Builders FirstSource (BFS), the No. 8 pro dealer on the ProSales 100, announced today its net loss shrank to $11.8 million in the first quarter from $19.2 million in the year-earlier period on a 45.7% surge in sales to $319.7 million.
The Dallas-based dealer prefers to measure its progress by adjusted EBITDA--net income before depreciation and amortization, interest expense, income taxes, gain or loss on sale of assets, income or loss from discontinued operations, and other non-cash or special impairments such as severance and facility closure costs. By that metric, the company swung to a $5.4 million positive adjusted EBITDA from a negative $2.1 million showing in the first three months of 2012.
"We were able to achieve topline growth of greater than 30% for a sixth consecutive quarter," chief executive officer Floyd Sherman said in a statement. He noted that single-family housing starts in the southern U.S., where BFS operates, increased 27.4% in the same period.
Gross margins declined to 19.5% from a year-earlier 20.6%. Increased sales volume was worth 0.7 point worth of growth from 2012's showing, but increased lumber prices ended up cutting last year's margin by 1.8 points. "While we were able to obtain price increases from many of our customers during the quarter, they were not enough to offset the continued commodity price inflation [for lumber]," chief financial officer Chad Crow said.
The impact of those price changes showed up most notably in BFS' report that sales of lumber and lumber sheet goods surged 75.8% to $116.8 million. In contrast, sales of prefabricated components increased only 39.9% to $60.8 million, window and door sales grew 27.9% to $63.6 million, and millwork revenues grew 35.7% to $29.1 million. Sales of other building products--up 29.5% to $49.4 million--contributed the rest.
BFS estimated that, of its 45.7% gain in sales to $319.7 million, increased volume contributed 29.7% and price accounted for 16% of the gain.
While the company swung to an operating profit of $1.2 million in the first quarter from a $5.8 million year-earlier loss, hefty interest expenses--$12.5 million in January through March--meant that it continued to show a pretax loss from continuing operations of $11.3 million, improving from 1Q12's $18.9 million loss. Also of note, 19.7% of its $563.5 million in total assets comes from goodwill.
BFS runs 53 distribution centers and 44 manufacturing facilities in nine states, most of them in the Southeast. It reported $779 million in revenue in 2011, all of it to pros.