Friday, October 22, 2010

Builders FirstSource posts $20.5 million loss

Sales slip 4.5% for Dallas-based building materials supplier

Sales for Dallas-based Builders FirstSource slipped 4.5% to $180.4 million in the third quarter, the company reported today. Builders FirstSource also reported a net loss of $20.5 million, or 22 cents per share.

Builders FirstSource is a supplier and manufacturer of building materials for the residential construction market, which continues to experience difficult conditions nationwide. U.S. housing starts fell 14% in the third quarter compared to the third quarter of 2009, and were down by the same amount in the South region, which encompasses Builders FirstSource’s entire geographic footprint.

"Despite the decline in building activity, our sales of $180.4 million were down just 4.5 percent from sales of $188.9 million in the third quarter of 2009,” Builders FirstSource CEO Floyd Sherman said in a statement announcing the results.

Sherman also noted that while pricing in commodity markets has stabilized, Builders FirstSource continues to experience the same competitive pricing pressures that have existed for the last few years. He said current-quarter gross margins declined 1.2 percentage points compared to the third quarter of 2009, although margins improved 1.4 percentage points compared to the second quarter of 2010. He said the company remains focused on cost-containment initiatives, pointing to the temporary idling of four manufacturing facilities in the third quarter—two in Maryland and two in Florida—and two distribution centers—both in South Carolina—in order to reduce operating expenses and excess capacity.

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