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Builders FirstSource Reports Fourth Quarter and Fiscal Year 2012 Results

Builders FirstSource Reports Fourth Quarter and Fiscal Year 2012 Results

49% Sales Growth Drove Adjusted EBITDA to $3.4 Million for Fourth Quarter

DALLAS, Feb. 21, 2013 (GLOBE NEWSWIRE) -- Builders FirstSource, Inc.
(Nasdaq:BLDR), a leading supplier and manufacturer of structural and related
building products for residential new construction in the United States, today
reported its results for the fourth quarter and fiscal year ended December 31,
2012.

Highlights include the following (see financial schedules for more
information, including non-GAAP reconciliations):

  *Fourth quarter 2012 sales increased 49.3 percent to $287.6 million.
  *Adjusted EBITDA was $3.4 million for the fourth quarter and $6.4 million
    for fiscal year 2012. This compares to Adjusted EBITDA of ($3.3) million
    for the fourth quarter and ($15.0) million for fiscal year 2011.
  *The company amended its term loan, allowing it to enhance liquidity by $93
    million.

Commenting on the company's financial results, Floyd Sherman, Builders
FirstSource Chief Executive Officer said, "We are very pleased with our fiscal
2012 financial results, as we ended the year with close to $1.1 billion in
sales, up 37.4 percent over fiscal 2011, and reported full year Adjusted
EBITDA of $6.4 million, a $21.5 million improvement over last year. For the
fourth quarter of 2012, our sales were $287.6 million, an increase of 49.3
percent when compared to the fourth quarter of 2011, which helped generate our
first quarter of positive operating income since 2007. As a comparison, actual
single-family housing starts in the South Region increased 25.6 percent during
the quarter, while single-family units under construction increased 20.2
percent over this same time period. Since 2007, our company, through hard work
and sacrifice, and with the unwavering support of our shareholders, has
weathered the worst housing recession in our nation's history. To say I am
proud of what our employees have accomplished in recent years would be an
extreme understatement."

Mr. Sherman continued, "The housing industry continues to strengthen. Our
sales per day in the fourth quarter exceeded that of the third quarter, which
is highly unusual given the seasonality of our business. From a U.S.
single-family housing starts perspective, 2012 ended with 534,600 actual
starts, up 24.2% over 2011, although that is still well below the historical
average of 1.1 million starts per year. On a sequential quarter basis we were
able to improve our gross margin by 40 basis points in spite of commodity
inflation of over 20% during the current quarter."

Chad Crow, Builders FirstSource Senior Vice President and Chief Financial
Officer, added, "Our quarter-over-quarter top line growth of over 49 percent
was driven by an estimated 38 percent increase in volume and an 11 percent
increase in price. Fourth quarter Adjusted EBITDA of $3.4 million was our
strongest quarter of the year, and the momentum gained in 2012 appears to have
carried into 2013."

Mr. Crow continued, "From a liquidity standpoint, we ended the year with
unrestricted cash of $131.4 million and net liquidity of $116.4 million, after
giving effect to the $15.0 million minimum cash requirement contained in our
amended term loan agreement. In conjunction with revisions to our letter of
credit "LC" facilities made subsequent to year end, we freed up an additional
$13.0 million of liquidity by eliminating the cash collateral requirement on
LC's. We did not experience the seasonal reduction in working capital we had
anticipated given the robust sales performance we saw during the last three
months of 2012.This strong sales performance, combined with commodity price
inflation, resulted in our working capital actually increasing during the
quarter by approximately $12 million.Components of working capital continued
to be strong as our accounts receivable days remained relatively flat for the
quarter at 36.0 days, inventory turns improved to 9.2x compared to 8.7x for
the fourth quarter of 2011, and our accounts payable days were 30 days."

Fourth Quarter 2012 Results Compared to Fourth Quarter 2011

(See accompanying financial schedules for full financial details and
reconciliations of Non-GAAP financial measures to their GAAP equivalents.)

  *Sales were $287.6 million compared to $192.7 million last year, an
    improvement of $94.9 million or 49.3 percent. We estimate sales increased
    approximately 38 percent due to increased volume and 11 percent due to
    price.
    
  *Gross margin percentage was 20.2 percent, down from 20.4 percent, a 0.2
    percentage point decrease.Our gross margin decreased 1.2 percentage
    points largely due to commodity lumber inflation during the quarter which
    was offset by a 1.0 percentage point gross margin improvement due to
    increased sales volume.On a sequential quarter basis gross margin
    percentage improved from 19.8 percent to 20.2 percent.
    
  *SG&A expenses increased $10.7 million, or 22.8 percent, in the current
    quarter.We recorded proceeds of $0.6 million from a litigation settlement
    as a reduction to SG&A expenses during the quarter.As a percentage of
    sales, SG&A expense decreased from 24.4 percent in the fourth quarter of
    2011 to 20.1 percent in the current quarter.Our salaries and benefits
    expense, excluding stock compensation expense, was $36.8 million, or 12.8
    percent of sales, in the current quarter compared to $27.1 million, or
    14.1 percent of sales, in the fourth quarter of 2011.Delivery expense
    increased $1.3 million, or 13.8 percent, as a result of increased sales
    volume.
    
  *Interest expense was $11.0 million in the current quarter, an increase of
    $2.9 million from the fourth quarter of 2011, primarily due to the
    issuance of our term loan in December 2011.
    
  *We recorded $0.2 million of income tax expense in the fourth quarter of
    2012, compared to $0.3 million in the fourth quarter of 2011.We recorded
    an after-tax, non-cash valuation allowance of $3.6 million and $6.5
    million in the fourth quarters of 2012 and 2011, respectively, related to
    our net deferred tax assets.Absent the valuation allowance, the effective
    tax rate would have been 31.3 percent and 38.0 percent in the fourth
    quarters of 2012 and 2011, respectively.As of the end of the current
    quarter, the company's gross federal income tax net operating loss
    available for carry-forward was approximately $237 million.
    
  *Loss from continuing operations was $11.0 million, or $0.12 loss per
    diluted share, compared to $16.6 million, or $0.18 loss per diluted share,
    in the same quarter last year.Excluding facility closure costs, the
    litigation settlement, the fair value adjustment for stock warrants and
    the tax valuation allowance, our loss from continuing operations was $0.08
    per diluted share for the current quarter.For the fourth quarter of 2011,
    loss from continuing operations per diluted share was $0.09, when
    excluding facility closure costs, debt issuance cost write-offs, the fair
    value adjustment for stock warrants and the tax valuation allowance.See
    reconciliation attached.
    
  *Loss from discontinued operations was $1.0 million, or $0.01 loss per
    diluted share, compared to a loss of $0.1 million, or $0.00 per diluted
    share, for the fourth quarter of 2011.Loss from discontinued operations
    in the current quarter was primarily related to an adjustment to record
    held for sale real estate at its fair market value.
    
  *Net loss for the fourth quarter of 2012 was $12.0 million, or $0.13 loss
    per diluted share, compared to $16.7 million, or $0.18 loss per diluted
    share, in the fourth quarter of 2011.
    
  *Diluted weighted average shares outstanding were 95.6 million in the
    fourth quarter of 2012 compared to 95.0 million in the same quarter of
    2011.
    
  *Adjusted EBITDA was $3.4 million in the current quarter, compared to an
    Adjusted EBITDA loss of $3.3 million in the same quarter last year. See
    reconciliation attached.

Liquidity and Capital Resources

  *On December 17, 2012, we amended our $160.0 million first-lien term loan
    agreement to enhance our liquidity position to support both current and
    anticipated increases in sales volume.Terms of the amendment included
    increasing the principal amount by $65.0 million, reducing the minimum
    cash requirement from $35.0 million to $15.0 million, adding a new $15.0
    million LC facility, and increasing the minimum specified collateral value
    to $225.0 million, contingent upon maintaining certain levels of qualified
    cash.These amendments to our term loan increased our liquidity by
    approximately $80 million.
    
  *Liquidity at December 31, 2012 was $116.4 million, which included $131.4
    million in cash, reduced by the $15.0 million minimum cash requirement in
    our amended term loan.
    
  *In addition to the $131.4 million of cash, the company had $14.0 million
    in restricted cash at December 31, 2012, of which $1.9 million was
    included in long-term assets.Restricted cash consists of approximately
    $13 million used to collateralize outstanding LC's and $0.9 million used
    as collateral for other casualty insurance obligations.
    
  *In conjunction with the term loan amendment, subsequent to year-end we
    were able to eliminate the cash collateral requirement for our outstanding
    LC's, thus increasing our liquidity by an additional $13.0 million.We
    also amended our existing stand-alone $20.0 million LC facility down to
    $10.0 million.Had these terms been in place at December 31, 2012, our
    unrestricted cash would have been $144.4 million and our net liquidity
    would have been $129.4 million.
    
  *Capital expenditures were $1.2 million for the current quarter, compared
    to $2.1 million for the fourth quarter of 2011.

Outlook

Mr. Sherman concluded, "We believe the housing industry will continue to
recover in 2013 and that Builders FirstSource is well positioned to take
advantage of this recovery.The recent amendment to our term loan gives us
substantial additional liquidity to continue growing our business at an
accelerated rate.We look forward to building on what was a very successful
2012."

Conference Call

Builders FirstSource will host a conference call Friday, February 22, 2013 at
10:00 a.m. Central Time (CT) and will simultaneously broadcast it live over
the Internet.To participate in the teleconference, please dial into the call
a few minutes before the start time: 888-481-2862 (U.S. and Canada) and
719-325-2338 (international).A replay of the call will be available at 3:00
p.m. CT through February 27^th.To access the replay, please dial 888-203-1112
(U.S. and Canada) and 719-457-0820 (international) and refer to pass code
9404867. The live webcast and archived replay can also be accessed on the
company's website at www.bldr.com under the "Investors" section.The online
archive of the webcast will be available for approximately 90 days.

About Builders FirstSource

Headquartered in Dallas, Texas, Builders FirstSource is a leading supplier and
manufacturer of structural and related building products for residential new
construction.The company operates 53 distribution centers and 44
manufacturing facilities in 9 states, principally in the southern and eastern
United States.Manufacturing facilities include plants that manufacture roof
and floor trusses, wall panels, stairs, aluminum and vinyl windows, custom
millwork and pre-hung doors.Builders FirstSource also distributes windows,
interior and exterior doors, dimensional lumber and lumber sheet goods,
millwork and other building products.For more information about Builders
FirstSource, visit the company's website at www.bldr.com.

Cautionary Notice

Statements in this news release and the schedules hereto that are not purely
historical facts or that necessarily depend upon future events, including
statements about expected market share gains, plans to reduce costs,
forecasted financial performance or other statements about anticipations,
beliefs, expectations, hopes, intentions or strategies for the future, may be
forward-looking statements within the meaning of Section21E of the Securities
Exchange Act of 1934, as amended.Readers are cautioned not to place undue
reliance on forward-looking statements.All forward-looking statements are
based upon information available to Builders FirstSource, Inc. on the date
this release was submitted.Builders FirstSource, Inc. undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. Any
forward-looking statements involve risks and uncertainties that could cause
actual events or results to differ materially from the events or results
described in the forward-looking statements, including risks or uncertainties
related to the Company's growth strategies, including gaining market share, or
the Company's revenues and operating results being highly dependent on, among
other things, the homebuilding industry, lumber prices and the economy.
Builders FirstSource, Inc. may not succeed in addressing these and other
risks.Further information regarding factors that could affect our financial
and other results can be found in the risk factors sectionof Builders
FirstSource, Inc.'s most recent annual report on Form10-K filed with the
Securities and Exchange Commission. Consequently, all forward-looking
statements in this release are qualified by the factors, risks and
uncertainties contained therein.

                        Financial Schedules to Follow

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
                                                               
                                                               
                             Three months ended    Fiscal year ended
                             December 31,            December 31,
                             2012      2011      2012       2011
                             (in thousands, except per share amounts)
                                                               
                                                               
Sales                        $287,588  $192,677  $1,070,676 $779,093
Cost of sales                229,518    153,407    856,110     621,148
Gross margin                 58,070     39,270     214,566     157,945
                                                               
Selling, general and
administrative expenses
(includes
stock-basedcompensation
expense of $956 and $914 for  57,820     47,093     222,263     192,959
the three months ended in
2012 and 2011, respectively,
and $3,628 and $4,559 for the
fiscal year ended in 2012 and
2011, respectively.)
Asset impairments            48         --         48          --
Facility closure costs       62         442        958         2,461
Income (loss) from            140        (8,265)    (8,703)     (37,475)
operations
Interest expense, net        10,955     8,080      45,139      24,939
Loss from continuing
operations before income      (10,815)   (16,345)   (53,842)    (62,414)
taxes
Income tax expense           226        300        577         2,217
Loss from continuing          (11,041)   (16,645)   (54,419)    (64,631)
operations
Loss from discontinued
operations (net of income tax (1,007)    (53)       (2,437)     (364)
expense of $0in 2012 and
2011, respectively)
Net loss                     $(12,048) $(16,698) $(56,856)  $(64,995)
                                                               
Basic and diluted net loss per share:                           
Loss from continuing          $(0.12)   $(0.18)   $(0.57)    $(0.68)
operations
Loss from discontinued        (0.01)     (0.00)     (0.03)      (0.00)
operations
Net loss                     $(0.13)   $(0.18)   $(0.60)    $(0.68)
                                                               
Weighted average common shares:                                 
Basic and diluted            95,645     95,011     95,463      94,950


BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Sales by Product Category
(unaudited)
                                                               
                                                               
                                   Three months ended December 31,
                                   2012              2011
                                   (in thousands)
                                                               
Prefabricated components           $52,869    18.4%  $35,560  18.4%
Windows & doors                    62,270      21.7%  47,171    24.5%
Lumber & lumber sheet goods        96,455      33.5%  54,253    28.2%
Millwork                           28,320      9.8%   20,160    10.5%
Other building products & services 47,674      16.6%  35,533    18.4%
Total sales                        $287,588   100.0% $192,677 100.0%
                                                               
                                                               
                                   Fiscal year ended December 31,
                                   2012              2011
                                   (in thousands)
                                                               
Prefabricated components           $203,687   19.0%  $147,608 18.9%
Windows & doors                    233,111     21.8%  183,313   23.5%
Lumber & lumber sheet goods        348,132     32.5%  225,002   28.9%
Millwork                           104,165     9.7%   81,577    10.5%
Other building products & services 181,581     17.0%  141,593   18.2%
Total sales                        $1,070,676 100.0% $779,093 100.0%


BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
                                                             
                                                             
                                             December 31,   December 31,
                                             2012           2011
                                             (in thousands, except per share
                                              amounts)
                                                             
ASSETS                                                       
Current assets:                                              
Cash and cash equivalents                    $131,432       $146,833
Restricted cash                              12,068          13,229
Accounts receivable, less allowance of $2,831
and $2,138 atDecember 31, 2012 and 2011,     117,405         76,429
respectively
Inventories                                  108,999         77,085
Other current assets                         9,968           8,361
Total current assets                         379,872         321,937
Property, plant and equipment, net           44,084          48,224
Goodwill                                     111,193         111,193
Other assets, net                            15,692          12,440
Total assets                                 $550,841       $493,794
                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY                          
Current liabilities:                                         
Accounts payable                             $79,397        $48,618
Accrued liabilities                          37,778          27,459
Current maturities of long-term debt         60              54
Total current liabilities                    117,235         76,131
Long-term debt, net of current maturities    360,895         297,455
Other long-term liabilities                  24,615          18,984
Total liabilities                            502,745         392,570
Commitments and contingencies                                
Stockholders' equity:                                        
Preferred stock, $0.01 par value, 10,000
shares authorized; zero sharesissued and     --              --
outstanding
Common stock, $0.01 par value, 200,000 shares
authorized; 96,916and 96,806 shares issued   957             950
and outstanding at December 31, 2012
and2011, respectively
Additional paid-in capital                   363,471         359,750
Accumulated deficit                          (316,332)       (259,476)
Total stockholders' equity                   48,096          101,224
Total liabilities and stockholders' equity   $550,841       $493,794


BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
                                                             
                                                             
                                             Fiscal year ended December 31,
                                             2012           2011
                                             (in thousands)
Cash flows from operating activities:                         
Net loss                                      $(56,856)      $(64,995)
Adjustments to reconcile net loss to net cash                 
used in operating activities:
Depreciation and amortization                 11,120          14,041
Asset impairments                             48              --
Amortization of deferred loan costs           744             1,344
Amortization of debt discount                 1,425           106
Fair value adjustment of stock warrants       4,992           736
Deferred income taxes                         458             1,817
Bad debt expense                              751             437
Net non-cash expense from discontinued        1,064           --
operations
Stock compensation expense                    3,628           4,559
Net gain on sale of assets                    (38)            (212)
Changes in assets and liabilities:                            
Receivables                                   (41,727)        (17,175)
Inventories                                   (31,914)        (13,275)
Other current assets                          (710)           1,792
Other assets and liabilities                  (195)           384
Accounts payable                              30,779          3,752
Accrued liabilities                           9,581           281
Net cash used in operating activities         (66,850)        (66,408)
                                                             
Cash flows from investing activities:                         
Purchases of property, plant and equipment    (10,398)        (4,792)
Proceeds from sale of property, plant and     230             349
equipment
Decrease (Increase) in restricted cash        1,135           (14,165)
Net cash used in investing activities         (9,033)         (18,608)
                                                             
Cash flows from financing activities:                         
Payments under revolving credit facility      --              (20,000)
Proceeds from issuance of long term debt      62,075          155,200
Payments of long-term debt and other loans    (54)            (5,298)
Deferred loan costs                           (1,639)         (1,285)
Exercise of stock options                     596             --
Repurchase of common stock                    (496)           (2)
Net cash provided by financing activities     60,482          128,615
                                                             
Net change in cash and cash equivalents       (15,401)        43,599
Cash and cash equivalents at beginning of     146,833         103,234
period
Cash and cash equivalents at end of period    $131,432       $146,833


BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Supplemental Interest Expense Information
(unaudited - dollars in thousands)
                                                                 
                                                                 
                                                                 
                                     Three months ended Fiscal year ended
                                     December 31,         December 31,
                                     2012     2011    2012    2011
                                                                 
                                                                 
Detail of Interest Expense:                                      
Term loan                            $5,014   $1,533  $19,018 $1,533
Floating rate notes                  4,541     4,553    18,164   18,355
Credit facility                      11        217      38       1,149
Change in fair value of stock         576       736      4,992    736
warrants *
Amortization of debt discount *      402       106      1,425    106
Amortization of deferred loan costs   229       715      744      1,344
*
Other                                182       220      758      1,716
Interest expense, net                $10,955  $8,080  $45,139 $24,939
                                                                 
                                                                 
* Non-cash item                                                  


BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to their GAAP Equivalents
(unaudited - dollars in thousands)
                                                              
                                                              
Note: The company provided detailed explanations of these non-GAAP financial
measures in its Form 8-K filed with the Securities and Exchange Commission on
February 21, 2013.
                                                              
                      Three months ended          Fiscal year ended
                      December 31,                  December 31,
                      2012         2011         2012       2011
                                                              
Reconciliation to Adjusted EBITDA:                              
Net loss              $(12,048)    $(16,698)    $(56,856)  $(64,995)
Reconciling items:                                            
Depreciation and       2,867         3,472         11,120      14,041
amortization expense
Interest expense, net 10,955        8,080         45,139      24,939
Income tax expense    226           300           577         2,217
Loss from discontinued
operations, net of     1,007         53            2,437       364
tax
Facility closure       62            442           958         2,461
costs
Litigation settlement  (637)         --            (637)       --
proceeds
Stock compensation     956           914           3,628       4,559
expense
Other                 40            135           45          1,373
Adjusted EBITDA       $3,428       $(3,302)     $6,411     $(15,041)
                                                              
Adjusted EBITDA as     1.2%           -1.7%          0.6%         -1.9%
percentage of sales
                                                              
                      Three months ended
                      December 31,
                      2012                          2011
                      Pre-Tax      Net of Tax   Pre-Tax    Net of Tax
                                                              
Reconciliation to Adjusted loss from continuing operations:      
Loss from continuing operations      $(11,041)                $(16,645)
Reconciling items:                                            
Facility closure       62             38            442          270
costs
Litigation settlement  (637)          (389)                     --
proceeds
Debt issuance cost write-offs        --            517          336
Warrant fair value adjustment        576                       736
Tax valuation allowance              3,611                     6,507
Adjusted loss from continuing         $(7,205)                 $(8,796)
operations
                                                              
Weighted average diluted shares       95,645                    95,011
outstanding
                                                              
Adjusted loss from continuing         $(0.08)                  $(0.09)
operations per diluted share
                                                              
                                                              
                      Fiscal year ended
                      December 31,
                      2012                          2011
                      Pre-Tax      Net of Tax   Pre-Tax    Net of Tax
                                                              
Reconciliation to Adjusted loss from continuing operations:      
Loss from continuing operations      $(54,419)                $(64,631)
Reconciling items:                                            
Facility closure       958            586           2,461        1,504
costs
Litigation settlement  (637)          (389)                     --
proceeds
Debt issuance cost write-offs        --            517          336
Warrant fair value adjustment        4,992                     736
Tax valuation allowance              19,559                    26,090
Adjusted loss from continuing         $(29,671)                $(35,965)
operations
                                                              
Weighted average diluted shares       95,463                    94,950
outstanding
                                                              
Adjusted loss from continuing         $(0.31)                  $(0.38)
operations per diluted share

CONTACT: Chad Crow
         Senior Vice President and Chief Financial Officer
         Builders FirstSource, Inc.
         (214) 880-3585
 
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