Builders FirstSource Inc (BLDR, Financial) released its Q3 2023 earnings report on November 1, 2023. The company reported net sales of $4.5 billion, a decrease of 21.3% primarily driven by a weaker housing market and commodity deflation, partially offset by growth from acquisitions. Net income decreased 38.8% to $451.5 million, or $3.59 per diluted share compared to $4.72 in the prior year period.
Financial Performance Highlights
The gross profit margin percentage decreased 10 basis points to 34.9%, primarily due to core organic margin normalization and partially offset by Multi-Family strength. Adjusted EBITDA decreased 30.6% to $813.3 million, primarily driven by lower net sales. Adjusted EBITDA margin declined by 240 basis points to 17.9% attributable to lower net sales and reduced operating leverage.
Cash provided by operating activities was $649.5 million, down $851.3 million compared to the prior year period, while free cash flow was $537.8 million, down $879.4 million compared to the prior year period. The company ended the quarter with a strong balance sheet with liquidity of $1.1 billion and a net debt to LTM Adjusted EBITDA ratio of 1.1x.
Share Repurchase and Acquisitions
During the quarter, Builders FirstSource Inc (BLDR, Financial) repurchased 1.7 million shares of common stock at an average price of $136.22 for $224.9 million. Year to date, the company has repurchased 16.2 million shares of its common stock at an average price of $97.43 per share for $1.6 billion. The company has reduced shares outstanding by 11.2% year to date.
The company also completed two acquisitions during the quarter. Year to date, the company has completed five acquisitions with aggregate prior year sales of approximately $350 million.
Company Outlook
Despite industry volatility and macroeconomic headwinds, Builders FirstSource Inc (BLDR, Financial) remains confident in its 2023 outlook. The company expects net sales to be in a range of $16.8 billion to $17.1 billion, gross profit margin to be in a range of 34% to 35%, and Adjusted EBITDA to be in a range of $2.7 billion to $2.8 billion.
Explore the complete 8-K earnings release (here) from Builders FirstSource Inc for further details.
