Builders FirstSource(US:BLDR)2025-10-30 16:08Financial Performance - Net sales for Q3 2025 were $3.9 billion, a 6.9% decrease from $4.2 billion in Q3 2024, with core organic sales down 10.6% and commodity price deflation contributing an additional 1.1% decrease [98]. - Net sales for the nine months ended September 30, 2025, were $11.8 billion, a 5.9% decrease from $12.6 billion for the same period in 2024 [105]. - Gross margin decreased to $1.2 billion, with a gross margin percentage of 30.4% in Q3 2025, down from 32.8% in Q3 2024, reflecting a 2.4% decline [101]. - Gross margin decreased by $0.5 billion to $3.6 billion, with a gross margin percentage of 30.5%, down from 33.0% in the prior year, representing a 2.5% decrease [110]. - Selling, general and administrative expenses increased by $12.4 million, or 1.3%, resulting in a percentage of net sales rising to 24.6% from 22.6% year-over-year [102]. - Selling, general and administrative expenses increased by $31.5 million, or 1.1%, leading to an increase as a percentage of net sales to 24.4% from 22.7% [111]. - Interest expense for Q3 2025 was $69.3 million, an increase of $15.0 million from Q3 2024, primarily due to higher average debt balances [103]. - Interest expense was $206.1 million for the nine months ended September 30, 2025, an increase of $51.5 million from the previous year [112]. - Income tax expense decreased to $114.6 million for the nine months ended September 30, 2025, from $248.8 million in 2024, with an effective tax rate of 22.1% [113]. - Cash provided by operating activities was $1.0 billion for the nine months ended September 30, 2025, down from $1.5 billion in the same period of 2024 [122]. - Cash used in investing activities increased by $0.6 billion, primarily due to additional cash used for acquisitions [123]. Acquisitions and Investments - The company completed acquisitions for an aggregate purchase price of approximately $910.8 million, enhancing market footprint and operations in value-added product categories [85]. - The company amended its Revolving Facility to increase commitments from $1.8 billion to $2.2 billion, extending the maturity date to May 20, 2030 [89]. - As of September 30, 2025, the company had no outstanding borrowings under its Revolving Facility, with net excess borrowing availability of $1.8 billion [118]. - Liquidity at September 30, 2025, was $2.1 billion, consisting of net borrowing availability and cash on hand [119]. Market Conditions - U.S. total housing starts were 1.3 million as of August 2025, a decrease of 6.0% compared to the same period in 2024, with single-family housing starts down 11.7% [92]. - The company experienced decreased net sales in manufactured products due to lower single-family housing starts, partially offset by acquisitions [109]. - The company anticipates a long-term positive outlook for the housing industry despite near-term pressures from macroeconomic uncertainties [93]. Operational Overview - The company operates approximately 585 locations across 43 states in the U.S., providing a wide range of building materials and services [83]. - The company repurchased 3.4 million shares at a weighted average price of $118.65 per share, totaling $403.6 million during the nine months ended September 30, 2025 [87].