BMC Net Sales Up 11.1% in Q2, ReadyFrame Sales Top $45M

Originally published by the following source: Seeking AlphaAugust 3, 2017

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BMC Stock Holdings, Inc.,  one of the leading providers of diversified building products and services in the U.S. residential construction market, today announced its financial results for the second quarter ended June 30, 2017.

Second Quarter 2017 Highlights (Comparisons are to Prior Year Period)

  • Grew net sales by 11.1% to $886.4 million, including significant growth in Ready-Frame® sales
  • Delivered net income of $17.6 million, including merger and integration costs of $6.3 million, compared to net income of $18.0 million in the prior year period, including merger and integration costs of $3.6 million
  • Increased Adjusted EBITDA (non-GAAP) to $59.6 million, up 3.6%
  • Recorded diluted earnings per share of $0.26, compared to $0.27 in the prior year period
  • Expanded adjusted net income per diluted share (non-GAAP) by $0.02 to $0.34
  • Refined expectation of total annual run rate cost savings from the merger to a range of $48 million to $52 million by the end of 2017

Peter Alexander, President and Chief Executive Officer of BMC, commented, “Continuing the solid top-line growth trends that we saw late in the first quarter, we achieved second quarter net sales growth of 11.1%.  We continue to be pleased with the strong performance of Ready-Frame®, which delivered $45 million of sales in the quarter and, in part, helped drive our 14% increase in sales of structural components.  This whole-house solution continues to gain significant traction as we provide builders a way to effectively navigate a tough labor environment, save money and shorten cash conversion cycle times.  In addition, our recent acquisitions contributed $19.2 million in revenue during the quarter, and we continue to pursue additional opportunities to further drive profitable growth.”

Jim Major, Executive Vice President and Chief Financial Officer of BMC, added, “Volatility in the cost of lumber and lumber sheet goods constrained our gross margin percentage in the second quarter, and recent Canadian wildfires have extended this period of market volatility into the third quarter.  However, over the longer-term, we anticipate our gross margin percentage will improve relative to our second quarter 2017 performance and commodity inflation will ultimately provide a more significant tailwind for our operating results.  Our team remains intently focused on driving growth in our value-added product offerings and higher-margin customer categories while, at the same time, executing initiatives to further rationalize our cost structure and improve our operating results.  During the second quarter, we realized an additional $2.8 million of merger-related cost synergies, primarily within cost of sales, and have refined our estimate of total annualized merger-related cost savings to $48 million to $52 million by the end of 2017.”