BFS Sees Manufactured Product Sales Increase 8.8% in Q1
Builders First Source (BFS) reported 2020 Q1 sales of $1.78 billion, up 9.5% over Q1 2019. Organic growth increased 3.9% while acquisitions contributed 3.5% to the increase in sales. Manufacturing Products, which includes component sales for BFS increased 8.8% in Q1. Demand increased across three customer end markets. Single-family, repair and remodel/other, and multi-family estimated sales volume grew on a per day basis by 7.9%, 2.2% and 19%, respectively.
Q1 net income for BFS was $8.76 million, or $0.07 per diluted share, down from Q1 2019 EPS of $0.31, largely due to a one-time interest expense charge of $28.0 million. BFS initiated steps to enhance its financial flexibility, liquidity, and cash flow through minimizing capital expenditures, optimizing working capital, and limiting operating expenses. BFS significantly improved its cash position to $163 million up from $14 million at the end of Q1 2019. CFO Peter Jackson described the efforts “over the past several months, we have initiated prudent and proactive actions to enhance our financial flexibility, liquidity and cash flow in response to the COBID-19 pandemic. As of April, our balance sheet is well situated with approximately $1.0 billion of liquidity and no significant debt maturities until 2027.”
Peter Jackson continued, “we have a prudently levered balance sheet and strong liquidity position to face the challenges ahead. While overall first quarter results were strong, the economic impact of COVID-19 slowed our momentum during the final week of March. This dynamic continued into April, resulting in a high single digit decline in Core Organic net sales for the month. This was due to some builders shutting down certain construction sites, understaffing at some critical government offices, and more complex logistics to accommodate general precautions at construction sites to limit spread of the virus, as well as numerous social distancing guidelines deferring some near-term home buying activity. While the market environment is likely to weakening through the second quarter 2020, we believe there will be a continued base level of demand for our essential products and services. Our superior product offering, financial strength and commitment to safety makes us the supplier of choice for building materials and value-added products in the months and years to come.”