Builders FirstSource (BFS) plunged into red ink in 2010's fourth quarter, posting a net loss of $24.6 million, the company reported today. That loss represents a huge swing from its $6.6 million net income in 2009's fourth quarter that was due almost entirely to a $33.2 million tax benefit it booked that period.
Sales fell 4.3% to $147.1 million due to a combination of reduced volume and competitive pricing, reported the Dallas-based firm. On an operating basis, it swung to a loss from continuing operations of $24.5 million in the fourth quarter from a $6.2 million profit in the final three months of 2009. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to a $12.5 million loss in the quarter, compared with income of $6.6 million during the year-earlier period. Adjusted EBITDA for the year was a loss of $43.6 million.
"For the current quarter, the competitive pricing pressures we had seen throughout the first nine months of 2010 were still present, but we have recently seen signs that suggest pricing discipline may be returning to the market," said CEO Floyd Sherman.
Gross margin for the quarter was 19.1%, down from 19.7% in 2009, due to competitive pricing pressure.
Lumber and lumber sheet goods posted the highest sales of any segment, hitting $40.8 million for the quarter and accounting for 27.7% of total sales. The window and door segment was not far behind with $36.8 million in sales (25%). prefabricated components had $26 million in sales (17.7%), and millwork took in $16.7 million (11.3%). The "other" building products segment posted sales of $26.8 million, or 18.3% of total revenue.
The lumber and lumber sheet good segment also posted the highest sales for the year with $201.4 million, or 28.8% of the total sales. Windows and doors also finished second with $161 million in sales. Prefabricated components posted sales of $135.5 million for the year, while millwork had sales of $75.8 million and other building products and services had sales of $126.5 million.
For the year, BFS' net loss deepened to $95.5 million from $61.8 million in 2009. Sales, however, improved 3% to $700.3 million in 2010.
"We are seeing some signs that point to improvements in our business," Sherman said. "We are, however, optimistic abut the long-term outlook for our industry and believe Builders FirstSource is well positioned to take advantage of the recovery once it does come."