US LBM swung to a $1.2 million net profit in the fourth quarter on an 11.2% rise in sales to $786.8 million, the dealer’s latest SEC filing shows. It finished the year $10.9 million in the red compared with 2016’s $47.7 million net loss.
The company’s updated S-1 registration statement in advance of an initial public offering didn’t give quarterly numbers. The numbers reported here are based on subtracting the nine-month numbers from the latest full-year figures.
Gross profit margin slipped to 27.4% of sales from 28.3% in 2016’s fourth quarter. Operating profit soared 85% to $25.2 million.
Below the operating line, US LBM’s annual profit was reduced $1.4 million by a previously claimed loss on early extinguishment of debt. Tax reform issues warped other dealers because of changes to tax-loss carryforward assets, but in US LBM’s case the impact appears to be about a $96,000 reduction in income tax expenses.
Investors likely to buy US LBM stock once it goes public tend to be more interested in EBITDA–earnings before interest, taxes, depreciation, and amortization. US LBM measures itself through adjusted EBITDA, which it defines as EBITDA plus IPO-related expenses, acquisition expenses, equity-based compensation, management fees, goodwill impairment, loss on early extinguishment of debt, change in LIFO reserve, consultant fees, and other expenses. By that measure adjusted EBITDA grew to $220.9 million in 2017 from $186.6 million in 2016 but held stead at 7.1% of revenues.
Buffalo Grove, Ill.-based US LBM ranks fifth on the ProSales 100.
