production builders accounted for 16% of sales, multi-family builders 14%, remodelers 19%, commercial interests 12%, and all others 4%.
