BFS reports big Q2 sales, and big refi costs
Builders FirstSource CEO Floyd Sherman describes the three months ended June 30 as "another quarter of improving financial performance" for the Dallas-based pro dealer. However, hefty refinancing costs pushed the company to a net loss of $48.2 million in the quarter, compared with a net loss of $12.1 million in last year's second quarter.
The company reported operating income of $13.2 million, compared with an operating loss of $1.4 million in the second quarter last year.
The Dallas-based pro dealer's sales for the period were $398.1 million, an increase of 46.4%.
Sherman explained the market conditions that led to that sales surge: "Lumber and lumber sheet good prices were, on average, 21.5% higher during the second quarter of 2013 as compared with those in the same quarter last year, though prices did fall approximately 30% during the quarter. Falling prices in the back half of the quarter relieved some of the gross margin pressure we had been experiencing from commodity inflation, and we were able to improve our gross margin by 100 basis points for the current quarter due to both improved pricing and higher sales volumes."
For the second quarter of 2013, interest expense included refinancing costs of approximately $48.4 million. It was a cost that the company was willing to pay to get back in the black, according to CFO Chad Crow. "Our recent refinancing transaction provides a tremendous boost to our goal of returning to positive net income," he said.
Sherman added: "As the recovery in the housing market continues, we believe our year-over-year sales growth for the second half of 2013 will be driven by the combination of market share gains and increases in overall customer demand. We will maintain our focus on improving our gross margins and further leveraging our operating cost structure."