Slide 1: Third Quarter 2018 Earnings Call
Third Quarter 2018 Earnings Call November 2, 2018
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: Differentiated, diversified market leader positioned for ongoing growth and expanding profitability
Differentiated, diversified market leader positioned for ongoing growth and expanding profitability Differentiated market leader with exceptional geographic and end market diversity Competitively advantaged in a highly fragmented industry Capitalizing on ongoing favorable housing market dynamics Enh
Slide 4: Builders FirstSource: Differentiated market leader capitalizing on strategic advantages and focused on growth
Builders FirstSource: Differentiated market leader capitalizing on strategic advantages and focused 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-added
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 plans – 2018 Two new truss manufacturing facilities, ~10 additional lines to exist
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 o
Slide 9: Initiatives underway, driving meaningful value creation
Initiatives underway, driving meaningful value creation Estimated Category Summary Description EBITDA Growth (baseline 2016) Single family starts return to historic norm of 1.1M Core Business Repair and Remodeling growth at ~3% annually ~$250-280M Growth Multi-family starts return to 400K hist
Slide 10: Adjusted Financial Overview
Adjusted Financial Overview
Slide 11: Q3 2018 Adjusted results
Q3 2018 Adjusted results Net Revenue Bridge ($ in millions) Sales grew 12.7% over prior year Sales volume grew an estimated 3.1% in single family and 0.5% in multi-family R&R / other down 2.6% on a slowdown in select markets Commodity inflation benefited sales by 11.2% reflecting higher lumb
Slide 12: 2018 YTD Financial Highlights
2018 YTD Financial Highlights Net sales Adjusted EBITDA ($ in millions) ($ in millions) $5,909 $377 $5,255 $322 9M 2017 9M 2018 9M 2017 9M 2018 Adjusted Earnings Per Share Net Debt / LTM Adj. EBITDA Ratio ($ in millions) (x Adjusted EBITDA) 4.6 $1.44 3.9 $0.87 9M 2017 9M 2018 Q3 2017 Q3 2018 (1) See
Slide 13: Free cash flow and deleveraging priorities
Free cash flow and deleveraging priorities The following financial attributes… …put Builders FirstSource fully on track 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 sales Our curr
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 Nine months ended September 30, September 30, 2018 2017 2018 2017 (in $ millions) Reported GAAP Net Income $ 73.3 $ 39.7 $ 153.2 $ 81.5 Integration related expenses 4.5 5.7 14.9 16.7 Debt issuance and refinancing cost (1) - - - 2.4
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 Quarter 3 T12M 2017 2017 2017 2017 2017 2018 2018 2018 Q3-18 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 $ 2,118.5 $ 7,687.7 Gross margin
Slide 17: Interest Reconciliation and Debt Outstanding
Interest Reconciliation and Debt Outstanding Three months ended September 30, Net Debt Adjusted Annual Go Interest Expense Outstanding Forward Cash Interest (1) (in millions) 2024 Secured Notes @ 5.625% Fixed $ 10.5 $ 750.0 $ 42.2 (2) 2024 Term Loan @ 5.39% (Floating LIBOR) 6.3 459.4 24.6 (2) Revolv
Slide 18: GAAP Financial Schedules – Income Statement
GAAP Financial Schedules – Income Statement Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (Unaudited) (In thousands, except per share amounts) Sales $ 2,118,467 $ 1,878,909 $ 5,908,791 $ 5,255,270 Cost of sales 1,595,686 1,419,587 4,478,630 3,959,099 Gross marg
Slide 19: GAAP Financial Schedules – Balance Sheet
GAAP Financial Schedules – Balance Sheet September 30, December 31, 2018 2017 (Unaudited) (In thousands, except per share amounts) ASSETS Current assets: Cash and cash equivalents $ 34,446 $ 57,533 Accounts receivable, less allowances of $13,470 and $11,771 at September 30, 2018 and December 31, 201
Slide 20: GAAP Financial Schedules – Cash Flow
GAAP Financial Schedules – Cash Flow Nine Months Ended September 30, 2018 2017 (Unaudited) (In thousands) Cash flows from operating activities: Net income $ 153,170 $ 81,482 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 72,691 70,796 Amor
Slide 21: p SBuilders
p SBuilders 4FirstSource