Builders Firstsource, Inc. · NYSE:BLDR
Builders Firstsource — Q2 2006 Earnings Presentation
29 slides from Builders Firstsource's earnings presentation, Oct 13, 2006
Slide 1: Builders FirstSource Investor Presentation Second Quarter 2006
Builders FirstSource Investor Presentation Second Quarter 2006
Slide 2: Forward-Looking Statements; Use of Non-GAAP Financial Measures
Forward-Looking Statements; Use of 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,
Slide 3: Builders FirstSource Overview
Builders Builders FirstSource FirstSource Overview Overview
Slide 4: Company Overview: Who Are We and What Do We Do?
Company Overview: Who Are We and What Do We Do? • 5th largest building products provider in $145 billion industry with operations in 20 of the nation’s top 50 MSAs (as ranked by single family housing permits) • Fully integrated, one-stop supplier, combining manufacturing, supply and installation of
Slide 5: Company Overview: Where Do We Operate?
Company Overview: Where Do We Operate?
Slide 6: Company Overview: Who Are Our Customers?
Company Overview: Who Are Our Customers? • Homebuilders • Focus on the nation’s largest homebuilders, the “Production Homebuilders” • Top 10 customers represent approximately 26% of total sales, with no one customer exceeding 5% in fiscal year 2005
Slide 7: Company Overview: What Products and Services Do We Offer?
Company Overview: What Products and Services Do We Offer? Lumber & Lumber Millwork Sheet Goods • $108.7mm of Sales • $420.7mm of Sales (8.8% of Total) (34.2% of Total) Other Building Prefabricated Products & Services Components • $259.4mm of Sales • $195.6mm of Sales (21.1% of Total) (15.9% of Total
Slide 8: Company Overview: How Have We Improved?
Company Overview: How Have We Improved? Pre-Integration Today (2005) Heavy Dependency on Balanced Mix; Distribution, Product Offering Lumber and Lumber Sheet Goods Manufacturing, and Installed Regions / 8 3 Divisions IT Systems 22 2 Sales Mix 30% Value-Added Prod ucts 50% Value-Added Products Centra
Slide 9: Company Overview: How Will We Grow?
Company Overview: How Will We Grow? • Organic Growth • Improved sales and market management to increase market share • Increased penetration of manufactured components by: • Taking share from lumber dealers who do not have manufacturing capacity • Leveraging sales of manufactured components to drive
Slide 10: Operations Review
Operations Operations Review Review
Slide 11: Operations Review: What Differentiates Us?
Operations Review: What Differentiates Us? • Leading positions in attractive local markets • Favorable portfolio mix — Focus on value-added sales involving manufacturing, assembly or installation • Large and fast-growing manufacturing platform • Industry-leading scale and fully integrated operations
Slide 12: Operations Review: Leading Market Positions
Operations Review: Leading Market Positions • BLDR boasts the #1 or #2 position in nearly 75% of our markets • Markets are very local-centric, making relationships and expertise with local building codes critical to success • Significant barriers to entry insulate market leaders • Leading market pos
Slide 13: Operations Review: Value-Added Products
Operations Review: Value-Added Products • Approximately 50% of sales are from value-added products • Since 2001 BLDR has steadily increased its sales mix of higher- margin manufactured products (prefabricated components, millwork and windows/doors) • BLDR has a greater concentration of manufactured
Slide 14: Operations Review: Large & Fast Growing Manufacturing Platform
Operations Review: Large & Fast Growing Manufacturing Platform • BLDR is benefiting from the homebuilders’ shift to prefabricated components • Roof trusses and panels account for the majority of prefabricated components sales • Continue to focus on this higher-margin product category Sales Gross Mar
Slide 15: Operations Review: Industry Leading Scale
Operations Review: Industry Leading Scale • BLDR has nearly twice the sales/facility of our nearest competitor, which drives higher operating leverage and profitability 40 $37.1mm 2005 Pro Sales per Distribution Center ($mm) 1 35 30 25 20 $14.6mm 15 $11.9mm 10 $7.8mm 5 0 and • Notes: (1) Estimates b
Slide 16: Current Market Conditions
Current Current Market Market Conditions Conditions
Slide 17: Current Market Conditions: Housing Activity in BLDR States
Current Market Conditions: Housing Activity in BLDR States Housing activity has declined significantly in recent months, even in BLDR states. However, BLDR’s diverse geographic footprint helps to mitigate our exposure to general downward trends in the U.S. housing market. 8 Months Ended 3 Months End
Slide 18: Current Market Conditions: Housing Activity Trend in BLDR States
Current Market Conditions: Housing Activity Trend in BLDR States Trailing 12 Month Single Family Housing Permits in BLDR States 800,000 787,500 775,000 762,500 Single Family Permits 750,000 737,500 725,000 712,500 700,000 687,500 675,000 662,500 650,000 Aug '04 Apr '05 Aug '05 Apr '06 Aug '06 Sep '0
Slide 19: Current Market Conditions: Commodity Prices
Current Market Conditions: Commodity Prices Year-to-date August 2006 lumber prices are down 19.2% from the prior year. Composite Lumber Prices 500 450 400 $ per thousand 350 300 250 200 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Week 2003 2004 2005 YTD2006 Note: Estimate based on public sour
Slide 20: Industry Fundamentals
Industry Industry Fundamentals Fundamentals
Slide 21: Industry Fundamentals: Housing Market
Industry Fundamentals: Housing Market The National Association of Homebuilders is forecasting total housing starts of 1.878 million in 2006, down 9.4% from 2005 The Harvard Joint Center for Housing Studies is forecasting an average of 1.90 million starts per year for the next 10 years The Brookings
Slide 22: Industry Fundamentals: Production Homebuilders
Industry Fundamentals: Production Homebuilders • The Production Homebuilders are by far the BLDR Sales to the Top 10 Homebuilders fastest-growing segment of the homebuilder market 550 $540.4mm • BLDR sales to the Top 10 homebuilders have grown at a 500 0% 20% CAGR since 2001 0. R:2 G 400 CA • Top 10
Slide 23: Operating Results
Operating Operating Results Results
Slide 24: Operating Results
Operating Results BLDR has significantly increased sales, profitability and cash flow over the last three years with minimal capital investments Six Months Ended Fiscal Year Ended December 31, June 30, (US$mm) 2003 2004 2005 2005 2006 Net Sales $1,675.1 $2,058.0 $2,337.8 $1,127.9 $1,231.0 Growth (%)
Slide 25: Builders FirstSource – Investment Highlights
Builders FirstSource – Investment Highlights • Fully integrated distributor, manufacturer and installer to production homebuilders – the fastest-growing segment of the builder market • Significant growth opportunities – market share gains, new operations and selective acquisitions • Leading position
Slide 26: Appendix
| Builders » FirstSource > Appendix ee |
Slide 27: Appendix – Non-GAAP Reconciliations
Appendix – Non-GAAP Reconciliations Six Months Ended Fiscal Year Ended December 31, June 30, (US$mm) 2003 2004 2005 2005 2006 Reported net income $ 17.6 $ 51.6 $ 48.6 $ 1.3 $47.7 Adjustments: Stock compensation expense - 0.4 36.4 36.4 - Write-off of unamortized debt issuance costs - 2.2 10.3 10.3 -
Slide 28: Appendix – Non-GAAP Reconciliations (Continued)
Appendix – Non-GAAP Reconciliations (Continued) Six Months Ended Fiscal Year Ended December 31, June 30, (US$mm) 2003 2004 2005 2005 2006 Reported net income $ 17.6 $ 51.6 $ 48.6 $ 1.3 $ 47.7 Adjustments: Depreciation and amortization expense 20.2 19.4 19.1 9.5 10.5 Interest expense 11.1 24.5 47.2 3
Slide 29: \ Builders
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