Builders FirstSource Q4 Earnings Beat Estimates, Net Sales Miss

Core Insights - Builders FirstSource, Inc. (BLDR) reported mixed results for Q4 2024, with earnings exceeding estimates but net sales falling short [1][4] - The company faced year-over-year declines in both earnings and net sales due to lower core organic sales and commodity deflation, although acquisitions and an additional selling day provided some offset [2][5] Earnings & Revenue Discussion - Adjusted EPS was $2.31, surpassing the consensus estimate of $2.24 by 3.1%, but down 34.9% from the previous year [4] - Net sales totaled $3.82 billion, missing the consensus of $3.91 billion by 2.4% and declining 8% year-over-year [5] - Core organic sales decreased by 8.8%, with commodity price deflation accounting for 3.1% of net sales [5] Product Category Sales - Value-added product sales, which made up 49.7% of quarterly net sales, were $1.9 billion, down 12% year-over-year [7] - Specialized product sales increased by 1.3% to $966.2 million, while lumber and lumber sheet goods sales decreased by 8.1% to $956.7 million [8] Operating Highlights - Gross margin contracted by 300 basis points to 32.3%, influenced by margin normalization in Single-Family and Multi-Family segments [9] - Adjusted EBITDA fell 28% year-over-year to $493.6 million, with the adjusted EBITDA margin contracting to 12.9% [9] 2024 Financial Overview - For 2024, net sales were $16.4 billion, down 4.1% from 2023, with adjusted EPS decreasing by 20.8% to $11.56 [11][12] - The company achieved approximately $117 million in productivity savings related to operational excellence and supply-chain initiatives [12] Financial Position - As of December 31, 2024, cash and cash equivalents were $153.6 million, with total liquidity of $1.8 billion [13] - Long-term debt increased to $3.7 billion, and the net debt to adjusted EBITDA ratio rose to 1.5x [14] 2025 Guidance - For 2025, BLDR expects net sales between $16.5 billion and $17.5 billion, with acquisitions contributing 4-4.5% to net sales growth [16] - Gross margin is projected to be in the range of 30-32%, with adjusted EBITDA expected between $1.9 billion and $2.3 billion [18]