Builders FirstSource (BFS), America's biggest full-service pro lumberyard, rebounded to a $3.8 million net profit in the first quarter from a year-earlier $17 million net loss thanks in big part to a 9.7% rise in net sales to $1.5 billion.

Commodity price inflation--most likely higher prices for lumber and sheet goods--accounted for 4.1 points of that increase, the Dallas-based dealer reported today, but that same inflation caused gross margins to slip to 24.5% from 1Q16's 25.0%. Sales at stores in operations in both 2016 and 2017's January-to-March quarters grew 10.2%.

Cost efficiencies being wrung out of the 2015 merger with ProBuild helped sales, general, and administrative expenses to drop to 21.9% of sales from a year-earlier 23.4%, the company said.

"From a sales volume perspective, we grew 7.2% in single-family new residential sales versus a 5.9% increase in single-family starts as reported by the U.S. Census Bureau," CEO Floyd Sherman said in the company's earnings release. "Our quarterly sales volume growth in the repair and remodeling end market was 6.4%.  Additionally, our investments in manufacturing capacity are driving returns, with sales of our manufactured products growing 15.1% over the first quarter of 2016."

The balance sheet shows that goodwill accounts for $744 million of the company's $3.02 billion in assets, while on the liability side it has $1.93 billion in long-term debt and lease obligations. Regarding that debt, CFO Peter Jackson said cash flow generation and debt reduction "will continue to be a priority for the balance of 2017, and we are on track to generate $145 million to $155 million of free cash flow in the year. We are executing on our multi-year plan to de-lever the balance sheet and fund growth initiatives, enabled through cost savings realization, earnings expansion, disciplined capital expenditures, utilization of our tax assets, and opportunistic capital markets transactions."

BFS likes to measure its performance in terms of adjusted EBITDA, which it defines as earnings before interest, taxes, depreciation, and amortization, as well as integration related costs, debt issuance and refinancing costs, and facility closure costs. By that metric, BFS swung to a positive 1Q17 adjusted EBITDA of $12.1 million from a year-earler negative $14.2 million.

Sales of lumber and sheet goods leaped 15.1% to hit $530.7 million, or roughly one-third of all sales.