Slide 1: Fourth Quarter 2019 Earnings Presentation
Fourth Quarter 2019 Earnings Presentation February 21, 2020 www.bldr.com
Slide 2: Safe Harbor & Non-GAAP Financial Measures
Safe Harbor & Non-GAAP Financial Measures 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, forecasted financial performance or other s
Slide 3: 2019 Full Year Financial Highlights
2019 Full Year Financial Highlights Sales Gross margin Adjusted EBITDA $7.3b 27.2% $516m -6% +230 bp +3% Adjusted EPS Free Cash Flow Net Leverage ratio $2.09 $391m 2.5x +10% +$210 million Reduction of 0.6x Leverage ratio – Net debt divided by FY2019 Adjusted EBITDA www.bldr.com 02/21/2020 2
Slide 4: 2019 Full Year Operational and Strategic Highlights
2019 Full Year Operational and Strategic Highlights Solid Growth Operational Excellence Contributing to Profitability Pricing tools rolled out to 14 markets improving margin Sales volume growth of 7%1 on solid execution of our management and timeliness of pricing decisions strategic plan Successful
Slide 5: Q4 2019 Financial Highlights
Q4 2019 Financial Highlights Sales volume: Growth across all three end markets2 with value-added products Net sales $1.8b contributing nearly half of the growth. -3% YoY Value-added products: +9% sales volume led by 11% growth in Manufactured (+8% volume growth)1 Products and 7% in Windows, Doors an
Slide 6: Q4 2019 Net Sales Mix and Product Category
Q4 2019 Net Sales Mix and Product Category Q4 2019 sales by product category ($ in millions / % change) Specialized Products: Lumber & Lumber Value-Added Products: Sheet Goods Manufactured Window, Doors & Siding, Metal & Gypsum, Roofing & Products Millwork Concrete Insulation $643.3 $628.4 $356.7 $3
Slide 7: Q4 2019 Net Sales by End Market
Q4 2019 Net Sales by End Market Net sales bridge ($ in millions) 1,764 Sales mix by end market (% of total) Repair & Remodel / Single family: +8% led by high single digit growth Other in Value-Added Products 23% R&R / Other: +7% with broad growth across many markets Multi-Family 6% 71% Multi-family:
Slide 8: Strong Cash Flow and Balance Sheet Support Capital Allocation Priorities
Strong Cash Flow and Balance Sheet Support Capital Allocation Priorities Strong financial underpinnings... …Allow us to invest in value creation Strong Free Cash Flow 1 Reinvestments in the business $391.2 $181.4 $116.1 Balance sheet strength 2017 2018 2019 Net Leverage2 Improvement Value-creating a
Slide 9: Focused Acquisition Strategy to Fuel Next Generation of Growth
Focused Acquisition Strategy to Fuel Next Generation of Growth In addition to organic growth... Penetrate deeper in existing markets Geographical Scale Expand into new markets In last 12 months completed five Broaden product portfolio in target markets acquisitions contributing ~$240 million of annu
Slide 10: Executed on Our 2019 Priorities While Further Expanding Profitability
Executed on Our 2019 Priorities While Further Expanding Profitability with Initiatives Underway 2019 Category EBITDA Factors Record of Success Contribution Solid execution generated volume growth across Core Business our end markets led by value-added products ~($65m)1 Adjusted EBITDA Growth Modest
Slide 11: Long Range Initiatives Poised to Deliver Additional Value Creation
Long Range Initiatives Poised to Deliver Additional Value Creation EBITDA Growth Long Range Plan Category Key Initiatives 2022 vs 2019 2022 Targets Core Business Core business growth driven by value-added Growth products and modest end market expansion Adjusted EBITDA of ~$750m Grow value-added prod
Slide 12: Outlook
Outlook Financial Outlook Market Outlook Q1 2020: Mid-single digits percent growth Net sales up 6 – 10% over the prior year Family Single Market outlook continues to improve Commodity inflation impact on net sales of 0 – 4% vs. first half of 2019 Adj. EBITDA between $90 – $100 million Gross margin p
Slide 13: Differentiated market leader positioned for above market growth and expanding profitability
Differentiated market leader positioned for above market growth and expanding profitability Leadership in a highly fragmented industry Exceptional geographic, customer and end market diversity Strategic investment in value-added capacity and growth, driving market share gains and margin expansion On
Slide 14: Appendix – Financial Schedules
Appendix – Financial Schedules www.bldr.com
Slide 15: Reconciliation from Net Income to Adjusted EBITDA
Reconciliation from Net Income to Adjusted EBITDA Three months ended Twelve months ended December 31, December 31, ($ millions) 2019 2018 2019 2018 Reconciliation to Adjusted EBITDA: Reported GAAP Net Income $ 41.4 $ 52.0 $ 221.8 $ 205.2 Integration related expenses 2.3 4.3 13.1 19.2 Debt issuance a
Slide 16: Debt, Interest and Free Cash Flow Reconciliation
Debt, Interest and Free Cash Flow Reconciliation Three months ended December 31, Interest Expense Net Debt Outstanding Debt and Interest (in millions) 2027 Secured Notes @ 6.75% Fixed $ 7.9 $ 475.0 2024 Secured Notes @ 5.625% Fixed 7.1 503.9 2024 Term Loan @ 5.6% (Floating LIBOR) 1.5 52.0 Revolving
Slide 17: GAAP Financial Schedules – Income Statement
GAAP Financial Schedules – Income Statement1 Years Ended December 31, 2019 2018 2017 (In thousands, except per share amounts) Net sales $ 7,280,431 $ 7,724,771 $ 7,034,209 Cost of sales 5,303,602 5,801,831 5,306,818 Gross margin 1,976,829 1,922,940 1,727,391 Selling, general and administrative expen
Slide 18: GAAP Financial Schedules – Balance Sheet
GAAP Financial Schedules – Balance Sheet1 December 31, 2019 2018 (In thousands, except per share amounts) ASSETS Current assets: Cash and cash equivalents $ 14,096 $ 10,127 Accounts receivable, less allowances of $13,492 and $13,054 at December 31, 2019 and 2018, respectively 614,946 654,170 Other r
Slide 19: GAAP Financial Schedules – Cash Flow
GAAP Financial Schedules – Cash Flow1 Years Ended December 31, 2019 2018 2017 (In thousands) Cash flows from operating activities: Net income $ 221,809 $ 205,191 $ 38,781 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 100,038 97,906 92
Slide 20: Investor Relations
Investor Relations Binit Sanghvi 214-765-3804 | binit.sanghvi@bldr.com www.bldr.com