19:24:59 Today BLDR Builders FirstSource Reports First Quarter 2010 Results
Builders FirstSource Reports First Quarter 2010 Results
DALLAS, Apr 22, 2010 (GlobeNewswire via COMTEX) -- Builders FirstSource, Inc.
(BLDR), a leading supplier and manufacturer of structural and related building
products for residential new construction in the United States, today reported
its results for the quarter ended March 31, 2010.
First Quarter Financial Highlights (unaudited)
----------------------------------------------------------------------------------------------
FirstDilutedFirstDiluted
QuarterPerQuarterPer
2010Share2009Share
----------------------------------------------------------------------------------------------
Sales$ 161.4 million$159.6 million
Loss from continuing operations$(31.2) million$(0.38)$(28.6) million$(0.73)
Included in the calculation of
loss from continuing
operations:
Debt issue costs write-off$ 4.1 million$0.03$ 1.2 million$0.02
Tax valuation allowance$11.6 million$0.14$0.31
----------------$12.2 million----------------
$0.17$0.33
Adjusted loss from continuing
operations*$(17.0) million$(0.21)$(0.40)
================$(15.6) million================
Adjusted EBITDA*$(15.3) million$(12.5) million
==============================================================
* See reconciliation attached.
"The first quarter of 2010 saw a continued improvement in housing starts as
actual U.S. single-family housing starts increased to 114,300, up 46.0 percent
from the same quarter last year," said Floyd Sherman, Builders FirstSource Chief
Executive Officer. "The annualized rate for single-family housing starts at the
end of the current quarter was 531,000, up 47.1 percent from the annualized rate
of 361,000 one year ago."
Mr. Sherman added, "Though housing starts improved in the current quarter, actual
U.S. single-family units under construction declined 16.8 percent
quarter-over-quarter, indicating the number of homes in the construction pipeline
continues to decrease. The annualized rate for single-family housing units under
construction at the end of the current quarter was 305,000, down 12.1 percent
from the annualized rate of 347,000 one year ago. The trend was similar for
building activity in the South Region, as defined by the U.S. Census Bureau,
which encompasses our entire geographic operating footprint.
"Our sales in the current quarter were up slightly, but we experienced a 48.1
percent increase in commodity prices quarter-over-quarter. While commodity prices
were up dramatically, fixed pricing agreements with our customers which range
from 30, 60 and 90 days, prevented us from passing along a substantial portion of
these increases to our customers. As a result of this unprecedented run up in
commodity prices during the quarter, combined with fixed pricing agreements with
our customers, our gross margin fell to 18.2%, down from 21.0% in the first
quarter of 2009. This run up in commodity pricing has continued into April, but
we believe our current inventory levels should help mitigate some of the pricing
pressure in the second quarter. While higher commodity prices are good for the
long-term health of our company, rapid increases which we are currently
experiencing places added pressure on gross margins."
Commenting on the first quarter results, Chad Crow, Builders FirstSource Senior
Vice President and Chief Financial Officer, added, "We ended the quarter with
over $124.8 million in cash, which does not include the $33.8 million income tax
refund we received subsequent to quarter-end. Available liquidity was $131.2
million, as we had $6.4 million of net borrowing availability at quarter-end
under our revolver. Cash used for the current quarter, excluding the net proceeds
from our recently closed rights offering, was $27.2 million, which was less than
we had forecasted. Of the $27.2 million of cash used, $4.4 million was due to an
increase in working capital, the result of improved sales in March combined with
inventory buys to cover fixed customer pricing arrangements, and $1.9 million
related to capital expenditures. The remaining $20.9 million of cash used to fund
general operations was impacted by rapidly increasing commodity prices, which
reduced our gross margin by approximately $4.0-$5.0 million during the quarter.
From a working capital perspective, our accounts receivable days decreased to
36.1 days for the current quarter, compared to 42.1 days last year. Inventory
turns improved to 9.1x from 7.7x for the same quarter of last year. Additionally,
accounts payable days increased to 34.4 days, up from the 27.3 days for the first
quarter of last year. These improvements helped to lower our cash conversion days
to 41.9 days in the current quarter, down from 61.9 days for the same time last
year."
First Quarter 2010 Results Compared to First Quarter 2009
(See accompanying financial schedules for full financial details and
reconciliations of Non-GAAP financial measures to their GAAP equivalents.)
--Sales were $161.4 million compared to $159.6 million last year, an
increase of $1.8 million or 1.1 percent. Our sales increase was
primarily attributable to commodity inflation during the current
quarter.
--Gross margin percentage was 18.2 percent, down from 21.0 percent, a 2.8
percentage point decline. Specifically, our gross margin percentage
declined 3.1 percentage points due to price and was only slightly
impacted by volume (fixed costs in costs of goods sold) and sales
mix.
--Selling, general and administrative ("SG&A") expenses decreased $2.6
million, or 5.0 percent. As a percentage of sales, SG&A expense
decreased from 32.6 percent in 2009 to 30.6 percent in 2010 primarily
due to reduced customer write-offs, lower salaries and benefits expense,
and better leveraging of costs due to commodity inflation and improved
sales.
--Interest expense was $11.3 million in the current quarter, an increase
of $3.8 million over the year ago quarter. The increase was due to the
write off of $1.6 million of unamortized debt issue costs related to
long-term debt repaid during the quarter and $2.5 million of costs
related to the recapitalization transaction. Interest expense also
increased by $0.8 million related to fair value adjustments on our
interest rate swaps.These increases were partially off-set by a
write-off of $1.2 million in debt issue costs related to the capacity
reduction of our revolving credit facility from $350 million to $250
million in the first quarter of 2009.
--We recorded an income tax benefit of $0.1 million during the quarter
compared to $2.1 million of expense in the first quarter of 2009. We
recorded an after-tax, non-cash valuation allowance of $11.6 million and
$12.2 million, in 2010 and 2009, respectively, related to our net
deferred tax assets. Absent this valuation allowance, our tax benefit
rate would have been 37.6 percent and 38.0 percent in 2010 and 2009,
respectively.
--Loss from continuing operations was $31.2 million, or $0.38 loss per
diluted share, compared to $28.6 million, or $0.73 loss per diluted
share. Excluding the valuation allowance and the write-off of debt issue
costs, our loss from continuing operations per diluted share was $0.21
and $0.40 for 2010 and 2009, respectively.
--Our loss from discontinued operations for the first quarter of 2010 was
$0.2 million, or $0.00 per diluted share, compared to $2.0 million, or
$0.05 loss per diluted share for the first quarter of 2009.
--Net loss was $31.4 million, or $0.38 loss per diluted share, compared to
net loss of $30.6 million, or $0.78 loss per diluted share.
--Diluted weighted average shares outstanding were 81.8 million compared
to 39.0 million. Approximately 58.6 million additional shares were
issued in the current quarter as part of our rights offering and debt
exchange.
--Adjusted EBITDA was a loss of $15.3 million compared to a loss of $12.5
million last year. See reconciliation attached.
Liquidity and Capital Resources
--In January 2010, we announced the completion of our rights offering and
debt exchange. The closing of these transactions reduced our long-term
debt by $130 million and extended the maturity of $139.7 million of our
remaining debt to 2016. The rights offering also provided us
approximately $65 million in net proceeds to be used for general
corporate purposes.
--Our cash on hand was $124.8 million at March 31, 2010. Our net borrowing
availability at March 31, 2010, in excess of the $35.0 million minimum
liquidity covenant, was $6.4 million. We also received our federal
income tax refund of approximately $33.8 million in April 2010.
--Operating cash flow was $(26.9) million compared to $(3.2) million for
the first quarter of 2009.
--Capital expenditures were $1.9 million which primarily related to lease
buyouts on rolling stock. Capital expenditures in the first quarter of
2009 were $1.7 million.
Outlook
Mr. Sherman concluded, "Although housing starts have somewhat stabilized, we
continue to experience intense pricing pressure from competition, and rapidly
rising commodity prices will continue to present challenges in the second
quarter. We also do not yet know the future impact on our sales, if any, that may
result from the upcoming expiration of the federal tax credit for first-time
homebuyers. However, while industry conditions remain difficult, our improved
liquidity position, coupled with our $33.8 million federal income tax refund
received in April, currently has us well positioned to take advantage of a
housing recovery. Finally, I would like to thank all our employees for their hard
work and the sacrifices they have made during these challenging times. I believe
we have the strongest team in the industry and I am proud to be a part of the BFS
team."
Conference Call
Builders FirstSource will host a conference call Friday, April 23, 2010, at 10:00
a.m. Central Time (CT) and will simultaneously broadcast it live over the
Internet. To participate in the teleconference, please dial into the call a few
minutes before the start time: 888-677-8751 (U.S. and Canada) and 913-905-1084
(international). A replay of the call will be available from 3:00 p.m. through
April 28, 2010. To access the replay, please dial 888-203-1112 (U.S. and Canada)
and 719-457-0820 (international). Please refer to pass code 8892646. To access
the webcast, go to http://www.bldr.com and click on "Investors." The online
archive of the webcast will be available for approximately 90 days.
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource is a leading supplier and
manufacturer of structural and related building products for residential new
construction. The company operates in 9 states, principally in the southern and
eastern United States, and has 55 distribution centers and 51 manufacturing
facilities, many of which are located on the same premises as our distribution
facilities. Manufacturing facilities include plants that manufacture roof and
floor trusses, wall panels, stairs, aluminum and vinyl windows, custom millwork
and pre-hung doors. Builders FirstSource also distributes windows, interior and
exterior doors, dimensional lumber and lumber sheet goods, millwork and other
building products. For more information about Builders FirstSource, visit the
company's Web site at http://www.bldr.com.
Cautionary Notice
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 the impact of expected market share gains, plans to reduce
costs, forecasted financial performance or other statements about anticipations,
beliefs, expectations, hopes, 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. All forward-looking statements are based
upon information available to Builders FirstSource, Inc. on the date this release
was submitted. Builders FirstSource, Inc. undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Any forward-looking statements involve
risks and uncertainties that could cause actual events or results to differ
materially from the events or results described in the forward-looking
statements, including risks or uncertainties related to the Company's growth
strategies, including gaining market share, or the Company's revenues and
operating results being highly dependent on, among other things, the homebuilding
industry, lumber prices and the economy. Builders FirstSource, Inc. 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, Inc.'s most recent annual report on
Form 10-K filed with the Securities and Exchange Commission. Consequently, all
forward-looking statements in this release are qualified by the factors, risks
and uncertainties contained therein.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
Three months ended
March 31,
------------------------
20102009
----------------------
(in thousands, except
per share amounts)
Sales$ 161,373$ 159,576
Cost of sales131,942126,026
----------------------
Gross margin29,43133,550
Selling, general and administrative expenses
(includes
stock-based compensation expense of
$1,041 and
$1,437 for the three months ended in 2010
and 2009,
respectively)49,44552,062
Facility closure costs5454
----------------------
Loss from operations(20,019)(18,966)
Interest expense, net11,3257,536
----------------------
Loss from continuing operations before
income taxes(31,344)(26,502)
Income tax (benefit) expense(144)2,114
----------------------
Loss from continuing operations(31,200)(28,616)
Loss from discontinued operations (net of
income tax
benefit of $0 in 2010 and 2009,
respectively)(186)(1,962)
----------------------
Net loss$ (31,386)$ (30,578)
======================
Basic and diluted net loss per share:
Loss from continuing operations$ (0.38)$ (0.73)
Loss from discontinued operations(0.00)(0.05)
----------------------
Net loss$ (0.38)$ (0.78)
======================
Weighted average common shares:
Basic and diluted81,84939,025
======================
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Sales by Product Category
(unaudited)
Three months ended March 31,
--------------------------------------
20102009
------------------------------------
(dollars in thousands)
Prefabricated components$ 31,97019.8%$ 28,95318.1%
Windows & doors36,93722.9%39,90425.0%
Lumber & lumber sheet goods44,38827.5%38,92724.4%
Millwork17,77811.0%16,47810.3%
Other building products &
services30,30018.8%35,31422.2%
--------------------------------
Total sales$ 161,373100.0%$ 159,576100.0%
================================
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
December
March 31,31,
20102009
--------------------
(in thousands, except
per share amounts)
ASSETS
Current assets:
Cash and cash equivalents$ 124,817$ 84,098
Trade accounts receivable, less
allowance of $4,303 and $4,883
at
March 31, 2010 and December 31,
2009, respectively74,23860,723
Other receivables36,51339,758
Inventories63,38448,022
Other current assets7,5487,741
--------------------
Total current assets306,500240,342
Property, plant and equipment,
net62,19564,025
Goodwill111,193111,193
Other assets, net11,21019,391
--------------------
Total assets$ 491,098$ 434,951
====================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts Payable$ 57,593$ 39,570
Accrued liabilities26,58628,923
Current maturities of long-term
debt4948
--------------------
Total current liabilities84,22868,541
Long-term debt, net of current
maturities169,089299,135
Other long-term liabilities19,16420,328
--------------------
272,481388,004
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par
value, 10,000 shares
authorized; zero shares
issued and outstanding----
Common stock, $0.01 par value,
200,000 shares authorized;
96,709
and 36,347 shares issued and
outstanding at March 31, 2010
and
December 31, 2009, respectively949363
Additional paid-in capital351,927150,240
Accumulated deficit(130,359)(98,973)
Accumulated other comprehensive
loss(3,900)(4,683)
--------------------
Total stockholders' equity218,61746,947
--------------------
Total liabilities and
stockholders' equity$ 491,098$ 434,951
====================
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
Three months ended March
31,
------------------------
20102009
----------------------
(in thousands)
Cash flows from operating activities:
Net loss$ (31,386)$ (30,578)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization3,7684,748
Amortization of deferred loan costs4,4911,875
Deferred income taxes(329)103
Bad debt expense4101,130
Net non-cash (income) expense from
discontinued
operations(3)77
Non-cash stock based compensation1,0411,437
Net gain on sales of assets(61)(283)
Changes in assets and liabilities:
Receivables(10,677)13,088
Inventories(15,362)5,033
Other current assets1932,254
Other assets and liabilities(387)(458)
Accounts payable18,0237,820
Accrued liabilities3,388(9,481)
----------------------
Net cash used in operating activities(26,891)(3,235)
----------------------
Cash flows from investing activities:
Purchases of property, plant and
equipment(1,858)(1,670)
Proceeds from sale of property, plant
and equipment118700
----------------------
Net cash used in investing activities(1,740)(970)
----------------------
Cash flows from financing activities:
Payments of long-term debt and other
loans(105,152)(10)
Proceeds from rights offering180,107--
Payment of recapitalization costs(5,574)--
Repurchase of common stock(31)(126)
----------------------
Net cash provided by (used in)
financing activities69,350(136)
----------------------
Net change in cash and cash equivalents40,719(4,341)
Cash and cash equivalents at beginning of
period84,098106,891
----------------------
Cash and cash equivalents at end of
period$ 124,817$ 102,550
======================
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to their GAAP
Equivalents
(unaudited - dollars in thousands)
Note: The company provided detailed explanations of these non-GAAP
financial measures in its Form 8-K filed
with the Securities and Exchange Commission on April 22, 2010.
Three months ended
March 31,
------------------------
20102009
----------------------
Reconciliation to Adjusted EBITDA:
Net loss$ (31,386)$ (30,578)
Reconciling items:
Depreciation and amortization expense3,7684,748
Interest expense, net11,3257,536
Income tax (benefit) expense(144)2,114
Net gain on sale of assets(61)(283)
Loss from discontinued operations, net
of tax1861,962
Facility closure costs5454
Severance20114
Recapitalization costs(70)--
Stock compensation expense1,0411,437
----------------------
Adjusted EBITDA$ (15,316)$ (12,496)
======================
Adjusted EBITDA as percentage of sales-9.5%-7.8%
Three months ended
March 31,
20102009
----------------------------------------
Pre-TaxNet of TaxPre-TaxNet of Tax
------------------------------------
Reconciliation to Adjusted loss from continuing
operations:
Loss from continuing operations$ (31,200)$ (28,616)
Reconciling items:
Debt issue cost write-offs4,0942,5671,220793
Tax valuation allowance11,64412,185
----------------------
Adjusted loss from continuing operations$ (16,989)$ (15,638)
======================
Weighted average diluted shares outstanding81,84939,025
======================
Adjusted loss from continuing operations per
diluted share$ (0.21)$ (0.40)
======================
This news release was distributed by GlobeNewswire, http://www.globenewswire.com
SOURCE: Builders FirstSource, Inc.
CONTACT:Builders FirstSource, Inc.
M. Chad Crow, Senior Vice President and
Chief Financial Officer
(214) 880-3585
(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.
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