Slide 1: Second Quarter 2017 Earnings Call
Second Quarter 2017 Earnings Call August 4, 2017
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 One of the largest LBM (Lumber and Building Material) suppliers of building products, in the U.S. professional market Margin expansion opportunities with prefabricated components
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 YTD 2017 sales by product category Lumber & Sheet Goods Manufactured product Windows, doors & millwork Other Lumber & 11% Lumber Sheet Goods Siding, Metal 35% & Concrete 9% Gypsum, R
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) 2.5 Historic Averages: $120 Total 1.5M (SF 1.1M) 2.0 $100 $80 1.5 ($ in billions) (in millions) $60 1.0 $40 0.5 $20 0.0 $0 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 201
Slide 8: Executing on our 2017 priorities – enhancing our focus on above market growth and profit expansion
Executing on our 2017 priorities – enhancing our focus on above market growth and profit expansion Accelerate capture of market share, YTD Growth of 7.4% in single Leverage our geographic reach, vendor and Above Market Growth family customer relationships, and leading scale to grow faster than
Slide 9: What’s Next? Leveraging our strengths to accelerate growth and further expand profitability
What’s Next? Leveraging our strengths to accelerate growth and further expand profitability Organic Investment in Assuming Market Norm, We Expect Value Added Product Core Business Growth Double 2016 EBITDA Existing Business growth EPS of over $2.00 Operational Excellence (Single family starts retu
Slide 10: Pro Forma Adjusted Financial Overview
Pro Forma Adjusted Financial Overview
Slide 11: Q2 2017 Adjusted results
Q2 2017 Adjusted results Net Revenue Bridge ($ in millions) Sales excluding closed locations grew 10.1% over prior year Sales volume +7.4% in single family new residential construction +2.0% sales volume growth in the repair and remodel end market Commodity price inflation benefited sales by
Slide 12: 1H 2017 Adjusted results
1H 2017 Adjusted results Net Revenue Bridge ($ in millions) Sales excluding closed locations grew 10.1% over prior year Sales volume +7.4% in single family new residential construction +5.1% sales volume growth in the repair and remodel end market Commodity price inflation benefited sales by
Slide 13: Free cash flow and deleveraging priorities
Free cash flow and deleveraging priorities The following financial attributes… We believe will enable Builders FirstSource to… Strong projected free cash flow generation Generate free cash flow of $145-155M in 2017 Low capital intensive business with ongoing Reduce debt and retire our most expensive
Slide 14: Liquidity and debt profile underpin accelerating value creation opportunities
Liquidity and debt profile underpin accelerating value creation opportunities Focus on deleveraging the balance sheet, increasing cash flow and improving liquidity Total liquidity at June 30, 2017 was $723M Extended debt maturity profile • No maturities until 2022 • The terms of our debt allow
Slide 15: Appendix - Financial Schedules
Appendix - Financial Schedules
Slide 16: Reconciliation from Net Income to Adjusted EBITDA Q2 2017
Reconciliation from Net Income to Adjusted EBITDA Q2 2017 Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 (in millions) Reported GAAP Net Income (Loss) $ 37.9 $ 29.4 $ 41.7 $ 12.5 Integration related expenses 5.1 7.5 11.0 12.9 Debt issuance and refinancing cost (1) - 1.7 2.
Slide 17: Adjusted EBITDA Reconciliation by Quarter
Adjusted EBITDA Reconciliation by Quarter Quarter 1 Quarter 2 Quarter 3 Quarter 4 Fiscal Quarter 1 Quarter 2 T12M 2016 2016 2016 2016 2016 2017 2017 Q2-17 Financial Data Net sales $ 1,397.1 $ 1,677.3 $ 1,746.0 $ 1,546.9 $ 6,367.3 $ 1,533.1 $ 1,843.3 $ 6,669.2 Sales adjustment for closed locations (6
Slide 18: GAAP Financial Schedules – Income Statement
GAAP Financial Schedules – Income Statement Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (Unaudited) (In thousands, except per share amounts) Sales $ 1,843,297 $ 1,677,300 $ 3,376,361 $ 3,074,415 Cost of sales 1,382,500 1,258,969 2,539,512 2,306,335 Gross margin 460,797
Slide 19: GAAP Financial Schedules – Balance Sheet
GAAP Financial Schedules – Balance Sheet June 30, December 31, 2017 2016 (Unaudited) (In thousands, except per share amounts) ASSETS Current assets: Cash and cash equivalents $ 6,931 $ 14,449 Accounts receivable, less allowances of $12,657 and $11,571 at June 30, 2017 and December 31, 2016, respecti
Slide 20: GAAP Financial Schedules – Cash Flow
GAAP Financial Schedules – Cash Flow Six months ended June 30, 2017 2016 (Unaudited) (In thousands) Cash flows from operating activities: Net income $ 41,732 $ 12,461 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 47,765 61,349 Amortizatio
Slide 21: p SBuilders
p SBuilders 4FirstSource