Specialty dealer Foundation Building Materials (FBM), posted an increase in net sales and net income during the second quarter of 2019. Tustin, Calif.–based FBM recorded net sales of $559.9 million in the second quarter, an increase of 7.2% year over year. FBM posted a net income of $14.7 million in the second quarter, a $13.2 million improve­ment from its net income for the same period the year before. Net sales from FBM’s base business increased 3.4% YOY to $499 million and average daily base business net sales also grew 3.4% YOY, which was primarily driven by strong commercial activity and product expansion into new geographic markets, according to the company. FBM anticipates its May acquisition of Select Acoustic Supply will contribute between $10 million and $12 million to its net sales.
“Our strong underlying profitability highlighted our second quarter results,” said FBM president and CEO Ruben Mendoza in a press release. “Despite adverse weather affecting our net sales, we continue to see solid demand in our core nonresidential construction markets, and we are on track to exceed our financial objectives for the year.”
The company’s gross profit rose $25.2 million YOY to $171.5 million in the second quarter, which FBM attributed to an expansion of its gross margin and an increase in sales from acquisitions and base business growth. That Q2 gross margin rose 2.6% YOY to 30.6%. The specialty dealer attributed the increase in gross margin to improved profitability across product lines, driven by ongoing pricing and purchasing initiatives.
FBM’s adjusted EBITDA for the second quarter rose 9.0% to $50.3 million, and the dealer reported an adjusted EBITDA margin of 7.4% for the quarter.
FBM’s balance sheet as of June 30, 2019 shows goodwill accounts for $490.6 million of the company’s $1.45 billion in total assets.