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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Builders FirstSource Inc | NYSE:BLDR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 169.23 | 4 | 09:00:00 |
Builders FirstSource, Inc. (NYSE: BLDR) today reported its results for the fourth quarter and full year ended December 31, 2023.
BFS Highlights All Year-Over-Year Comparisons Unless Otherwise Noted:
“I'm proud of our fourth quarter and full year results, which demonstrated the strength of our broad product portfolio and continued execution by our resilient team members. Despite a challenging operating environment in 2023, which saw a significant reduction in single-family starts, we delivered a high-teens EBITDA margin. We accomplished this through operational rigor and by closely partnering with our customers to help address their pain points through use of our value-added solutions, solidifying our position as the easiest to do business with across the industry,” commented Dave Rush, CEO of Builders FirstSource.
Mr. Rush continued, “As we turn to 2024, we are excited about the opportunities in front of us. As we outlined at our recent Investor Day in December, we remain focused on our consistent strategy of growing our value-added products and services, investing in digital innovations, operating efficiently, and compounding long-term shareholder value.”
Peter Jackson, CFO of Builders FirstSource, added, “Our fourth quarter and full year results demonstrate the effectiveness of our operating model through the cycle. Our fortress balance sheet, strong cash flow generation, and ability to prudently deploy capital to the highest return opportunities, including acquisitions and share repurchases, continues to position us for long-term success. We are leveraging our sustainable competitive advantages and strong financial position to drive future growth and value creation for our shareholders.”
Fourth Quarter 2023 Financial Performance Highlights All Year-Over-Year Comparisons Unless Otherwise Noted:
Net Sales
Gross Profit
Selling, General and Administrative Expenses
Interest Expense
Income Tax Expense
Net Income
Adjusted Net Income
Adjusted Earnings Per Diluted Share
Adjusted EBITDA
Full Year 2023 Financial Performance Highlights All Year-Over-Year Comparisons Unless Otherwise Noted:
Net Sales
Gross Profit
Selling, General and Administrative Expenses
Interest Expense
Income Tax Expense
Net Income
Adjusted Net Income
Adjusted Earnings Per Diluted Share
Adjusted EBITDA
Capital Structure, Leverage, and Liquidity Information
Operational Excellence Productivity
2024 Total Company Outlook
For 2024, the Company expects to achieve the financial performance highlighted below. Projected Net Sales and Adjusted EBITDA include the expected benefit of price, commodity, and margin impacts for 2024.
2024 Full Year Assumptions
The Company’s anticipated 2024 performance is based on several assumptions for the full year, including the following:
Conference Call
Builders FirstSource will host a conference call and webcast on Thursday, February 22, 2024, to discuss the Company’s financial results and other business matters. The teleconference will begin at 8:00 a.m. Central Time and will be hosted by Dave Rush, Chief Executive Officer, and Peter Jackson, Chief Financial Officer.
To participate in the teleconference, please dial into the call a few minutes before the start time: 800-225-9448 (U.S. and Canada) and 203-518-9708 (international), Conference ID: BLDRQ423. A replay of the call will be available at 12:00 p.m. Central Time through Thursday, February 29, 2024. To access the replay, please dial 800-925-9941 (U.S. and Canada) or 402-220-5395 (international). The live webcast and archived replay can also be accessed on the Company's investor relations website at investors.bldr.com under the Events and Presentations section. The online archive of the webcast will be available for approximately 90 days.
Upcoming Events
Management will participate in investor meetings at the NAHB International Builders' Show in Las Vegas on February 27-28, 2024, and at the Loop Capital Conference (virtually) on Monday, March 11, 2024.
About Builders FirstSource
Headquartered in Irving, Texas, Builders FirstSource is the largest U.S. supplier of building products, prefabricated components, and value-added services to the professional market segment for new residential construction and repair and remodeling. We provide customers an integrated homebuilding solution, offering manufacturing, supply, delivery, and installation of a full range of structural and related building products. We operate in 43 states with approximately 570 locations and have a market presence in 48 of the top 50 and 89 of the top 100 MSAs, providing geographic diversity and balanced end market exposure. We service customers from strategically located distribution and manufacturing facilities (some of which are co-located) that produce value-added products such as roof and floor trusses, wall panels, stairs, vinyl windows, custom millwork, and pre-hung doors. Builders FirstSource also distributes dimensional lumber and lumber sheet goods, millwork, windows, interior and exterior doors, and other specialty building products. www.bldr.com
Forward-Looking Statements
Statements in this news release and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about forecasted financial performance or other statements about anticipations, beliefs, expectations, hopes, synergies, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. As with the forward-looking statements included in this release, these forward-looking statements are by nature inherently uncertain, and actual results or events may differ materially as a result of many factors. All forward-looking statements are based upon information, assumptions, expectations, and projections about future events available to Builders FirstSource on the date this release was submitted. Builders FirstSource undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control or may be currently unknown to the Company, that could cause actual events or results to differ materially from the events or results described in the forward-looking statements; such risks or uncertainties include those related to the Company’s growth strategies, including acquisitions, organic growth and digital strategies, or the dependence of the Company’s revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, consumer confidence, labor and supply shortages, and also lumber and other commodity prices. Builders FirstSource may not succeed in addressing these and other risks. Further information regarding factors that could affect our financial and other results can be found in the risk factors section of Builders FirstSource’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and may also be described from time to time in the other reports Builders FirstSource files with the SEC. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein.
Non-GAAP Financial Measures
The financial measures entitled Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, diluted Adjusted net income per share and Free cash flow are not financial measures recognized under GAAP and are therefore non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and operating results.
Adjusted EBITDA is defined as GAAP net income before depreciation and amortization expense, interest expense, net, income tax expense and other non-cash or special items including stock compensation expense, acquisition and integration expense, debt issuance and refinancing costs, severance and gain on sale of assets and other one-time costs. LTM Adjusted EBITDA is defined as Adjusted EBITDA for the last twelve consecutive months. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net sales. Adjusted net income is defined as GAAP net income before non-cash or special items including acquisition and integration expense, technology implementation expense, debt issuance, and refinancing cost and amortization expense offset by the tax effect of those adjustments to net income. Adjusted net income per diluted share is defined as Adjusted net income divided by weighted average diluted common shares outstanding. Free cash flow is defined as GAAP net cash from operating activities less capital expenditures, net of proceeds from the sale of property, plant and equipment.
Company management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income and diluted Adjusted net income per share as supplemental measures in its evaluation of the Company’s business, including for trend analysis, purposes of determining management incentive compensation and budgeting and planning purposes. Company management believes that these measures provide a meaningful measure of the Company’s performance and a better baseline for comparing financial performance across periods because these measures eliminate the effects of period to period changes, in the case of Adjusted EBITDA and Adjusted EBITDA margin, in taxes, costs associated with capital investments, interest expense, stock compensation expense, and other non-cash and non-recurring items and, in the case of Adjusted net income and Adjusted net income per diluted share, in certain non-recurring items. Company management also uses free cash flow as a supplemental measure in its evaluation of the Company’s business, including for purposes of its internal liquidity assessments. Company management believes that free cash flow provides a meaningful evaluation of the Company’s liquidity.
The Company believes that these non-GAAP financial measures provide additional tools for investors to use in evaluating ongoing operating results, cash flows and trends and in comparing the Company’s financial measures with other companies in the Company’s industry, which may present similar non-GAAP financial measures to investors. However, the Company’s calculations of these financial measures are not necessarily comparable to similarly titled measures reported by other companies. Company management does not consider these financial measures in isolation or as alternatives to financial measures determined in accordance with GAAP. Furthermore, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below.
The Company’s Adjusted EBITDA outlook, free cash flow and full-year forecast for its effective tax rate on operations exclude the impact of certain income and expense items that management believes are not part of underlying operations. These items may include, but are not limited to, loss on early extinguishment of debt, restructuring charges, certain tax items, and charges associated with non-recurring costs such as professional and legal fees associated with our acquisitions and enterprise resource planning (ERP) program. The Company’s management cannot estimate on a forward-looking basis without unreasonable effort the impact these income and expense items will have on its reported net income, operating cash flow and its reported effective tax rate because these items, which could be significant, are difficult to predict and may be highly variable. As a result, the Company does not provide a reconciliation to the most comparable GAAP financial measure for its Adjusted EBITDA or free cash flow outlook or its effective tax rate on operations forecast. Please see the Forward-Looking Statements section of this release for a discussion of certain risks relevant to the Company’s outlook.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
Years Ended December 31,
(in thousands, except per share amounts)
2023
2022
2021
Net sales
$
17,097,330
$
22,726,418
$
19,893,856
Cost of sales
11,084,996
14,982,039
14,042,900
Gross margin
6,012,334
7,744,379
5,850,956
Selling, general and administrative expenses
3,836,015
3,974,173
3,463,532
Income from operations
2,176,319
3,770,206
2,387,424
Interest expense, net
192,115
198,373
135,877
Income before income taxes
1,984,204
3,571,833
2,251,547
Income tax expense
443,649
822,464
526,131
Net income
$
1,540,555
$
2,749,369
$
1,725,416
Net income per share:
Basic
$
12.06
$
16.98
$
8.55
Diluted
$
11.94
$
16.82
$
8.48
Weighted average common shares:
Basic
127,777
161,960
201,839
Diluted
128,998
163,481
203,470
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
Year Ended December 31,
(in thousands)
2023
2022
2021
Cash flows from operating activities:
Net income
$
1,540,555
$
2,749,369
$
1,725,416
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
558,275
497,140
547,352
Amortization of debt discount, premium and issuance costs
4,685
4,837
3,869
Loss on extinguishment of debt
728
27,387
3,027
Deferred income taxes
(102,461
)
(92,461
)
(34,573
)
Stock-based compensation expense
48,522
31,337
31,486
Credit loss expense
(11,488
)
38,921
20,451
Non-cash net gain on assets
(7,072
)
(1,965
)
(32,421
)
Changes in assets and liabilities, net of assets acquired and liabilities assumed:
Receivables
(12,641
)
381,223
(474,362
)
Inventories
231,457
271,889
(282,165
)
Contract assets
18,023
24,051
(103,326
)
Other current assets
10,941
15,173
(33,489
)
Other assets and liabilities
(5,311
)
15,189
(1,155
)
Accounts payable
75,750
(314,004
)
191,885
Accrued liabilities
(9,704
)
(15,766
)
91,419
Contract liabilities
(33,387
)
(33,089
)
90,135
Net cash provided by operating activities
2,306,872
3,599,231
1,743,549
Cash flows from investing activities:
Cash used for acquisitions, net of cash acquired
(238,673
)
(628,014
)
(1,206,471
)
Proceeds from divestiture of business
—
—
76,162
Purchases of property, plant and equipment
(476,335
)
(340,152
)
(227,891
)
Proceeds from sale of property, plant and equipment
46,715
10,687
13,560
Net cash used in investing activities
(668,293
)
(957,479
)
(1,344,640
)
Cash flows from financing activities:
Borrowings under revolving credit facility
5,128,000
5,881,000
3,125,000
Repayments under revolving credit facility
(4,928,000
)
(6,205,000
)
(2,612,000
)
Proceeds from long-term debt and other loans
—
1,001,500
1,000,000
Repayments of long-term debt and other loans
(4,221
)
(616,222
)
(554,677
)
Payments of debt extinguishment costs
—
(20,672
)
(4,950
)
Payments of loan costs
(1,897
)
(16,797
)
(19,450
)
Exercise of stock options
659
589
726
Repurchase of common stock
(1,847,409
)
(2,628,308
)
(1,714,761
)
Net cash used in financing activities
(1,652,868
)
(2,603,910
)
(780,112
)
Net change in cash and cash equivalents
(14,289
)
37,842
(381,203
)
Cash and cash equivalents at beginning of period
80,445
42,603
423,806
Cash and cash equivalents at end of period
$
66,156
$
80,445
$
42,603
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in thousands, except per share amounts)
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
66,156
$
80,445
Accounts receivable, less allowances of $42,488 and $67,980, respectively
1,436,917
1,448,139
Other receivables
290,310
234,966
Inventories, net
1,228,265
1,426,196
Contract assets
165,677
183,700
Other current assets
113,403
124,201
Total current assets
3,300,728
3,497,647
Property, plant and equipment, net
1,803,824
1,567,631
Operating lease right-of-use assets, net
502,184
485,704
Goodwill
3,556,556
3,456,854
Intangible assets, net
1,298,173
1,550,944
Other assets, net
37,987
36,380
Total assets
$
10,499,452
$
10,595,160
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
881,384
$
803,479
Accrued liabilities
717,528
739,009
Contract liabilities
162,659
193,178
Current portion of operating lease liabilities
98,217
100,758
Current maturities of long-term debt
3,649
6,355
Total current liabilities
1,863,437
1,842,779
Noncurrent portion of operating lease liabilities
434,081
404,463
Long-term debt, net of current maturities, discounts and issuance costs
3,177,411
2,977,842
Deferred income taxes
167,199
269,660
Other long-term liabilities
124,973
137,850
Total liabilities
5,767,101
5,632,594
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000 shares authorized; zero shares issued and outstanding
—
—
Common stock, $0.01 par value, 300,000 shares authorized; 121,857 and 138,864 shares issued and outstanding, respectively
1,219
1,389
Additional paid-in capital
4,270,948
4,257,667
Retained earnings
460,184
703,510
Total stockholders' equity
4,732,351
4,962,566
Total liabilities and stockholders' equity
$
10,499,452
$
10,595,160
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Reconciliation of Adjusted Non-GAAP Financial Measures to their GAAP Equivalents
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(in millions)
2023
2022
2023
2022
Reconciliation to Adjusted EBITDA:
GAAP net income
$
350.7
$
384.5
$
1,540.6
$
2,749.4
Acquisition and related expense
4.0
6.1
30.9
47.8
Technology implementation expense
29.8
17.3
81.4
29.0
Debt issuance and refinancing cost
-
-
0.7
27.4
Amortization expense
82.8
90.1
335.7
302.6
Tax-effect of adjustments to net income
(28.0
)
(27.2
)
(107.7
)
(97.6
)
Adjusted net income
$
439.3
$
470.8
$
1,881.6
$
3,058.6
Weighted average diluted common shares
123.8
146.8
129.0
163.5
Diluted adjusted net income per share:
$
3.55
$
3.21
$
14.59
$
18.71
Reconciling items:
Depreciation expense
$
59.3
$
51.6
$
222.6
$
194.6
Interest expense, net
46.8
42.2
191.4
171.0
Income tax expense
120.9
126.5
551.3
920.1
Stock compensation expense
13.0
4.7
48.5
31.3
Other management-identified adjustments (1)
6.2
1.1
3.9
1.0
Adjusted EBITDA
$
685.5
$
696.9
$
2,899.3
$
4,376.6
Adjusted EBITDA margin
16.5
%
16.0
%
17.0
%
19.3
%
(1) Primarily relates to severance, net gain/loss on sale of assets, and other one-time costs.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Financial Data
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(in millions, except per share amounts)
2023
2022
2023
2022
Net sales
$
4,150.9
$
4,357.6
$
17,097.3
$
22,726.4
Cost of sales
2,686.0
2,872.5
11,085.0
14,982.0
Gross margin
1,464.9
1,485.1
6,012.3
7,744.4
Gross margin %
35.3
%
34.1
%
35.2
%
34.1
%
Adjusted SG&A as a % of sales (1)
18.9
%
18.1
%
18.2
%
14.8
%
Adjusted EBITDA
685.5
696.9
2,899.3
4,376.6
Adjusted EBITDA margin %
16.5
%
16.0
%
17.0
%
19.3
%
Depreciation expense
(59.3
)
(51.6
)
(222.6
)
(194.6
)
Interest expense, net of debt issuance cost and refinancing
(46.8
)
(42.2
)
(191.4
)
(171.0
)
Income tax expense
(120.9
)
(126.5
)
(551.3
)
(920.1
)
Other adjustments
(19.2
)
(5.8
)
(52.4
)
(32.3
)
Adjusted net income
$
439.3
$
470.8
$
1,881.6
$
3,058.6
Basic adjusted net income per share:
$
3.58
$
3.24
$
14.73
$
18.88
Diluted adjusted net income per share:
$
3.55
$
3.21
$
14.59
$
18.71
Weighted average common shares
Basic
122.6
145.5
127.8
162.0
Diluted
123.8
146.8
129.0
163.5
(1) Adjusted SG&A as a percentage of net sales is defined as GAAP SG&A less depreciation and amortization, stock compensation, acquisition, integration, and technology implementation expenses divided by net sales.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Interest Reconciliation
(unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2023
(in millions)
Interest Expense
Net Debt Outstanding
Interest Expense
Net Debt Outstanding
2032 Unsecured notes @ 4.25%
$
13.8
$
1,300.0
$
55.3
$
1,300.0
2032 Unsecured notes @ 6.375%
11.2
700.0
44.6
700.0
2030 Unsecured notes @ 5.00%
6.9
550.0
27.5
550.0
Revolving credit facility @ 7.10% weighted average interest rate
9.1
464.0
40.1
464.0
Amortization of debt issuance costs, discount and premium
1.2
-
4.7
-
Finance leases and other finance obligations
4.8
195.3
19.5
195.3
Debt issuance and refinancing cost
-
-
0.7
-
Cash
-
(66.2
)
-
(66.2
)
Total
$
47.0
$
3,143.1
$
192.4
$
3,143.1
Three Months Ended
Twelve Months Ended
(in millions)
December 31, 2023
December 31, 2023
Free Cash Flow
Operating activities
$
611.7
$
2,306.9
Less: Capital expenditures, net of proceeds
(96.4
)
(429.6
)
Free cash flow
$
515.3
$
1,877.3
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Sales by Product Category
(unaudited)
Three Months Ended December 31,
2023
2022
(in millions)
Net Sales
% of Net Sales
Net Sales
% of Net Sales
% Change
Manufactured products
$
1,105.6
26.6
%
$
1,142.7
26.2
%
(3.2
)%
Windows, doors & millwork
1,056.2
25.4
%
1,127.9
25.9
%
(6.4
)%
Value-added products
2,161.8
52.0
%
2,270.6
52.1
%
(4.8
)%
Specialty building products & services
948.8
22.9
%
990.2
22.7
%
(4.2
)%
Lumber & lumber sheet goods
1,040.3
25.1
%
1,096.8
25.2
%
(5.2
)%
Total net sales
$
4,150.9
100.0
%
$
4,357.6
100.0
%
(4.7
)%
Twelve Months Ended December 31,
2023
2022
(in millions)
Net Sales
% of Net Sales
Net Sales
% of Net Sales
% Change
Manufactured products
$
4,700.7
27.5
%
$
5,675.7
24.9
%
(17.2
)%
Windows, doors & millwork
4,289.1
25.1
%
4,653.3
20.5
%
(7.8
)%
Value-added products
8,989.8
52.6
%
10,329.0
45.4
%
(13.0
)%
Specialty building products & services
3,978.7
23.3
%
4,310.6
19.0
%
(7.7
)%
Lumber & lumber sheet goods
4,128.9
24.1
%
8,086.8
35.6
%
(48.9
)%
Total net sales
$
17,097.3
100.0
%
$
22,726.4
100.0
%
(24.8
)%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240222401542/en/
Heather Kos SVP, Investor Relations Builders FirstSource, Inc. investorrelations@bldr.com
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