Stock Performance - Builders FirstSource (BLDR) closed at $166 76, marking a -0 81% move from the previous day, underperforming the S&P 500's daily loss of 0 29% [1] - Over the last month, BLDR shares increased by 13 46%, outperforming the Retail-Wholesale sector's gain of 3 53% and the S&P 500's gain of 2 52% [1] Earnings and Revenue Projections - The company's upcoming earnings report is set for February 20, 2025, with an EPS projection of $2 19, reflecting a 38 31% drop compared to the same quarter last year [2] - Revenue is projected at $3 92 billion, a 5 54% decline from the equivalent quarter last year [2] Analyst Estimates and Revisions - Recent changes to analyst estimates for BLDR are closely tied to short-term business dynamics, with positive revisions indicating a favorable business outlook [3] - The Zacks Consensus EPS estimate has moved 3 18% lower over the last 30 days [5] Valuation Metrics - BLDR is trading at a Forward P/E ratio of 14 15, slightly below the industry average of 14 42 [6] - The PEG ratio for BLDR is 0 91, significantly lower than the industry average of 2 25, indicating a discount relative to expected earnings growth [6] Industry Ranking - The Building Products - Retail industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 196, placing it in the bottom 22% of over 250 industries [7] - Industries in the top 50% of the Zacks Industry Rank outperform the bottom half by a factor of 2 to 1 [7]

Builders FirstSource, Inc. (BLDR) is set to expand its footprint in its West Division by acquiring Alpine Lumber Company.BLDR stock inched up 0.4% in the after-hours trading session on Monday, post the acquisition announcement.More on BLDR’s New AcquisitionThe Colorado-based company will bring in 21 locations, serving homebuilders and contractors across the Front Range of Colorado, western Colorado and northern New Mexico, to BLDR’s portfolio. Additionally, the acquisition will also enhance the company’s pr ...

Core Viewpoint - Builders FirstSource (NYSE: BLDR) has shown strong performance over the past year with a 45% gain, but shares have declined over 10% from their highs due to persistently high mortgage rates [1] Financial Performance - Builders FirstSource reported mixed Q3 results, indicating challenges in the current market environment [1]

PART I — FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for the three and nine months ended September 30, 2024, reflect a decline in net sales and income, an increase in total assets and liabilities, and a decrease in stockholders' equity due to share repurchases [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations show a decline in net sales, net income, and diluted EPS for both the three and nine months ended September 30, 2024, compared to the prior year **Consolidated Statements of Operations Highlights (in thousands, except per share amounts)** | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $4,232,494 | $4,534,264 | $12,580,186 | $12,946,468 | | **Gross margin** | $1,386,333 | $1,581,102 | $4,148,871 | $4,547,448 | | **Income from operations** | $428,023 | $641,628 | $1,291,103 | $1,685,883 | | **Net income** | $284,783 | $451,457 | $887,654 | $1,189,862 | | **Diluted EPS** | $2.44 | $3.59 | $7.39 | $9.10 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2024, the balance sheet reflects an increase in total assets and liabilities, primarily due to long-term debt, while total stockholders' equity decreased mainly from common stock repurchases **Balance Sheet Summary (in thousands)** | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $3,474,408 | $3,300,728 | | **Total assets** | $10,894,137 | $10,499,452 | | **Total current liabilities** | $1,958,883 | $1,863,437 | | **Total liabilities** | $6,447,464 | $5,767,101 | | **Total stockholders' equity** | $4,446,673 | $4,732,351 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash from operations decreased, while significant cash was used in investing activities for acquisitions and in financing activities for common stock repurchases **Cash Flow Summary for Nine Months Ended September 30 (in thousands)** | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,499,229 | $1,695,173 | | **Net cash used in investing activities** | ($534,884) | ($476,096) | | **Net cash used in financing activities** | ($702,398) | ($1,211,426) | | **Net change in cash and cash equivalents** | $261,947 | $7,651 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes provide detailed disclosures on eleven acquisitions, issuance of new senior notes, significant stock repurchases, and confirmation of no goodwill impairment triggering events - The company operates as a single reportable segment, supplying building materials, manufactured components, and construction services across approximately 580 locations in 43 states[12](index=12&type=chunk)[15](index=15&type=chunk) - Completed eleven acquisitions in the first nine months of 2024 for a combined total of approximately **$265.4 million**, net of cash acquired[22](index=22&type=chunk) - In February 2024, the company issued **$1.0 billion** of 6.375% senior unsecured notes due 2034, using the proceeds to repay outstanding debt under its Revolving Facility and for general corporate purposes[41](index=41&type=chunk) - The company has known and threatened construction defect legal claims, which are generally covered by insurance above a deductible, however, a reasonable estimate of loss cannot be determined at this time[49](index=49&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the decrease in Q3 net sales and gross margin to market conditions, while maintaining a positive long-term housing outlook and continuing its strategy of growth through acquisitions and shareholder returns [Recent Developments](index=19&type=section&id=Recent%20Developments) Recent developments include eleven acquisitions, significant share repurchases, and an executive transition with a new CEO and CFO appointed - Completed eleven acquisitions through September 30, 2024, for an aggregate purchase price of approximately **$265.4 million**, net of cash acquired[57](index=57&type=chunk) - Repurchased **6.8 million shares** for a total cost of **$1.2 billion** during the nine months ended September 30, 2024, at a weighted average price of **$171.37 per share**[58](index=58&type=chunk) - Announced that Peter Jackson, EVP and CFO, will succeed Dave Rush as President & CEO, effective November 6, 2024[60](index=60&type=chunk) [Current Operating Conditions and Outlook](index=20&type=section&id=Current%20Operating%20Conditions%20and%20Outlook) Despite a slight decrease in Q3 single-family housing starts, management maintains a positive long-term outlook for the underbuilt housing market and focuses on strategic growth through acquisitions - U.S. single-family housing starts decreased **0.5%** in Q3 2024 vs Q3 2023, but increased **10.1%** for the first nine months of 2024 compared to the same period in 2023[61](index=61&type=chunk) - Management believes the long-term housing industry outlook is positive, as the market remains underbuilt relative to demographic growth[62](index=62&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Net sales for Q3 and the nine-month period decreased due to lower organic sales and commodity deflation, leading to a decline in gross margin percentage attributed to margin normalization **Q3 2024 vs. Q3 2023 Net Sales by Product Category (in millions)** | Product Category | Q3 2024 Net Sales | Q3 2023 Net Sales | % Change | | :--- | :--- | :--- | :--- | | Lumber & lumber sheet goods | $1,069.1 | $1,157.2 | (7.6)% | | Manufactured products | $997.6 | $1,200.4 | (16.9)% | | Windows, doors & millwork | $1,084.8 | $1,093.3 | (0.8)% | | Specialty building products & services | $1,081.0 | $1,083.4 | (0.2)% | | **Total Net sales** | **$4,232.5** | **$4,534.3** | **(6.7)%** | **Nine Months 2024 vs. 2023 Net Sales by Product Category (in millions)** | Product Category | Nine Months 2024 Net Sales | Nine Months 2023 Net Sales | % 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)%** | - Q3 2024 gross margin percentage decreased to **32.8%** from **34.9%** in Q3 2023, driven by ongoing multi-family and core organic margin normalization[69](index=69&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2024, the company maintained strong liquidity, with cash from operations decreasing year-over-year, primarily used for significant share repurchases and acquisitions - Total liquidity was **$2.1 billion** at September 30, 2024, consisting of cash on hand and availability under the Revolving Facility[83](index=83&type=chunk) **Borrowing Availability (in millions)** | Metric | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Maximum borrowing amount | $1,800.0 | $1,800.0 | | Outstanding borrowings | $0.0 | ($464.0) | | Letters of credit | ($65.4) | ($70.3) | | **Net excess borrowing availability** | **$1,734.6** | **$1,265.7** | - Cash from operations decreased to **$1.5 billion** for the nine months ended Sep 30, 2024, from **$1.7 billion** in the prior year, largely due to lower net income and timing of accounts payable[86](index=86&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate changes, particularly on variable-rate borrowings, and commodity price volatility, which can impact operating results if price increases are not passed on to customers - The company's **$4.55 billion** in senior notes bear fixed interest rates, mitigating risk from rising market rates, however, the Revolving Facility has variable interest rates[40](index=40&type=chunk)[92](index=92&type=chunk) - The company faces risk from short-term changes in material costs, particularly lumber, delays in passing on price increases to customers can negatively impact operating results[93](index=93&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting identified during the quarter - The CEO and CFO concluded that as of September 30, 2024, the company's disclosure controls and procedures were effective at a reasonable assurance level[99](index=99&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[100](index=100&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims, including construction defect claims, which are generally insured, and management believes their outcome will not materially affect the company's financial position - The company faces construction defect legal claims, but a reasonable estimate of loss cannot be made at this time due to the early stage of proceedings and complexity of claims[102](index=102&type=chunk) - Management believes the ultimate disposition of current legal proceedings will not materially affect the company's financial position, cash flows, or results of operations[104](index=104&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K - There were no material changes to the risk factors reported in the company's 2023 Form 10-K[106](index=106&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2024, the company repurchased shares under a new program, with a significant amount remaining available for future repurchases **Q3 2024 Share Repurchase Activity** | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2024 | 1,456 | $158.88 | | August 2024 | 450,922 | $168.10 | | September 2024 | 453,505 | $185.33 | | **Total Q3** | **905,883** | **$176.71** | - On August 5, 2024, the board authorized a new **$1.0 billion** share repurchase plan, as of September 30, 2024, **$841.8 million** remained available under this authorization[107](index=107&type=chunk) [Other Information](index=26&type=section&id=Item%205.%20Other%20Information) No other information is reported for this item - None[109](index=109&type=chunk) [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial statements in Inline XBRL format - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906[110](index=110&type=chunk) - Financial statements and notes are provided in Inline eXtensible Business Reporting Language (Inline XBRL) format[110](index=110&type=chunk)

Q3 2024 Performance - Net sales decreased by 6.7% year-over-year to $4.2 billion[10] - Gross profit decreased by 12.3% year-over-year to $1.4 billion, with a gross margin of 32.8%[10] - Adjusted EBITDA decreased by 23.0% year-over-year to $627 million[10] - Adjusted diluted EPS decreased by 27.6% year-over-year to $3.07[10] Sales and Product Mix - Single-family core organic net sales decreased by 4.6%[12] - Multi-family sales decreased by 30.9%, while Repair & Remodel/Other increased by 0.8%[12] - Value-added product mix was 49% for Q3 2024[12] - Value-Added Core Organic Sales decreased 10% against the prior year[32] Capital Deployment and Share Repurchases - Total capital deployed in Q3 2024 was approximately $0.4 billion[10] - The company repurchased 6.8 million shares YTD at an average price of $171.37 per share for approximately $1.2 billion[12] - Since August 2021, the company has repurchased over 45% of total shares outstanding for a total cost of approximately $7.3 billion[12] 2024 Outlook - Total net sales are projected to be $16.25 to $16.55 billion[38] - Gross profit margin is expected to be 32.0% to 33.0%[38] - Total adjusted EBITDA is projected to be $2.25 to $2.35 billion[38] - Free cash flow is expected to be $1.2 to $1.4 billion[38]

Financial Data and Key Metrics Changes - Net sales for Q3 2024 were $4.2 billion, a decrease of 6.7%, driven by a 7.2% decline in core organic sales and 2.9% commodity deflation [37] - Adjusted EBITDA was approximately $627 million, down 23%, with an adjusted EBITDA margin of 14.8%, down 310 basis points from the prior year [43] - Adjusted net income was $360 million, down $174 million from the prior year, with adjusted earnings per diluted share at $3.07, a decrease of 28% compared to the prior year [44] Business Line Data and Key Metrics Changes - Install services sales increased by 11% year-over-year, focusing on helping customers address labor challenges [20] - Value-added products represented 49% of net sales during Q3, with multifamily sales comprising roughly 70% of value-added products [40] - SG&A expenses increased by $19 million to $958 million, primarily due to acquired operations and asset write-offs [41] Market Data and Key Metrics Changes - Single-family housing starts continued to show softness amid affordability challenges, with a 4.6% decline in single-family sales [21] - Multifamily sales experienced a 31% decline year-over-year, with expectations of continued headwinds [38] - The company anticipates a regional financial impact from Hurricane Helene and Milton, around $40 million in sales [48] Company Strategy and Development Direction - The company aims to enhance its talent investment and development, improve growth prospects, and foster collaboration across regions [15][16] - The focus remains on maintaining strong gross margins and operational flexibility while navigating market challenges [18][20] - The company continues to pursue M&A opportunities, completing six deals in Q3 with an aggregate 2023 sales of roughly $190 million [26] Management's Comments on Operating Environment and Future Outlook - Management noted mixed reactions to the Fed's interest rate cuts, with some homebuyers remaining cautious [21] - The company expects to see a differentiated reaction to future rate cuts, with potential for recovery in certain markets [58] - Management expressed confidence in the long-term strength of the housing market due to significant underbuilding and favorable demographic trends [54] Other Important Information - The company executed share repurchases of roughly $160 million during Q3, continuing to allocate capital to high-return opportunities [29] - The 2024 outlook includes expected total company net sales of $16.25 billion to $16.55 billion and adjusted EBITDA of $2.25 billion to $2.35 billion [48][49] Q&A Session Summary Question: Growth versus market in 2025 scenarios - Management acknowledged market choppiness and mixed reactions to interest rate cuts, indicating a cautious outlook for growth relative to the market [58] Question: Confirmation of gross margin guide - Management confirmed an expected exit rate of approximately 31.5% for gross margins in 2024, with competitive dynamics impacting margins [59][60] Question: 2025 scenario assumptions - Management indicated that the 2025 scenarios are based on economist forecasts and include assumptions for commodity prices and productivity improvements [72] Question: Impact of multifamily on manufactured products - Management noted a significant decline in multifamily manufactured products, with expectations for continued normalization [79] Question: Trends in single-family housing sizes - Management confirmed expectations for flattening trends in single-family housing sizes, with no significant deterioration anticipated [76]

Builders FirstSource (BLDR) reported lackluster results for the third quarter of 2024, with earnings and net sales missing the Zacks Consensus Estimate.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Also, both the metrics declined year over year owing to lower core organic sales and commodity deflation, partially offset by growth from acquisitions and one additional selling day. Margins also declined due to ongoing Multi-Family and core organic normalization.Owing to the expected i ...

Company Performance - Builders FirstSource (BLDR) reported quarterly earnings of $3.07 per share, missing the Zacks Consensus Estimate of $3.09 per share, and down from $4.24 per share a year ago, representing an earnings surprise of -0.65% [1] - The company posted revenues of $4.23 billion for the quarter ended September 2024, missing the Zacks Consensus Estimate by 5.22%, compared to year-ago revenues of $4.53 billion [2] - Over the last four quarters, Builders FirstSource has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Market Comparison - Builders FirstSource shares have added about 3.3% since the beginning of the year, while the S&P 500 has gained 19.8% [3] - The stock is currently ranked 3 (Hold) by Zacks, indicating it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $2.35 on revenues of $4.01 billion, and for the current fiscal year, it is $11.69 on revenues of $16.82 billion [7] - The outlook for the Building Products - Retail industry is currently in the bottom 38% of over 250 Zacks industries, which may impact the stock's performance [8]

For Immediate Release Builders FirstSource Reports Third Quarter 2024 Results November 5, 2024 (Irving, TX) – Builders FirstSource, Inc. (NYSE: BLDR) today reported its results for the third quarter ended September 30, 2024. Third Quarter 2024 Highlights All Year-Over-Year Comparisons Unless Otherwise Noted: • Net sales were $4.2 billion, a 6.7% decrease, driven by lower core organic sales and commodity deflation, partially offset by growth from acquisitions and one additional selling day. • Gross profit ma ...

Wall Street expects a year-over-year decline in earnings on lower revenues when Builders FirstSource (BLDR) reports results for the quarter ended September 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on N ...