Builders FirstSource (BFS) announced today its income in the third quarter shrank by about one-third from the year-earlier period to reach $8.5 million. Sales rose 7.9% from 2013's third quarter to hit $434.9 million, but that number includes sales at four companies acquired recently. Same-store sales rose 5.3%.
At 22.5%, the Dallas-based dealer's gross margin percentage split the difference between the 23% it posted in 3Q13 and the 22% it recorded in this year's second quarter. Same-store sales would have gone up 6.6% but lower commodity prices cut revenues by 1.3 percentage points, CEO Floyd Sherman said in an earnings statement.
Sales, general and administrative expenses rose 13.3% in the quarter from a year earlier to total $9.6 million; that's 18% of sales, down from 2Q13's 18.8%.
BFS measures its performance via adjusted EBITDA--earnings plus depreciation and amortization, interest expense, income tax expenses, stock compensation expense, and acquisition cost. By that metric, adjusted EBITDA declined to $20.2 million in the third quarter, or 4.7% of sales, from a year earlier $23.0 million, or 5.7% of sales.
The company's revenue mix was roughly the same in the third quarter as it was in July through September of last year: Lumber and sheet goods contributed 32.6% of sales, down from 34.1%; window and door sales were 22.5% of the total (up from 21%); prefabricated components contributed 20.7% (from 20.6%); millwork provided 9.8% (up from 9.3%); and other building products and services provided 14.4% of all sales (down from 15%).
BFS has been an active participant in the acquisition markets this year. In recent months it has absorbed Sloan Lumber Co. in Houston; West Orange Lumber Co. in Orlando, Fla.; Truss Rite in Dallas; and Trim Tech of Austin, Texas. "On a trailing 12-month basis as of their respective acquisition dates, these companies had generated combined revenue of approximately $67 million, BFS said.
During the third quarter of 2014, BFS said, it used approximately $24.4 million of cash on hand to acquire West Orange and Truss Rite.
As for capital expenditures, that number was halved in the third quarter to $2.4 million. BFS said it expects to make $10 million in capital expenditures this quarter, mostly because it's relocating an existing facility in Texas and opening a new facility as well in that state.
At $122 million, goodwill continues to provide a notable share of BFS' $609.3 million in total assets. Meanwhile, the company has $353.8 million in long-term debt.