Builders FirstSource Reports First Quarter 2025 Results

Builders FirstSource, Inc. (the “Company”) reported its results for the first quarter ended March 31, 2025.

First Quarter 2025 Highlights
All Year-Over-Year Comparisons Unless Otherwise Noted:

• Net sales were $3.7 billion, a 6.0% decrease, driven by lower core organic sales, one fewer selling day, and commodity deflation, partially offset by growth from acquisitions.
• Gross profit margin decreased 290 basis points to 30.5%, primarily driven by Single- and Multi-Family margin normalization as well as a below-normal starts environment.
• Net income was $96.3 million, or diluted EPS of $0.84 compared to diluted EPS of $2.10 in the prior year period. Net income as a percent of net sales decreased by 402 basis points to 2.6%.
• Adjusted EBITDA decreased 31.7% to $369.2 million, primarily driven by lower gross profit, partially offset by lower operating expenses after adjustments.
• Adjusted EBITDA margin declined by 380 basis points to 10.1%, attributable to lower gross margin and reduced operating leverage.
• Cash provided by operating activities was $132.3 million, a decrease of $184.9 million compared to the prior year period. The Company’s free cash flow was $45.0 million, a decrease of 80.2%, compared to $227.6 million in the prior year period. The decrease was primarily driven by lower net income.
• The Company repurchased 0.1 million shares of common stock at an average price of $131.51 for $12.8 million, inclusive of applicable fees and taxes.

“Given the current environment, I’m proud of our resilient results in the first quarter. These results reflect the strength of our differentiated product portfolio and our focus on operational excellence. While macro and industry dynamics continue to be unsettled, we remain confident in our ability to navigate any challenges by staying rooted in our strategy and focusing on the factors within our control. During these uncertain times, our role as trusted partners is vital as we help customers address affordability challenges and increase efficiency. We are laying the groundwork for future growth, and as the market recovers, we expect to outperform,” commented Peter Jackson, CEO of Builders FirstSource.

Mr. Jackson continued, “We are committed to advancing our strong foundation and driving value creation for customers through investments in innovation. Our significant investments in value-added products, digital tools, and internal systems are cementing our leading industry position.”

Pete Beckmann, CFO of Builders FirstSource, added, “Our first quarter results were driven by our durable business model and unwavering commitment to executing our strategy. We have a proven track record of generating strong free cash flow through the cycle and deploying capital in a disciplined manner in line with our capital allocation priorities. Our scale, differentiated platform, and talented team members give us confidence that we can compound value into the future. Despite the competitive environment, we are staying focused and investing for our future success.”

First Quarter 2025 Financial Performance Highlights
All Year-Over-Year Comparisons Unless Otherwise Noted:

Net Sales

• Net sales were $3.7 billion, a 6.0% decrease, driven by an 8.1% decline in core organic sales, a headwind from one fewer selling day of 1.6%, and commodity deflation of 1.0%, partially offset by growth from acquisitions of 4.7%.
• Core organic net sales declined 8.1%. Multi-Family declined 32.7% and Single-Family declined 5.9%, while Repair and Remodel (“R&R”)/Other increased 3.6%. On a weighted basis, Multi-Family and Single-Family lowered net sales by 4.6% and 4.2%, respectively, while R&R/Other raised sales by 0.7%.

Gross Profit

• Gross profit was $1.1 billion, a decrease of 14.2%. Gross profit margin percentage decreased 290 basis points to 30.5%, primarily driven by Single- and Multi-Family margin normalization as well as a below-normal starts environment.

Selling, General and Administrative Expenses

• SG&A was $930.8 million, an increase of $4.5 million, or 0.5%, primarily driven by additional expenses from operations acquired within the last twelve months and our ongoing enterprise resource planning system implementation, partially offset by lower variable compensation due to lower core organic sales and lower intangible amortization. As a percentage of net sales, total SG&A increased by 160 basis points to 25.4%, primarily attributable to reduced operating leverage.

Interest Expense

• Interest expense, net increased $16.6 million to $64.9 million, primarily due to higher average debt balances.

Income Tax Expense

• Income tax expense was $23.2 million, compared to $66.5 million in the prior year period, primarily driven by a decrease in income before income tax. The effective tax rate in the first quarter decreased 100 basis points year-over-year to 19.4%, primarily related to favorable permanent and other differences, partially offset by a lower stock-based compensation windfall benefit.

Net Income

• Net income was $96.3 million, or $0.84 earnings per diluted share, compared to net income of $258.8 million, or $2.10 earnings per diluted share, in the same period a year ago. The 62.8% decrease in net income was primarily driven by lower gross profit and higher net interest expense, partially offset by lower income tax expenses.
• Net income as a percentage of net sales was 2.6%, a decrease of 402 bps from the prior year period, primarily due to lower gross profit margins and higher net interest expense, partially offset by lower income tax expenses.

Adjusted Net Income

• Adjusted net income was $172.9 million, a decrease of 47.2%, primarily driven by lower gross profit and higher net interest expense, partially offset by lower operating expenses after adjustments and lower income tax expenses.

Adjusted Earnings Per Diluted Share

• Adjusted earnings per diluted share was $1.51, compared to $2.65 in the same period a year ago. The 43.0% decrease was primarily driven by lower adjusted net income, partially offset by share repurchases.

Adjusted EBITDA

• Adjusted EBITDA decreased 31.7% to $369.2 million, primarily driven by lower gross profit, partially offset by lower operating expenses after adjustments.
• Adjusted EBITDA margin declined by 380 basis points from the prior year period to 10.1%, primarily due to lower gross profit margins and reduced operating leverage.

Capital Structure, Leverage, and Liquidity Information

• For the three months ended March 31, 2025, cash provided by operating activities was $132.3 million, and cash used in investing activities was $912.1 million. The Company’s free cash flow was $45.0 million, compared to $227.6 million in the prior year period, largely the result of lower net income and an increase in net working capital.
• Liquidity as of March 31, 2025, was approximately $1.1 billion, consisting of $944 million in net borrowing availability under the revolving credit facility and $115 million of cash on hand.
• As of March 31, 2025, LTM Adjusted EBITDA was $2.2 billion and net debt was $4.4 billion, resulting in the net debt to LTM Adjusted EBITDA ratio of 2.0x, compared to 1.1x in the prior year period.
• In the first quarter, the Company repurchased 0.1 million shares of its common stock at an average price of $131.51 per share for $12.8 million, inclusive of applicable fees and taxes.
• In April 2025, the Company repurchased 3.3 million shares of its common stock at an average price of $118.27 per share for $390.9 million, inclusive of applicable fees and taxes.
• On April 30, 2025, the Board of Directors authorized the repurchase of up to $500 million of the Company’s outstanding shares of common stock, which includes the approximately $100 million remaining under its prior $1 billion share repurchase authorization announced in August 2024.
• Since the inception of its buyback program in August 2021, the Company has repurchased 99.3 million shares of its common stock, or 48.1% of its total shares outstanding, at an average price of $80.90 per share for a total cost of $8.0 billion, inclusive of applicable fees and taxes.

Productivity Savings From Operational Excellence

• For the first quarter, the Company delivered approximately $17 million in productivity savings related to operational excellence and supply chain initiatives.
• The Company expects to deliver $70 million to $90 million in productivity savings in 2025.

2025 Full Year Total Company Outlook

For 2025, the Company expects to achieve the financial performance highlighted below. Projected Net Sales and Adjusted EBITDA include the expected impact of price, commodities, and margins for 2025.

• Net Sales to be in a range of $16.05 billion to $17.05 billion.
• Gross Profit margin to be in a range of 29.0% to 31.0%.
• Adjusted EBITDA to be in a range of $1.7 billion to $2.1 billion.
• Adjusted EBITDA margin to be in a range of 10.6% to 12.3%.
• Free cash flow in the range of $800 million to $1.2 billion, assuming average commodity prices in the range of $400 to $440 per thousand board foot (mbf).

2025 Full Year Assumptions

The Company’s anticipated 2025 performance is based on several assumptions for the full year, including the following:

• Within the Company’s geographies, Single-Family starts are projected to be down mid-single digits, Multi-Family starts down mid-teens, and R&R is projected to be flat.
• Acquisitions completed within the last twelve months are projected to add net sales growth of 5.0% to 5.5%.
• Total capital expenditures in the range of $350 million to $425 million.
• Interest expense in the range of $260 million to $280 million.
• An effective tax rate of 23.0% to 25.0%.
• Depreciation and amortization expenses in the range of $550 million to $600 million.
• One fewer selling day is projected to decrease net sales by 0.4% in 2025 versus 2024.

For the full first quarter results, click here.

About Builders FirstSource

Headquartered in Irving, Texas, Builders FirstSource is the largest U.S. supplier of building products, prefabricated components, and value-added services to the professional market segment for new residential construction and repair and remodeling. We provide customers an integrated homebuilding solution, offering manufacturing, supply, delivery, and installation of a full range of structural and related building products. We operate in 43 states with approximately 595 locations and have a market presence in 48 of the top 50 and 92 of the top 100 MSAs, providing geographic diversity and balanced end market exposure. We service customers from strategically located distribution and manufacturing facilities (some of which are co-located) that produce value-added products such as roof and floor trusses, wall panels, stairs, vinyl windows, custom millwork, and pre-hung doors. Builders FirstSource also distributes dimensional lumber and lumber sheet goods, millwork, windows, interior and exterior doors, and other specialty building products. www.bldr.com

Contact:

Heather Kos – SVP, Investor Relations – investorrelations@bldr.com

Source: Builders FirstSource, Inc.