Builders FirstSource, Dallas, narrowed its fourth-quarter net loss to $12.05 million from $16.7 million a year earlier as sales jumped nearly 50% to $287.59 million for the same period, the company reported after the market's close Thursday. Of the sales gains, BFS senior vice president and CFO Chad Crow said in a statement, 38% can be attributed to increased volume and 11% to price increases. Margins dipped 0.2 percentage points to 20.2% during the quarter from a year earlier. The company posted its first EBITA-positive quarter since 2007, with $3.43 million in adjusted EBITDA compared to a $3.3 million EBITDA loss a year earlier.
For the year, BFS posted a net loss of $56.86 million compared to a loss of $64.6 million a year earlier. Sales climbed 37.4% to $1.07 billion from 2011 while margins held steady at approximately 20%.
Lumber sales jumped to $96.5 million during 4Q, one-third of the quarter's sales, from $54.3 million and 28.2% of sales a year earlier. But lumber pricing pressure—driven by quarter-over-quarter prices increases of 23% during the quarter—is making the dealer wary about long-term guarantees. "It is still a highly competitive market. We still have more supply than there is demand and that's what's really affecting the issue," BFS CEO Floyd Sherman told analysts in a call Feb. 22. "At these higher [pricing] levels, you can't afford to make a mistake. I think people will become more cautious in their pricing to avoid being hit with a catastrophe as they begin to price further and further out."
Stabilized prices and more housing starts, Sherman says, will ease pricing pressure and push margin growth. BFS recorded 9.2 inventory turns and averaged 30 days in accounts receivable during 4Q. During the quarter the company eliminated cash collateral on its credit lines, contributing to a $13 million capital gain during the quarter.
The pro-focused dealer ranked eighth on the last year's ProSales100 listing with $779.0 million in sales to the pros—100% of its total volume—across 95 locations during 2011.
The company will hold a call with analysts Friday, Feb. 22 at 10 a.m. CST. Check back here for a recap.
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