Builders FirstSource(BLDR) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 were $3.7 billion, a 6.0% decrease from $3.9 billion in Q1 2024, with core organic sales down 8.1% due to declines in multi-family and single-family segments [75]. - Gross margin decreased to 30.5% in Q1 2025 from 33.4% in Q1 2024, primarily driven by margin normalization in single-family and multi-family segments [78]. - The company reported a net income of 2.7% in Q1 2025, down from 6.7% in Q1 2024 [73]. - Cash provided by operating activities decreased to $132.3 million for Q1 2025, down from $317.2 million in Q1 2024, primarily due to lower net income [88]. Expenses and Costs - Selling, general and administrative expenses increased to 25.4% of net sales in Q1 2025, up from 23.8% in Q1 2024, due to reduced operating leverage [80]. - Interest expense rose to $64.9 million in Q1 2025, an increase of $16.6 million from Q1 2024, attributed to higher average debt balances [80]. - A 1.0% increase in interest rates on the Revolving Facility would result in approximately $7.8 million additional interest expense annually based on $775.0 million in outstanding borrowings as of March 31, 2025 [95]. Acquisitions and Investments - The company completed acquisitions of Alpine Lumber and Cluss Lumber for approximately $828.0 million, expanding its market footprint and value-added product categories [67]. - Cash used in investing activities increased by $761.0 million in Q1 2025, mainly due to an additional $766.1 million spent on acquisitions [89]. Liquidity and Borrowing - As of March 31, 2025, the company had $944.3 million in net excess borrowing availability under its Revolving Facility [84]. - The company’s liquidity at March 31, 2025, was $1.1 billion, consisting of net borrowing availability and cash on hand [85]. - Cash provided by financing activities was $741.5 million in Q1 2025, compared to $465.2 million in Q1 2024, driven by $775.0 million net borrowings on the Revolving Facility [90]. Market Conditions - Actual U.S. total housing starts were 0.3 million in Q1 2025, a decrease of 1.6% compared to Q1 2024, with single-family starts down 5.7% [70]. - The company anticipates a long-term positive outlook for the housing industry despite near-term pressures from macroeconomic uncertainties [71]. - The company may face adverse impacts on operating results due to delays in passing on material price increases to customers, particularly for lumber products [96].