Net loss at Builders FirstSource (BFS) improved to $11.6 million during the third quarter from a $20.5 million loss during the same period last year, the company announced today. The improvement at America's ninth-largest building material dealer comes behind a 20% increase in net sales to $217.2 million.
The company prefers to view its results using adjusted EBITDA, which it defines as net loss before depreciation and amortization, interest expense, income taxes, loss on sale of assets, loss from discontinued operations, and other non-cash or special items including asset impairments, facility closure costs, severance, recapitalization costs, expensed acquisition costs, and stock compensation expense. The Dallas-based dealer posted a negative adjusted EBITDA of $700,000, a large improvement compared with the $8.3 million hole it was in a year ago. CEO Floyd Sherman said it was the company's best operating results in four years.
"This also marks the third consecutive quarter of improved adjusted EBITDA results when compared to the same quarter of the prior year, in spite of a very weak housing market," said Sherman.
Loss from continuing operations was $11.5 million, an improvement of over $8 million compared with third quarter 2010's operating loss. Gross margin for the quarter jumped 25% to $44.4 million.
BFS kept facility closure costs at $115,000 after posting more than twice that much a year ago. The dealer also saw selling, general, and administrative expenses increase by almost $3 million to $50.2 million. There was also a $268,000 tax expense and loss from discontinued operations fell 82% to $101,000.
As for the various subsidiaries, the BFS' lumber and lumber sheet good segment posted sales of $61.9 million, a 24% jump over the same period a year ago. Sales of windows and doors rose 25% to $51.3 million, while prefabricated component sales were $41 million, an increase of 13%. Millwork sales also improved 13% to $22.3 million and other building products and services brought in sales of $40.8 million, a 22% rise compared to the same time a year ago.
"Housing demand remains weak due to the struggling economy, high unemployment, and the limited availability of mortgage financing," Sherman said. "Though these conditions persist, we are still optimistic about the long-term outlook of the industry, due largely to the increasing disparity between the current low level of housing starts and the on-going housing demand created by current demographic trends."
BFS is currently No.9 on the latest ProSales 100 listing with 2010 sales of $700 million and has roughly 2,500 employees and nearly 100 facilities from Texas to the Atlantic coast.