Slide 1: Fourth Quarter and Full Year Earnings Call
Fourth Quarter and Full Year Earnings Call March 1, 2019
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: 2018 Full Year Financial Highlights
2018 Full Year Financial Highlights Net sales Gross margin Adjusted EBITDA $7.7b 24.9% $502m +9.8% +30 bp +19.7% Adjusted EPS Free Cash Flow Leverage ratio $1.90 ~$186m 3.1x +48.9% ~85% of Adj net income Reduction of ~1.1x Leverage ratio – Net debt divided by TTM Adjusted EBITDA www.bldr.com 2/28/20
Slide 4: 2018 Full Year Strategic Achievements
2018 Full Year Strategic Achievements Revenue growth of 9.8% outgrew end markets Organic growth Invested $101m in capital expenditures to grow state-of-the-art industry leading footprint Continued to implement initiatives to drive efficiencies and productivity Operational Rolled out the dispatch and
Slide 5: Q4 2018 Financial Overview
Q4 2018 Financial Overview www.bldr.com
Slide 6: Q4 2018 Financial Highlights
Q4 2018 Financial Highlights Sales unit volume per day: increased 3.3%, a strong finish to the year Revenue $1.8b Value-added products: grew sales per day 6.8%, faster than overall sales growth, led by a 9.1% growth in Manufactured Products +0.5%1 Commodity prices: deflation negatively impacted sale
Slide 7: Q4 2018 Net Sales by Product Category
Q4 2018 Net Sales by Product Category Q4 2018 sales by product category ($ in millions) Lumber & Lumber Manufactured Window, Doors & Gypsum, Roofing & Siding, Metal & Sheet Goods Products Millwork Insulation Concrete $643.3 $365.7 $628.4 $343.9 $169.4 $341.1 $307.7 $322.8 $129.0 $157.0 $514.8 $127.6
Slide 8: Q4 2018 Net Sales by End Market
Q4 2018 Net Sales by End Market Net sales bridge ($ in millions) Deflation Sales mix by end market (% of total) Repair & Remodel / Single family: sales unit volume per day grew 4.5%, faster than Other the single-family end markets 23% R&R / Other: sales unit volume per day grew 1.1% Agricultural tar
Slide 9: Net Debt and Cash flow
Net Debt and Cash flow Debt Profile Net Debt / Leverage Ratio ($ in millions as of December 31st, 2018) ($ in millions) / x times Adjusted EBITDA Revolving Credit Facility $ 179.0 2024 Secured Notes 696.4 2024 Term Loan 458.3 Other finance obligations and capital leases 243.5 Cash (10.1) Total Net F
Slide 10: Net Debt and Cash flow
Net Debt and Cash flow Free Cash Flow & Capital Expenditures Borrowing Base & Net Funded Debt ($ in millions) ($ in millions) Invested in a differentiated platform and industry leading Free cash flow utilized to actively repay debt network and scale Continue to de-risk balance sheet with current ass
Slide 11: Strategic Priorities & Outlook
Strategic Priorities & Outlook www.bldr.com
Slide 12: Leveraging our strengths to accelerate growth and further expand profitability
Leveraging our strengths to accelerate growth and further expand profitability Organic Investment in Operational Excellence Value Added Product Initiatives growth Strong existing business positioned for ongoing growth and profitability as single-family starts return to norm Market leader with exce
Slide 13: Initiatives underway, driving meaningful value creation
Initiatives underway, driving meaningful value creation Estimated EBITDA Category Summary Description Growth Core Single family starts return to historic norm of 1.1m starts Business Repair and Remodeling growth at ~3% annually ~$130-160m Growth Multi-family starts return to 400K historic norm
Slide 14: Operational Excellence Initiative Example – Delivery Optimization
Operational Excellence Initiative Example – Delivery Optimization Sales & Operations Alignment Logistics Optimization Customer Collaboration Digital Tools Provide: Stakeholders across all site functions GPS / black box technology monitors Ability to view order status across all aligned to meet custo
Slide 15: 2018 Recap & Outlook
2018 Recap & Outlook Q4 / Full Year Highlights Market Outlook Q4 2018: Total unit sales volume grew 3% Market fundamentals remain supportive even as Family Single Single-family unit sales volume grew 4.5% growth moderates Timing and extent of growth to be determined by VAP categories grew 8% economy
Slide 16: Appendix – Financial Schedules
Appendix – Financial Schedules www.bldr.com
Slide 17: Reconciliation from Net Income to Adjusted EBITDA
Reconciliation from Net Income to Adjusted EBITDA Three months ended Twelve months ended December 31, December 31, ($ millions) 2018 2017 2018 2017 Reconciliation to Adjusted EBITDA: Reported GAAP Net Income $ 52.0 $ (42.7) $ 205.2 $ 38.8 Integration related expenses 4.3 4.0 19.2 20.7 Debt issuance
Slide 18: Adjusted EBITDA Reconciliation by Quarter
Adjusted EBITDA Reconciliation by Quarter Q1 17 Q2 17 Q3 17 Q4 17 FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 ($ millions) Net sales $ 1,533 $ 1,843.3 $ 1,878.9 $ 1,778.9 $ 7,034.2 $ 1,700.4 $ 2,089.9 $ 2,118.5 $ 1,816.0 $ 7,724.8 Gross margin 376.1 460.8 459.3 431.2 1,727.4 $ 411.1 $ 496.3 $ 522.8 $ 492.8
Slide 19: Interest Reconciliation and Debt Outstanding
Interest Reconciliation and Debt Outstanding Three months ended December 31, Net Debt Interest Expense Outstanding (in millions) 2024 Secured Notes @ 5.625% Fixed $ 10.2 $ 696.4 2024 Term Loan @ 5.3% (Floating LIBOR) 6.3 458.3 Revolving Credit Facility @ 4.3% (Floating LIBOR) 3.4 179.0 Amortization
Slide 20: GAAP Financial Schedules – Income Statement
GAAP Financial Schedules – Income Statement Three Months Ended December 31, 2018 2017 (In thousands, except per share amounts) Sales $ 1,815,980 $ 1,778,939 Cost of sales 1,323,201 1,347,719 Gross margin 492,779 431,220 Selling, general and administrative expenses 402,302 366,419 Income from operati
Slide 21: GAAP Financial Schedules – Income Statement
GAAP Financial Schedules – Income Statement Years Ended December 31, 2018 2017 2016 (In thousands, except per share amounts) Sales $ 7,724,771 $ 7,034,209 $ 6,367,284 Cost of sales 5,801,831 5,306,818 4,770,536 Gross margin 1,922,940 1,727,391 1,596,748 Selling, general and administrative expenses 1
Slide 22: GAAP Financial Schedules – Balance Sheet
GAAP Financial Schedules – Balance Sheet December 31, 2018 2017 (In thousands, except per share amou nts) ASSETS Current assets: Cash and cash equivalents $ 10,127 $ 57,533 Accounts receivable, less allowances of $13,054 and $11,771 at December 31, 2018 and 2017, respectively 654,170 631,992 Other r
Slide 23: GAAP Financial Schedules – Cash Flow
GAAP Financial Schedules – Cash Flow Years Ended December 31, 2018 2017 2016 (In thousands) Cash flows from operating activities: Net income $ 205,191 $ 38,781 $ 144,341 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 97,906 92,993 109,
Slide 24: Investor Relations
Investor Relations Binit Sanghvi 214-765-3804 | binit.sanghvi@bldr.com www.bldr.com