OUTPERFORM TODAY. TRANSFORM TOMORROW.
Corporate Presentation
M a y 2 0 2 4
Safe Harbor and Non-GAAP Financial Measures
Cautionary Notice
Statements in this presentation 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 statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. All forward-looking statements are based upon currently available information and the Company's current assumptions, expectations and projections about future events. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are by nature inherently uncertain, and actual results or events may differ materially from the results or events described in the forward-looking statements as a result of many factors. Builders FirstSource, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward- looking statements involve risks and uncertainties, many of which are beyond the Company's control or may be currently unknown to the Company, that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to the Company's growth strategies, including gaining share and its digital strategies, or the Company's revenues and operating results being highly dependent on, among other things, the homebuilding industry, lumber prices and macroeconomic trends, including interest rates and potential labor and supply shortages. Builders FirstSource, Inc. may not succeed in addressing these and other risks. Further information regarding factors that could affect our financial and other results can be found in the risk factors section of Builders FirstSource, Inc.'s most recent annual report on Form 10-K filed with the Securities and Exchange Commission ("SEC") and may also be described from time to time in the other reports the Company files with the SEC. Consequently, all forward-looking statements in this presentation are qualified by the factors, risks and uncertainties contained therein.
Use of Non-GAAP Financial Measures
This presentation includes financial measures and terms not calculated in accordance with accounting principles generally accepted in the United States ("GAAP") in order to provide investors with an alternative method for assessing our operating results in a manner that enables investors to more thoroughly evaluate our current performance as compared to past performance. We believe these non-GAAP measures provide investors with a better baseline for modeling our future earnings expectations. Our management uses these non-GAAP measures for the same purpose. We believe that our investors should have access to the same set of tools that we use in analyzing our results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Our calculations of adjusted EBITDA, adjusted EBITDA margin, free cash flow and net leverage are not necessarily comparable to similarly titled measures reported by other companies. The company provided detailed explanations and reconciliations of these non-GAAP financial measures in the earnings release included in its Form 8-K filed with the Securities and Exchange Commission on May 7, 2024.
2
Why Invest With BFS
Builders FirstSource is
the largest U.S. supplier of building products, prefabricated components, and value-added services to the professional builder for new residential construction and repair and remodeling.
Industry Leader. Differentiated position in fragmented market with growing portfolio of value-added products and solutions across diverse geographies and end markets nationwide
Focusing on Innovation. Investing in value-added solutions and operational excellence to solve customer pain points such as labor availability and jobsite productivity, while fueling our profitable growth
Accelerating Digital Adoption and Scale. Our Digital Tools are driving greater efficiency across homebuilding, enhancing our product offerings, and creating value for customers
Strong Financial Position. Fortress balance sheet, low net leverage profile, cost/operating discipline, and exceptional cash flow generation provide us with the strength and flexibility to create value over the long term
Compounding Shareholder Value. Disciplined capital allocation approach with a focus on investing in the business, accretive bolt-onacquisitions, and returning cash to shareholders through share repurchases driven by strong cash flow generation
3
Builders FirstSource Snapshot (NYSE: BLDR)
KEY STATS
Irving, TX | ~$20.6B | >28K | $17.1B |
Headquarters | Market-Cap1 | Employees | Net Sales |
~53%
NATIONAL REACH. LOCAL EXPERTISE.
$2.9B $1.9B
Adj. EBITDA2 | FCF2 |
Value-Added
Product Mix23%
28%
Product | 2023 Net Sales |
Category | Breakdown |
24%
25%
Specialty Building Products & Services
Lumber & Lumber Sheet Goods
Manufactured Products
Windows, Doors & Millwork
17% | ||
14% | End | |
Market | ||
69% | ||
Single-Family
Multi-Family
Repair & Remodel / Other
~570 | 90 | 48 |
Locations | of Top 100 | of Top 50 |
(>280 Value-Added | MSAs Served | MSAs Served |
Product Operations3) |
Locations: |
Truss |
Millwork |
Yard |
43
States
Served
Largest U.S. Supplier of Building Products, Prefabricated Components,
and Value-Added Services to the Professional Builder
1 Source: FactSet as of 12/29/2023.
2 | Adjusted EBITDA and Free Cash Flow (or FCF) are non-GAAP financial measures. Please see the appendix hereto for reconciliations to their most closely related GAAP financial measures. | 4 |
3 | Includes components (truss & wall panel) and millwork operations. As disclosed at Investor Day on 12/5/23. |
Builders FirstSource - What We Do
Trusses
S | |||
p | |||
e | Siding, Exterior Trim, & Other Products | ||
ci | |||
al | |||
t | |||
y | |||
B |
Wall Panels
Engineered Wood
Manuf
a
c
t
u
d | |
e | |
r |
s | |
t | |
c | |
u | |
d | |
o | |
r | |
P | 28% |
u | |||||
i | |||||
l | |||||
d | |||||
i | |||||
n | |||||
g | |||||
P | |||||
r | |||||
23% | o | Professional Install, Design | |||
d | |||||
u | Assistance, & Other Services | ||||
c | |||||
t | |||||
s | |||||
/ | |||||
S | |||||
e | |||||
r | |||||
v | |||||
i | |||||
c | Digital Solutions | ||||
e | |||||
53% | s | ||||
Interior and | |||||
Exterior Doors | W | ||||
i | |||||
n | |||||
d | |||||
o | 25% | ||||
s | |||||
Windows | w | ||||
, | |||||
D | |||||
o | |||||
o | |||||
r | |||||
s | |||||
& | |||||
M | |||||
i | |||||
l | |||||
l | |||||
Millwork | w | ||||
(Interior Trim & Custom Features)
Value-Added Product Mix
ork
24% | m | b | ||||||
u | ||||||||
L | ||||||||
& | ||||||||
r | ||||||||
e | ||||||||
b | ||||||||
m | ||||||||
u | ||||||||
L |
e
r
S
h
s | |
d | |
o | |
o | |
G | |
t | |
e | e |
Dimensional Lumber
Oriented Strand Board (OSB)
Plywood
Note: FY 2023 product mix as disclosed on Q4 2023 earnings call on 2/22/24.
5
Advantages of Manufactured Products
Manufactured Products
Why Frame with Components?
Benefits of Framing
- Floor and Roof Trusses
- Wall Panels
- Engineered Wood Products
- READY-FRAME® - Optimized Framing Solutions
Better
Faster
Safer
Lower Waste
- Computerized designs reduce mistakes and optimize material usage, leading to lower costs
- Components are pre-cut and/or assembled, saving labor and time
- Less cutting on the job reduces injury risk for a safer and cleaner jobsite
- Put less in the dumpster
- Reduce disposal fees
- Cleaner site
with Components vs. Traditional Stick Framing
~223.4
Hours Saved1
~25%
Less Wood Used1
~220K
Tons of CO2e Avoided2
1 Data from Structural Building Components Association (SBCA) bestwaytoframe.com. Benefits when two identical homes are built side by side.
2 Calculation includes roof and floor trusses, wood panels, and READY-FRAME®. | 6 |
Company History -
Respect the Past, Embrace the Future
Successfully | Builders FirstSource | BFS and BMC | Acquired WTS | |
Builders' Supply | acquired ProBuild, | merge, creating nation's | Paradigm, a software | |
navigated | ||||
creating a national | premier supplier of building | solutions and services | ||
& Lumber Co. | Great Recession | professional dealer with | materials and services, | provider for the building |
acquired by | and housing market | ~400 locations across | operating ~550 locations | products industry - major |
JLL Partners | collapse | 40 states | across 40 states | step in digital journey |
1998 | 2008 - 2011 | JUL 2015 | JAN 2021 | AUG 2021 |
Added to S&P 500,
- significant achievement reflecting our growth and position as the industry leader for building products
DEC 2023
2005 | 2012 | DEC 2015 | JULY 2021 | SINCE 2021 |
Commenced | Exceeded $1B in | Stock Building Supply | Completed listing | INVESTOR DAY |
IPO of Builders | revenues for first time | completed merger with BMC, | transfer to NYSE | 14 Tuck-in Acquisitions1 |
FirstSource on Nasdaq | in 5 years | to form BMC Stock Holdings | to further expand national | |
reach and capabilities |
Continuing to Take Transformative Actions to Accelerate Our Lead
1 As of 12/31/23 | 7 |
We Continue to Transform the Homebuilding Industry
Key Accomplishments Since the 2021 Merger
- Delivered organic sales growth and margin expansion
- Drove strong M&A execution and track record
- Accelerated digital transformation
Transformative Actions Underway
- Diversifying value-added products and services
- Evolving and improving product mix with a focus on digital tools and capabilities
- Investing in manufacturing automation ($130M1 since 2020) to drive operational excellence and address labor challenges
Continued Leadership Focus
- Exceptional leadership team with an average of >30 years field leadership experience, providing deep bench strength
- Foster commercial and operational excellence
- Drive continued growth of value-added solutions, driving sustained double-digit Adjusted EBITDA margins with less reliance on lumber
- Maintain fortress balance sheet and compound value through disciplined capital allocation
Consistent and Clear Strategy to Compound Shareholder Value
1 As disclosed at Investor Day on 12/5/23 | |
* Non-GAAP financial measures; see Appendix for reconciliations to the most directly comparable GAAP financial measures. | 8 |
Well-Positioned for Above-Market Growth in the Future
$17.1B BLDR 2023 Revenue1
Total Addressable Market ( | % BLDR Share) | Positive Momentum and Clear | ||||
Path Toward Additional Gains | ||||||
Driven by | ||||||
1 | Growing share with | |||||
~11% | existing customers | |||||
~$110B | ~1% | |||||
~2% | ||||||
Single-Family2 | ~$140B | ~$175B | 2 | Expanding product offerings | ||
Multi- | ||||||
U.S. New Construction | R&R4 | |||||
Family3 | ||||||
Building Materials | ||||||
3 | Increasing value-added products | |||||
4 | Capturing market share in | |||||
under-penetrated geographies | ||||||
69% 2023 Revenue | 14% | 13% | 5 | Delivering our digital solutions | ||
2023 Revenue | 2023 Revenue | |||||
1 | Percent of 2023 Revenue will not foot to 100% for Single-Family,Multi-Family and R&R because Other (4%) is not included. | |
2 | Source: TAM generated using U.S. Census, Dodge, HIRI, and Company estimates of all building materials and not just the products that we sell; ~$134k assumed materials cost per home | |
based on Company estimates as of November 2023. Share is based on TTM September 2023 Company sales. | 9 | |
3 | Source: DODGE; TTM estimate as of November 2023. 4 Source: HIRI estimate for Professional Repair & Remodel; TTM estimate as of November 2023. |
Long-Term Housing Tailwinds Remain Intact
Housing Starts (000s)
4,000
Housing Starts
Cumulative Underbuilt Homes
YoY Growth in Households (000s)
Underlying fundamentals for demand support
continued housing growth
3,500 | |
3,000 | Underbuilt by ~1.7M - 3.7M |
2,500 | Homes Since 2010 |
2,000 | |
1,500 | |
1,000 | |
500 |
0
2,550
2,150
1,750
1,350
950
550
150
(250)
20-year Average
2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
Annual Average Rate on 30-yearFixed-Rate Mortgages1 (%)
10.0
9.0
8.0
7.0 | 25-year Average 5.3% |
6.0 |
5.0
4.0
3.0
2.0
1.0
1 | |||||||||||||||||||||||||
1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
Demographic and Economic Factors
- Homes have been underbuilt by ~1.7M - 3.7M since 2010, creating a long-term tailwind
- Current interest rates are elevated relative to historical averages, delaying household formation
- Existing home inventory for sale is at a historic low, driving home buyers to new build
- Strong case for housing to have room to run if we can be more efficient as an industry
Source: U.S. Census, Freddie Mac, MortgageNewsDaily, Evercore ISI Research, management estimates. | |
1 As of 4/3/2024 the 30YR FRM was 7.07% sourced from MortgageNewsDaily.com. | 10 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Builders FirstSource Inc. published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2024 15:23:02 UTC.