Slide 1: Second Quarter 2018 Earnings Call
Second Quarter 2018 Earnings Call August 8, 2018
Slide 2: Safe Harbor & Non-GAAP Financial Measures
Safe Harbor & Non-GAAP Financial Measures Cautionary Notice Statements in this presentation which are not purely historical facts or which necessarily depend upon future events, including statements about forecasted financial performance or other statements about anticipations, beliefs, expectations
Slide 3: Differentiated, diversified market leader positioned for accelerating growth and expanding profitability
Differentiated, diversified market leader positioned for accelerating growth and expanding profitability Differentiated market leader with exceptional geographic end market diversity Competitively advantaged in a highly fragmented industry Capitalizing on highly favorable housing market dynamics Enh
Slide 4: Builders FirstSource: Differentiated market leader capitalizing on strategic advantages and enhanced focus on growth
Builders FirstSource: Differentiated market leader capitalizing on strategic advantages and enhanced focus on growth The largest LBM (Lumber and Building Material) supplier of building products in the U.S. professional market Margin expansion opportunities with prefabricated components and value
Slide 5: Exceptional geographic diversity and balanced end market exposure
Exceptional geographic diversity and balanced end market exposure Diversity, scale and expansive geographic footprint enables exceptional customer reach and less exposure to any one market Presence in 75 of top 100 MSAs and in 40 states National scale facilitates strategic partnerships with cu
Slide 6: Labor shortages and extended building cycle times increase the relative value of our high margin value-added products
Labor shortages and extended building cycle times increase the relative value of our high margin value-added products Investing to drive growth and expand share of wallet in value-added products Capacity expansion In 2018, we are adding 3 new truss manufacturing facilities, 10 additional lines t
Slide 7: Supportive US housing market dynamics and outlook
Supportive US housing market dynamics and outlook U.S. housing starts(1) Professional home improvement products spending(2) Historic Averages: $120 Total 1.5M (SF 1.1M) $100 $80 ($ in billions) (in millions) $60 $40 $20 $0 1992 1996 2000 2004 2008 2012 2016E 2020E Housing starts level is still signi
Slide 8: Leveraging our strengths to accelerate growth and further expand profitability
Leveraging our strengths to accelerate growth and further expand profitability Core Business Organic Operational Existing Growth Investment in Excellence Business Value Added Initiatives (Single family starts Product growth return to historic norm of 1.1M) Strong existing business positioned for a
Slide 9: Initiatives underway, with meaningful value creation
Initiatives underway, with meaningful value creation Estimated Category Summary Description EBITDA Growth Single family starts return to historic norm of 1.1M Core Business Repair and Remodeling growth at ~3% annually ~$250-280M Growth Multi-family starts return to 400K historic norm Grow fa
Slide 10: Adjusted Financial Overview
Adjusted Financial Overview
Slide 11: Q2 2018 Adjusted results
Q2 2018 Adjusted results Net Revenue Bridge ($ in millions) Sales grew 13.4% over prior year Sales volume grew 6.0% in single family and 1.8% in R&R & other Multi-family down as expected Commodity price inflation benefited sales by 8.8% Valued added product sales up 11.1% led by an increas
Slide 12: 2018 YTD Financial Highlights
2018 YTD Financial Highlights Net sales Adjusted EBITDA ($ in millions) ($ in millions) $222 $3,790 $200 $3,376 2017 2018 1H 2017 1H 2018 Adjusted Earnings Per Share Leverage Ratio ($ in millions) (x Adjusted EBITDA) 4.8 $0.77 4.5 $0.48 YTD 2017 YTD2018 2017 2018 (1) See reconciliations to GAAP on p
Slide 13: Free cash flow and deleveraging priorities
Free cash flow and deleveraging priorities We believe will enable Builders FirstSource in The following financial attributes… 2018 to… Strong projected free cash flow generation Generate net free cash flow of $170-190M Relatively low capital intensive business Fund capital investments at 1.5% of sal
Slide 14: Appendix - Financial Schedules
Appendix - Financial Schedules
Slide 15: Reconciliation from Net Income to Adjusted EBITDA
Reconciliation from Net Income to Adjusted EBITDA Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 (in $ millions) Reported GAAP Net Income $ 56.6 $ 37.9 $ 79.8 $ 41.7 Integration related expenses 6.0 5.1 10.4 11.0 (1) Debt issuance and refinancing cost - - - 2.4 Adjusted Ne
Slide 16: Adjusted EBITDA Reconciliation by Quarter
Adjusted EBITDA Reconciliation by Quarter Quarter 1 Quarter 2 Quarter 3 Quarter 4 Full Year Quarter 1 Quarter 2 T12M 2017 2017 2017 2017 2017 2018 2018 Q2-18 Financial Data Net sales $ 1,533.1 $ 1,843.3 $ 1,878.9 $ 1,778.9 $ 7,034.2 $ 1,700.4 $ 2,089.9 $ 7,448.1 Sales adjustment for closed locations
Slide 17: Interest Reconciliation and Debt Outstanding
Interest Reconciliation and Debt Outstanding Three months ended June 30, 2018 Net Debt Adjusted FY2018 (1) Interest Expense Outstanding Forecasted Cash Interest (in millions) 2024 Secured Notes @ 5.625% Fixed $ 10.5 $ 750.0 $ 42.2 (2) 2024 Term Loan @ 5.0% (Floating LIBOR) 6.2 460.6 22.8 (2) Revolvi
Slide 18: GAAP Financial Schedules – Income Statement
GAAP Financial Schedules – Income Statement Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 (Unaudited) (In thousands, except per share amounts) Sales $ 2,089,888 $ 1,843,297 $ 3,790,324 $ 3,376,361 Cost of sales 1,593,560 1,382,500 2,882,944 2,539,512 Gross margin 496,328
Slide 19: GAAP Financial Schedules – Balance Sheet
GAAP Financial Schedules – Balance Sheet June 30, December 31, 2018 2017 (Unaudited) (In thousands, except per share amounts) ASSETS Current assets: Cash and cash equivalents $ 13,196 $ 57,533 Accounts receivable, less allowances of $13,437 and $11,771 at June 30, 2018 and December 31, 2017, respect
Slide 20: GAAP Financial Schedules – Cash Flow
GAAP Financial Schedules – Cash Flow Six Months Ended June 30, 2018 2017 (Unaudited) (In thousands) Cash flows from operating activities: Net income $ 79,842 $ 41,732 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 47,587 47,765 Amortizatio
Slide 21: p SBuilders
p SBuilders 4FirstSource