U.S. markets open in 7 hours 43 minutes
  • S&P Futures

    3,905.75
    +2.00 (+0.05%)
     
  • Dow Futures

    31,444.00
    +23.00 (+0.07%)
     
  • Nasdaq Futures

    12,050.00
    +9.50 (+0.08%)
     
  • Russell 2000 Futures

    1,772.80
    +3.00 (+0.17%)
     
  • Crude Oil

    110.80
    +1.23 (+1.12%)
     
  • Gold

    1,827.40
    +2.60 (+0.14%)
     
  • Silver

    21.18
    +0.02 (+0.08%)
     
  • EUR/USD

    1.0579
    -0.0008 (-0.07%)
     
  • 10-Yr Bond

    3.1940
    0.0000 (0.00%)
     
  • Vix

    26.95
    -0.28 (-1.03%)
     
  • GBP/USD

    1.2269
    -0.0002 (-0.01%)
     
  • USD/JPY

    135.3910
    -0.0550 (-0.04%)
     
  • BTC-USD

    20,781.78
    -409.34 (-1.93%)
     
  • CMC Crypto 200

    452.03
    -9.77 (-2.12%)
     
  • FTSE 100

    7,258.32
    +49.51 (+0.69%)
     
  • Nikkei 225

    26,957.84
    +86.57 (+0.32%)
     

Builders FirstSource (BLDR) Rises on Q1 Earnings & Revenue Beat

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·5 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Builders FirstSource’s BLDR shares gained 6.3% after the company released its first-quarter 2022 results, wherein it reported solid core organic sales growth of 15%.

The company’s earnings and net sales surpassed the Zacks Consensus Estimate as well as increased significantly year over year. The results were driven by an increase in net sales and gross margin amid continuous raw material supply woes.

Dave Flitman, CEO of Builders FirstSource, said, “We started the year out strong achieving another quarter of record net sales, gross margin and Adjusted EBITDA, while also producing strong core organic sales growth of 15%. In addition, we continue to make progress investing prudently in our operations and delivering outstanding service to our customers as we work to overcome the supply chain constraints that persist throughout our industry. Our efforts to broaden our value-added products, which saw core organic sales up 31%, alongside our strategic investments in digital, are helping our customers get their jobs done quickly, on time and cost-effectively.”

Flitman added, “For 2022, we have increased our expectations for growth and significant free cash flow generation. We remain committed to deploying capital to high return internal investments, accretive bolt-on M&A and share repurchases.”

Earnings & Revenue Discussion

The manufacturer and supplier of building materials reported adjusted earnings of $3.90 per share, which handily topped the consensus mark of $2.15 by 81.4%.

For the quarter, net sales of $5.68 billion surpassed the consensus mark of $4.75 billion by 19.6%. The top line grew 36.1% on a year-over-year basis. Core organic sales grew 15% from the prior-year quarter. Commodity price inflation contributed 12.8% to net sales. Acquisitions added 8.3% to net sales growth. The upside was led by a solid demand for its products amid supply woes.

Notably, core organic sales in value-added products increased 30.8% compared with the prior-year period.

Core organic customer growth in Single Family increased 16.6%, while that of R&R/Other and Multi Family improved 9.5% and 10.2%, respectively.

Builders FirstSource, Inc. Price, Consensus and EPS Surprise

Builders FirstSource, Inc. Price, Consensus and EPS Surprise
Builders FirstSource, Inc. Price, Consensus and EPS Surprise

Builders FirstSource, Inc. price-consensus-eps-surprise-chart | Builders FirstSource, Inc. Quote

Sales According to Product Category

Value-Added Product Sales: For the reported quarter, sales of value-added products (comprising 41.7% of the quarterly net sales) were $2.37 billion, up 48.2% from the prior year.

Specialized Product & Other: Gypsum, Roofing & Insulation products sales (comprising 17.4% of the quarterly net sales) increased 22.6% from the year-ago quarter to $989.5 million.

Lumber & Lumber Sheet Goods: For the quarter, segment sales (comprising 40.9% of the quarterly net sales) increased 31.4% year over year to $2.33 billion.

Operating Highlights

Gross profit for the quarter increased 71.3% year over year to $1.8 billion. Gross margin of 32.3% expanded 670 basis points (bps) year over year owing to disciplined pricing in a volatile, supply-constrained marketplace and effective and timely sourcing. As a percentage of net sales, total SG&A expenses declined 270 bps to 17%.

Adjusted EBITDA increased 119.8% on a year-over-year basis to $1 billion, primarily driven by solid demand across key customer end markets, commodity inflation and pricing. Adjusted EBITDA margin expanded 670 bps year over year to 17.6%.

Other Financial Details

As of Mar 31, 2022, Builders FirstSource had cash and cash equivalents of $281.8 million compared with $42.6 million at 2021-end. Long-term debt — net of current portion — was $3.39 billion, up from $2.93 billion at 2021-end.

The company had liquidity of $1.2 billion at March 2022 end, consisting of approximately $0.9 billion in net borrowing availability under the revolving credit facility and cash on hand.

During the first quarter, BLDR repurchased 3.6 million shares of its stock for $286 million.

Buyouts

On Apr 1, 2022, BLDR wrapped up the acquisition of both the Texas Panel Truss and East Panel Truss businesses for an aggregate of $150 million.

Additionally, Builders FirstSource acquired Valley Truss Co., Inc. — a provider of building components to the single and multi-family markets in Boise, ID — for $30.5 million.

Guidance

The company expects free cash flow in the range of $2 billion to $2.4 billion for 2022. Interest expense is expected in the range of $175 million to $185 million. BLDR projects an effective tax rate between 23% and 25%, total capital expenditures between $375 million and $400 million, depreciation and amortization expenses between $440 million and $460 million for 2022.

Acquisitions will likely contribute to net sales growth between 5% and 6%.

Zacks Rank

BLDR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Few Recent Releases

Beacon Roofing Supply, Inc. BECN reported results for the first quarter of 2022. Earnings and revenues handily surpassed their respective Zacks Consensus Estimate and improved significantly on a year-over-year basis.

BECN’s solid results were mainly backed by strong net sales, gross margin expansion and operational improvement.

Fastenal Company FAST started 2022 on a solid note. The company’s first-quarter 2022 earnings and revenues not only beat the Zacks Consensus Estimate but also improved on a year-over-year basis.

Fastenal’s quarterly results benefited from strong demand for manufacturing and construction equipment and supplies along with higher pricing.

Quanta Services Inc. PWR reported impressive results for first-quarter 2022. Adjusted earnings and revenues surpassed the Zacks Consensus Estimate and increased impressively on a year-over-year basis.

Quanta’s adjusted earnings increased 65.1% from the year-ago period. The upside was backed by revenue growth across the segments, record total backlog, and a solid and safe project execution.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Quanta Services, Inc. (PWR) : Free Stock Analysis Report

Fastenal Company (FAST) : Free Stock Analysis Report

Beacon Roofing Supply, Inc. (BECN) : Free Stock Analysis Report

Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research