Builders FirstSource: sales are up, but so are losses
Builders FirstSource, the Dallas-based pro dealer, reported net sales of $291.8 million for its third fiscal quarter, an increase of 34.3% when compared with the third quarter of 2011. The company estimated that sales increased approximately 27% due to increased volume and 7% due to price.
Losses from continuing operations were $12.3 million for the quarter, which ended Sept. 30. This compares with a loss of $11.5 million in the third quarter of 2011.
“Our topline growth continues to exceed the increase in residential construction activity, as actual single-family housing starts in the south region increased 27.7% over the same time period, and single-family units under construction increased only 12.4%," said Builders FirstSource CEO Floyd Sherman. "For the second consecutive quarter, we reported positive adjusted EBITDA, finishing with $3.0 million for the current quarter as compared with an adjusted EBITDA loss of $0.7 million in the third quarter of 2011.”
Chad Crow, Builders FirstSource senior VP and CFO, said that the company’s results were negatively impacted by inflation on commodity lumber and “our limited ability to adjust intra-quarter customer pricing.”
“While we were able to pass on some price increases as part of our third-quarter pricing, we once again experienced a rising commodity market for most of the quarter,” Crow added. “Commodity prices increased, on average, 14% from the end of the second quarter through mid-September, before falling back somewhat by quarter-end. These factors, combined with what is still an extremely competitive pricing environment, constrained our gross margin during the quarter.”