An "unprecedented" increase in commodity prices swamped the modest sales gains that Builders FirstSource (BFS) recorded during the first quarter and led to a net loss of $31.4 million during the period, slightly deeper than the $30.6 million net loss in 2009's first quarter.
Sales rose 1.1% to $161.4 million in the first quarter, primarily because of commodity inflation, Dallas-based BFS said. But the cost of sales jumped 4.7% from the year-earlier period to $131.9 million. That pushed the gross margin down by $4 million
"We experienced a 48.1% increase in commodity prices quarter-over-quarter," BFS CEO Floyd Sherman said. "While commodity prices were up dramatically, fixed pricing agreements with our customers, which range from 30, 60, and 90 days, prevented us from passing along a substantial portion of these increases to our customers. As a result of this unprecedented run-up in commodity prices during the quarter, combined with fixed pricing agreements with our customers, our gross margin fell to 18.2%, down from 21.0% in the first quarter of 2009."