BFS’ Manufactured Products Nets Sales Up 9.1% in Q4
Originally published by: Seeking Alpha — February 28, 2019
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Commenting on the results, CEO Chad Crow remarked, “I am very pleased with the performance our team delivered in 2018 by focusing on exceptional customer service and disciplined execution. As overall market growth moderated, we managed to produce solid growth driven by our differentiated platform in the single family end market, delivered on our long-term strategic priority of deleveraging, and demonstrated the strength of our close customer relationships across our national footprint. I am confident that we will continue to deliver strong results from our strategic initiatives in high margin value-added products and operational excellence programs. I thank our team members who worked relentlessly throughout the year to build a more durable, value-added solutions platform that creates enhanced value for our customers, shareholders and other stakeholders and look forward to 2019 as we continue to build on our success.”
Peter Jackson, CFO, added, “We finished the year with a strong fourth quarter, in which we grew our single family customer segment by 4.5 percent, faster than the single family end market. Our fourth quarter Adjusted EBITDA grew by 29 percent, or $28.1 million, to generate full year Adjusted EBITDA of $502 million. We improved our 2018 Adjusted EBITDA margin by 50 basis points and Adjusted net income by more than 50 percent.”
Noted Fourth Quarter 2018 Results Compared to Fourth Quarter 2017:
- Net sales for the fourth quarter ending December 31, 2018 were $1.8 billion, a 2.1 percent increase compared to a year ago with value-added products sales per day grew by 9.1 percent in manufactured products.
- Gross margin of $492.8 million in the fourth quarter of 2018 increased by $61.6 million, or 14.3 percent, over the prior year. The margin percentage increase was attributable to the sharp decline in the cost of commodities during the quarter, combined with continued pricing discipline and growth in value-added products.
- Net income for the fourth quarter of 2018 was $52.0 million, or $0.45 per diluted share, compared to a net loss of ($42.7) million, or ($0.38) per diluted share, for the fourth quarter of 2017 due to the improved operating results in the fourth quarter of 2018 and the one-time premium paid related to the refinancing transactions in the prior year.
Full Year December 31, 2018 Financial Information:
- Net sales for the full year 2018 were $7.7 billion, a 9.8 percent increase over the prior year comprised of an estimated sales unit volume growth of 3.2 percent and approximately 6.6 percent of commodity price inflation. Single-family and repair and remodel / other end market sales unit volume growth in 2018 was partially offset by expected declines in the multi-family end markets. Additionally, value-added products grew by 10.5 percent.
- Gross margin increased for the full year 2018 by $195.5 million to $1,922.9 million. Gross margin percentage increased to 24.9 percent from 24.6 percent in 2017, a 30 basis point increase. The pressure experienced on gross margin percentage during the first half of 2018, due to rising commodity costs relative to our customer pricing commitments, was more than offset by the sharp decline in commodity costs during the second half of the year.
- Net income for the full year 2018 was $205.2 million, or $1.76 per diluted share, compared to $38.8 million, or $0.34 per diluted share, in 2017, an increase of $1.42 per diluted share driven by improved operating results for the full year 2018 and the one-time costs related to the refinancing transactions in the prior year.
Concluding, Mr. Crow added, “We continued to show double-digit growth in value-added products, partnering with our customers in joint efforts to reduce construction costs and help mitigate labor shortages. Our team also made significant progress on our operational excellence initiatives, driving towards a more agile and efficient operating platform.”