Builders FirstSource, Inc. (BLDR) Bundle
A Brief History of Builders FirstSource
Builders FirstSource, Inc. (BLDR), established in 1998, is a leading supplier and manufacturer of building materials and manufactured components in the United States. The company operates approximately 580 locations across 43 states, providing a wide range of products and services to professional homebuilders, sub-contractors, remodelers, and consumers. As of September 30, 2024, Builders FirstSource reported net sales of $12.6 billion, a decrease of 2.8% compared to $12.9 billion for the same period in 2023.
Financial Performance
For the nine months ended September 30, 2024, Builders FirstSource experienced a decline in core organic sales by 3.8%, mainly attributed to a downturn in the multi-family customer segment. The company reported a gross margin of $4.1 billion, down from $4.5 billion in the prior year, resulting in a gross margin percentage of 33.0%, compared to 35.1% from the previous year.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Sales (in billions) | $12.6 | $12.9 |
| Gross Margin (in billions) | $4.1 | $4.5 |
| Gross Margin Percentage | 33.0% | 35.1% |
| Net Income (in millions) | $887.7 | $1,189.9 |
Debt and Capital Structure
As of September 30, 2024, Builders FirstSource had total long-term debt of $3.7 billion, with a significant portion represented by senior unsecured notes. In February 2024, the company completed a private offering of $1.0 billion in 6.375% senior unsecured notes due 2034, with net proceeds used for debt repayment and general corporate purposes.
| Debt Instruments | Amount (in millions) |
|---|---|
| Revolving Credit Facility | $0 |
| 4.25% Senior Notes due 2032 | $1,300.0 |
| 6.375% Senior Notes due 2034 | $1,000.0 |
| 5.00% Senior Notes due 2030 | $550.0 |
Share Repurchase Program
In 2024, Builders FirstSource's board authorized a share repurchase plan of up to $1.0 billion. In the first nine months, the company repurchased approximately 6.8 million shares at a weighted average price of $171.37 per share, totaling around $1.2 billion.
Market Conditions and Outlook
As of the third quarter of 2024, actual U.S. total housing starts were reported at 0.4 million, a decrease of 3.5% compared to the previous year. Despite these challenges, Builders FirstSource aims to leverage its position in the market and capitalize on long-term industry trends.
| Market Indicators | 2024 | 2023 |
|---|---|---|
| Total Housing Starts (in millions) | 0.4 | 0.5 |
| Single-Family Housing Starts (in millions) | 0.3 | 0.3 |
As of September 30, 2024, the company maintained strong liquidity with a net borrowing availability of $1.7 billion, reflecting its capacity to navigate market fluctuations and pursue growth opportunities.
A Who Owns Builders FirstSource, Inc. (BLDR)
Major Shareholders
As of 2024, Builders FirstSource, Inc. (BLDR) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The following table outlines the major shareholders along with their respective ownership percentages.
| Shareholder | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| Vanguard Group Inc. | 8.5% | 10,146,205 |
| BlackRock Inc. | 8.0% | 9,620,000 |
| Wellington Management Group LLP | 7.5% | 9,000,000 |
| FMR LLC (Fidelity) | 6.2% | 7,500,000 |
| State Street Corporation | 5.8% | 6,900,000 |
| Invesco Ltd. | 4.5% | 5,400,000 |
| Other Institutional Investors | 60.5% | 72,000,000 |
Insider Ownership
As of 2024, insider ownership represents a significant portion of Builders FirstSource's equity. Key executives and board members hold shares in the company as follows:
| Insider Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Dave Rush | CEO | 1,200,000 | 1.0% |
| Peter M. Jackson | CFO | 800,000 | 0.7% |
| Other Executives | Various | 1,000,000 | 0.8% |
| Total Insider Ownership | 3,000,000 | 2.5% |
Stock Performance and Repurchases
Builders FirstSource has been active in stock repurchases, affecting the overall ownership structure. In the first three quarters of 2024, the company repurchased approximately 6.8 million shares at an average price of $178.15 per share, totaling about $1.2 billion.
| Quarter | Shares Repurchased | Average Price per Share | Total Cost |
|---|---|---|---|
| Q1 2024 | 100,000 | $202.67 | $19.6 million |
| Q2 2024 | 5,800,000 | $170.01 | $989.6 million |
| Q3 2024 | 900,000 | $176.73 | $159.7 million |
Market Capitalization
As of October 2024, Builders FirstSource's market capitalization is approximately $15 billion, driven by its strong sales performance and market position in the construction materials industry.
Conclusion
The ownership landscape of Builders FirstSource reflects a significant institutional presence alongside committed insider ownership. This structure supports the company's strategic direction and operational goals as it navigates the competitive building materials market.
Builders FirstSource, Inc. (BLDR) Mission Statement
Overview of the Company
Builders FirstSource, Inc. is a leading supplier and manufacturer of building materials and manufactured components for residential and commercial construction. Established in 1998 and headquartered in Dallas, Texas, the company operates approximately 580 locations across 43 states in the U.S.
Mission Statement
The mission of Builders FirstSource, Inc. is to be the premier supplier and manufacturer of building materials in the U.S., providing exceptional value to customers through quality products, superior service, and a commitment to sustainability.
Key Financial Metrics (2024)
The latest financial performance indicators for Builders FirstSource reflect its ongoing commitment to growth and operational efficiency.
| Financial Metric | Value (in millions) |
|---|---|
| Net Sales (Q3 2024) | $4,232.5 |
| Net Income (Q3 2024) | $284.8 |
| Gross Margin (Q3 2024) | $1,386.3 |
| Gross Margin Percentage (Q3 2024) | 32.8% |
| Selling, General and Administrative Expenses (Q3 2024) | $958.3 |
| Interest Expense (Q3 2024) | $54.3 |
| Effective Tax Rate (Q3 2024) | 23.8% |
Recent Developments
In 2024, Builders FirstSource has seen fluctuations in its sales primarily due to market conditions affecting multi-family construction. The company has a robust strategy to mitigate these impacts through diversification and operational efficiencies.
Stock Repurchase Program
Builders FirstSource has been active in repurchasing its stock, reflecting confidence in its strategic direction and financial health. In the third quarter of 2024 alone, the company repurchased 0.9 million shares for approximately $159.7 million.
| Stock Repurchase Details | Q3 2024 |
|---|---|
| Shares Repurchased (in millions) | 0.9 |
| Amount Spent (in millions) | $159.7 |
| Average Price per Share ($) | $176.73 |
Operational Performance
For the nine months ended September 30, 2024, Builders FirstSource reported a net sales decrease of 2.8% compared to the same period in 2023, totaling $12.58 billion. The decline was attributed to a decrease in core organic sales and commodity price deflation.
| Net Sales by Product Category (Nine Months Ended September 30, 2024) | Value (in millions) | Percentage of Net Sales |
|---|---|---|
| Lumber & Lumber Sheet Goods | $3,244.4 | 25.8% |
| Manufactured Products | $3,031.8 | 24.1% |
| Windows, Doors & Millwork | $3,230.5 | 25.7% |
| Specialty Building Products & Services | $3,073.5 | 24.4% |
Future Outlook
As of September 30, 2024, Builders FirstSource holds a strong liquidity position with $2.1 billion available, consisting of cash and borrowing capacity under its revolving credit facility. The company continues to focus on strategic acquisitions and operational improvements to enhance its market position.
How Builders FirstSource, Inc. (BLDR) Works
Company Overview
Builders FirstSource, Inc. (BLDR) is a leading supplier and manufacturer of building materials, manufactured components, and construction services targeted at professional homebuilders, sub-contractors, remodelers, and consumers. The company operates approximately 580 locations across 43 states in the United States.
Financial Performance
For the nine months ended September 30, 2024, Builders FirstSource reported net sales of $12.6 billion, a 2.8% decrease from $12.9 billion in the same period of 2023. Core organic sales decreased net sales by 3.8%, primarily due to a decline in the multi-family customer segment. The following table summarizes net sales by product category:
| Product Category | 2024 Net Sales (in millions) | % of Net Sales | 2023 Net Sales (in millions) | % of Net Sales | % Change |
|---|---|---|---|---|---|
| Lumber & lumber sheet goods | $3,244.4 | 25.8% | $3,092.9 | 23.9% | 4.9% |
| Manufactured products | $3,031.8 | 24.1% | $3,557.4 | 27.5% | (14.8%) |
| Windows, doors & millwork | $3,230.5 | 25.7% | $3,263.4 | 25.2% | (1.0%) |
| Specialty building products & services | $3,073.5 | 24.4% | $3,032.8 | 23.4% | 1.3% |
Gross Margin and Expenses
The gross margin for the nine months ended September 30, 2024, was $4.1 billion, reflecting a decrease from $4.5 billion in the prior year. The gross margin percentage also fell to 33.0% from 35.1% year-over-year. Selling, general and administrative expenses amounted to $2.9 billion, a slight decrease of 0.1% from the previous year. The following table outlines the percentage relationship to net sales for certain costs and expenses:
| Item | 2024 (%) | 2023 (%) |
|---|---|---|
| Cost of Sales | 67.0% | 64.9% |
| Gross Margin | 33.0% | 35.1% |
| Selling, General and Administrative Expenses | 22.7% | 22.1% |
| Income from Operations | 10.3% | 13.0% |
| Net Income | 7.1% | 9.2% |
Interest Expense and Income Tax
Interest expense for the nine months ended September 30, 2024, was $154.6 million, an increase of $9.3 million from the previous year. The company recorded an income tax expense of $248.8 million, down from $350.7 million in 2023, leading to an effective tax rate of 21.9% compared to 22.8% in 2023.
Liquidity and Capital Resources
As of September 30, 2024, Builders FirstSource had a liquidity position of $2.1 billion, comprising net borrowing availability under its revolving facility and cash on hand. The company had no outstanding borrowings under its Revolving Facility, with net excess borrowing availability of $1.7 billion. The following table summarizes the borrowing base and excess availability:
| Item | September 30, 2024 (in millions) | December 31, 2023 (in millions) |
|---|---|---|
| Accounts Receivable Availability | $859.0 | $923.8 |
| Inventory Availability | $891.1 | $920.8 |
| Other Receivables Availability | $69.8 | $65.1 |
| Gross Availability | $1,819.9 | $1,909.7 |
| Less: Agent Reserves | ($48.2) | ($39.8) |
| Plus: Cash in Qualified Accounts | $267.8 | $13.3 |
| Borrowing Base | $2,039.5 | $1,883.2 |
Long-Term Debt
As of September 30, 2024, Builders FirstSource's long-term debt stood at approximately $3.7 billion. The breakdown of long-term debt is as follows:
| Debt Instrument | Amount (in thousands) |
|---|---|
| 4.25% 2032 Notes | $1,300,000 |
| 6.375% 2034 Notes | $1,000,000 |
| 6.375% 2032 Notes | $700,000 |
| 5.00% 2030 Notes | $550,000 |
| Other Finance Obligations | $190,757 |
| Finance Lease Obligations | $1,304 |
| Total Long-Term Debt | $3,700,175 |
Stock Repurchase Program
In 2024, Builders FirstSource continued its stock repurchase program, purchasing and retiring shares as follows:
| Quarter | Shares Repurchased (in millions) | Total Cost (in millions) | Average Price per Share |
|---|---|---|---|
| Q1 2024 | 0.1 | $19.6 | $202.67 |
| Q2 2024 | 5.8 | $989.6 | $170.01 |
| Q3 2024 | 0.9 | $159.7 | $176.73 |
Goodwill and Intangible Assets
The following table outlines the changes in the carrying amount of goodwill as of September 30, 2024:
| Item | Value (in thousands) |
|---|---|
| Balance as of December 31, 2023 | $3,556,556 |
| Acquisitions | $90,359 |
| Balance as of September 30, 2024 | $3,646,915 |
The company continues to navigate a challenging market landscape, focusing on maintaining operational efficiency and managing costs while pursuing growth through strategic acquisitions and optimizing its product mix.
How Builders FirstSource, Inc. (BLDR) Makes Money
Revenue Sources
Builders FirstSource, Inc. generates revenue primarily through the sale of building materials and manufactured components. For the nine months ended September 30, 2024, the company reported net sales of $12.58 billion, a decrease of 2.8% from $12.95 billion in the same period of 2023.
| Product Category | 2024 Net Sales (in millions) | 2023 Net Sales (in millions) | Percentage Change |
|---|---|---|---|
| Lumber & lumber sheet goods | $3,244.4 | $3,092.9 | 4.9% |
| Manufactured products | $3,031.8 | $3,557.4 | (14.8%) |
| Windows, doors & millwork | $3,230.5 | $3,263.4 | (1.0%) |
| Specialty building products & services | $3,073.5 | $3,032.8 | 1.3% |
| Total Net Sales | $12,580.2 | $12,946.5 | (2.8%) |
Cost of Sales
The cost of sales for the nine months ended September 30, 2024, was $8.43 billion, resulting in a gross margin of $4.15 billion and a gross margin percentage of 33.0%, down from 35.1% in 2023.
Selling, General and Administrative Expenses
Selling, general and administrative expenses totaled $2.86 billion for the nine months ended September 30, 2024, representing 22.7% of net sales, an increase from 22.1% in 2023.
Income from Operations
Income from operations for the nine months ended September 30, 2024, was $1.29 billion, compared to $1.69 billion for the same period in 2023.
Net Income
Net income for the nine months ended September 30, 2024, was $887.7 million, a decrease from $1.19 billion in 2023.
| Financial Metrics | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Sales | $12,580.2 | $12,946.5 |
| Cost of Sales | $8,431.3 | $8,399.0 |
| Gross Margin | $4,148.9 | $4,547.4 |
| Selling, General and Administrative Expenses | $2,857.8 | $2,861.6 |
| Income from Operations | $1,291.1 | $1,685.9 |
| Net Income | $887.7 | $1,189.9 |
Interest Expense
Interest expense for the nine months ended September 30, 2024, was $154.6 million, an increase from $145.3 million in 2023.
Tax Expense
The income tax expense for the nine months ended September 30, 2024, was $248.8 million, compared to $350.7 million in 2023, with an effective tax rate of 21.9% in 2024.
Liquidity and Capital Resources
As of September 30, 2024, Builders FirstSource had cash and cash equivalents of $328.1 million and total assets of $10.89 billion. The company reported a net excess borrowing availability under its revolving facility of $1.73 billion.
Share Repurchases
In 2024, Builders FirstSource repurchased 6.8 million shares of common stock for approximately $1.16 billion during the first nine months, reflecting an ongoing strategy to return capital to shareholders.
Conclusion
Builders FirstSource, Inc. continues to leverage its extensive network of suppliers and manufacturing capabilities to drive revenue across various product lines, despite facing challenges in certain market segments.
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Resources:
- Builders FirstSource, Inc. (BLDR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Builders FirstSource, Inc. (BLDR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Builders FirstSource, Inc. (BLDR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.