Net sales declined during the fiscal third quarter at Builders FirstSource (BFS), driven largely by lower core organic sales and commodity deflation during the period.
“I’m proud of our resilient third quarter performance as we maintained a mid-teens EBITDA margin by leveraging our distinct competitive advantages and differentiated business model,” CEO Dave Rush said. “Our six acquisitions during the third quarter reinforce our commitment to investing in value-added products to enhance our margin profile.”
Net sales for the dealer in the third quarter was $4.2 billion, a 6.7% year-over-year decrease. The decline was driven by a 7.2% decline in core organic sales as the multifamily sector continues to trend downward. Core organic net sales declined 7.2%; single-family core sales declined 4.6%, multifamily sales declined 30.9%, and repair and remodel sales increased 0.8% year-over-year.
Gross profit for the quarter was 1.4%, a decrease of 12.3% while gross profit margin percentage decreased 210 basis points to 32.8%. Net income decreased 36.9% to $284.8 million while net income as a percent of sales decreased 323 basis points to 6.7%.
Adjusted EBITDA for BFS decreased 23.0% to $626.5 million, driven by lower gross profit, partially offset by lower operating expenses. Adjusted EBITDA margin declined by 310 basis points to 14.8%. EBITDA margin has remained in the mid-teens or better for 14 consecutive quarters
As previously announced, Rush is retiring from his role as president and CEO. He will remain on the board of directors and continue as a special advisor to ensure a smooth leadership transition.
“It has been an honor to serve this great company as CEO for the past two years capping off my more than 25 years of service through various levels of the business,” Rush said. “We have the best people in the industry and the opportunity to be CEO of BFS has truly been the joy and highlight of my career.”
Peter Jackson, the company’s CFO, is transitioning into the role of CEO. Pete Beckmann will replace Jackson in the role of CFO for BFS.
“I want to thank the board for their confidence in Pete Beckmnn and me to drive the BFS strategy, which will continue to be focused on growing value-added products and services, driving operational excellence, investing in digital solutions and innovation, and continue to build our high-performing culture,” Jackson said. “As a trusted partner to home builders, we are helping solve industry pain points with our best-in-class product portfolio and scale, industry-leading digital solutions, and an exceptional team dedicated to customer service. I am confident we are well positioned to take advantage of the many opportunities in front of us.”
