Slide 1: Third Quarter 2019 Earnings Presentation
Third Quarter 2019 Earnings Presentation November 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: YTD 2019 Operational Update
YTD 2019 Operational Update YTD 2019 Highlights YTD 2019 Key Figures Sales volume growth of 6%1 was well above the market, further demonstrating the solid execution of our strategy Solid Growth in volumes across all customer end-markets and product categories Net $5.5b Growth Sales -6.6% YoY A decli
Slide 4: Q3 2019 Financial Highlights
Q3 2019 Financial Highlights Sales volume per day1: +9% with above market growth in all three end markets Net sales Value-added products: +11% sales volume per day1 $2.0b Commodity prices: deflation impacted sales by an estimated -17% reflecting lower lumber and panel prices -6.5% YoY than the same
Slide 5: Q3 2019 Net Sales by Product Category
Q3 2019 Net Sales by Product Category Q3 2019 sales by product category ($ in millions / % growth1) Lumber & Lumber Manufactured Window, Doors & Siding, Metal & Gypsum, Roofing & Sheet Goods Products Millwork Concrete Insulation $818.7 $679.9 $605.5 $385.9 $401.2 $407.4 $347.5 $372.5 $318.6 $183.5 $
Slide 6: Q3 2019 Net Sales by End Market
Q3 2019 Net Sales by End Market Net sales bridge ($ in millions) (369) Sales mix by end market (% of total) Repair & Remodel / Single family: +9.3% per day, outperforming the single-family Other starts market 23% R&R / Other: +10.7% per day due in part to an improvement in activity in the SoCal mark
Slide 7: Cash flow and balance sheet support capital allocation priorities
Cash flow and balance sheet support capital allocation priorities Strong financial underpinnings… …allow BLDR to invest in value creation Strong Free Cash Flow1 Reinvest in the business $282.3 $181.4 $116.1 Balance sheet strength 2017 2018 YTD 2019 Net Leverage2 Improvement Value creating “tuck-in”
Slide 8: Operational Excellence initiatives driving greater efficiencies in working capital
Operational Excellence initiatives driving greater efficiencies in working capital Framework to drive success… …producing tangible results Annual working capital targets and milestones Systems, tools and processes to enhance and Execution Monthly follow-ups and corrective measures standardize receiv
Slide 9: Outlook
Outlook Financial Outlook Market Outlook Q4 2019: Net sales down 2% to 5% over the prior year Mid-single digits percent growth in Q4 Family Single Commodity deflation impact on net sales of -7 to -11% Market outlook continues to improve vs. first half of 2019 Adjusted EBITDA between $100 – $110 mill
Slide 10: Initiatives on track, driving meaningful value creation
Initiatives on track, driving meaningful value creation ~EBITDA Category Financial Targets contribution YTD 2019 sales ~$130-160m > 50% increase in Adjusted Core Business Growth volume growth of 6%, well above EBITDA as compared to FY2018 market (~$750m) Value-Added Product Value-added > $3.00 - $3.
Slide 11: Differentiated market leader positioned for above market growth and expanding profitability
Differentiated market leader positioned for above market growth and expanding profitability Leadership in a highly fragmented industry Exceptional geographic, customer and end market diversity Strategic investment in value-added capacity and growth, driving market share gains and margin expansion On
Slide 12: Appendix – Financial Schedules
Appendix – Financial Schedules www.bldr.com
Slide 13: Reconciliation from Net Income to Adjusted EBITDA
Reconciliation from Net Income to Adjusted EBITDA Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 TTM ($ millions) Net sales $ 1,700.4 $ 2,089.9 $ 2,118.5 $ 1,816.0 $ 7,724.8 $ 1,631.3 $ 1,904.5 $ 1,981.0 $ 7,332.8 Gross margin $ 411.0 $ 496.3 $ 522.8 $ 492.8 1,922.9 $ 442.0 $ 517.2 $ 541.1 $ 1,993.
Slide 14: Reconciliation from Net Income to Adjusted EBITDA
Reconciliation from Net Income to Adjusted EBITDA Three months ended Nine months ended September 30, September 30, ($ millions) 2019 2018 2019 2018 Reconciliation to Adjusted EBITDA: Reported GAAP Net Income $ 78.1 $ 73.3 $ 180.4 $ 153.2 Integration related expenses 2.8 4.5 10.8 14.9 Debt issuance a
Slide 15: Debt, Interest and Free Cash Flow Reconciliation
Debt, Interest and Free Cash Flow Reconciliation Three months ended September 30, 2019 Net Debt Interest Expense Outstanding Debt and Interest (in millions) 2027 Secured Notes @ 6.75% Fixed $ 7.7 $ 475.0 2024 Secured Notes @ 5.625% Fixed 7.4 503.9 2024 Term Loan @ 5.6% (Floating LIBOR) 2.1 157.1 Rev
Slide 16: GAAP Financial Schedules – Income Statement
GAAP Financial Schedules – Income Statement Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (Unaudited) (In thousands, except per share amounts) Sales $ 1,981,035 $ 2,118,467 $ 5,516,858 $ 5,908,791 Cost of sales 1,439,893 1,595,686 4,016,585 4,478,630 Gross marg
Slide 17: GAAP Financial Schedules – Balance Sheet
GAAP Financial Schedules – Balance Sheet September 30, December 31, 2019 2018 (Unaudited) (In thousands, except per share amounts) ASSETS Current assets: Cash and cash equivalents $ 43,271 $ 10,127 Accounts receivable, less allowances of $14,280 and $13,054 at September 30, 2019 and December 31, 201
Slide 18: GAAP Financial Schedules – Cash Flow
GAAP Financial Schedules – Cash Flow Nine Months Ended September 30, 2019 2018 (Unaudited) (In thousands) Cash flows from operating activities: Net income $ 180,442 $ 153,170 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 71,771 72,691 Amorti
Slide 19: Investor Relations
Investor Relations Binit Sanghvi 214-765-3804 | binit.sanghvi@bldr.com www.bldr.com