BMC’s Net Income Up 32.5%, Multifamily Sales Up 9.4%

Originally published by: ProSales MagazineMay 8, 2019

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BMC Stock Holdings experienced healthy growth in net income and gross profit year over year (YOY) during the first quarter of 2019, while net sales were negatively impacted by price deflation, the company reported in its first quarter earnings report. The dealer reported a net income of $20.4 million in the first quarter, a 32.5% increase YOY from the first quarter of 2018.

BMC logo

Net sales for the Raleigh, N.C.-based dealer declined YOY, however. Net sales decreased 1.1% YOY to $825.4 million in the first quarter of 2019. BMC attributed the decrease to commodity price deflation, one less selling day during the quarter, and the disposition of the Coleman Floor business in November 2018. The decreases from these factors were partially offset by an increase in net sales of 3.2% from the acquisition of Barefoot and Company in JanuaryLocust Lumber in February, and Shone Lumber last February and a 3.2% increase as a result of organic growth.

BMC’s net sales to single-family builders in the first quarter declined 1.6% YOY, net sales to remodelers declined 8.3% YOY, and net sales to multifamily, commercial, and other contractors increased 9.4% YOY.

“Coming on the heels of our exceptional 2018 operating performance, we are pleased to deliver a strong start to 2019, reflecting continued solid execution of our strategy and stable levels of construction activity in our markets,” Dave Flitman, president and CEO of BMC, said in a public statement. “Solid 3.2% organic growth helped to offset the top line declines we projected due to commodity price deflation and one less selling day, and our team’s commitment to driving continuous improvement led to increased profitability and cash generation.”

BMC’s gross profit in the first quarter increased 8.6% YOY to $216.1 million. Gross profit as a percentage of sales rose 2.3% YOY to 26.2%. The improvement in overall gross margin came as a result of a 3.1% improvement YOY in gross margin within the lumber and lumber sheet goods category and a 5.7% improvement within structural components, according to BMC.

Adjusted EBITDA rose 15.3% YOY to $54.4 million. Adjusted EBITDA margin increased 90 basis points to 6.6%.

The company’s balance sheet shows goodwill account for $275.8 million of its $1.7 billion in assets as of March 31, 2019. Long-term debt accounts for $345.4 million of the company’s liabilities.