Builders Firstsource (BLDR) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $3.82 million, or $ 0.03 a share in the quarter, against a net loss of $16.98 million, or $0.15 a share in the last year period. On an adjusted basis, net profit for the quarter stood at $12.10 million, or $0.11 a share compared with a net loss of $14.20 million, or $0.11 a share in the last year period. 

Revenue during the quarter grew 9.73 percent to $1,533.06 million from $1,397.11 million in the previous year period. Gross margin for the quarter contracted 50 basis points over the previous year period to 24.53 percent. Total expenses were 97.37 percent of quarterly revenues, down from 98.37 percent for the same period last year. This has led to an improvement of 100 basis points in operating margin to 2.63 percent.

Operating income for the quarter was $40.28 million, compared with $22.78 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $76.10 million compared with $61.80 million in the prior year period. At the same time, adjusted EBITDA margin improved 54 basis points in the quarter to 4.96 percent from 4.42 percent in the last year period.  

Commenting on the first quarter 2017 results, chief executive officer Floyd Sherman remarked, "I am pleased to report that we had a strong start to the year relative to the growth in single family starts. Excluding closed locations, we grew sales in the quarter by 10.2 percent, including commodity inflation driven sales growth of 4.1 percent. From a sales volume perspective, we grew 7.2 percent in single family new residential sales versus a 5.9 percent increase in single family starts as reported by the US Census Bureau. Our quarterly sales volume growth in the repair and remodeling end market was 6.4 percent. Additionally, our investments in manufacturing capacity are driving returns, with sales of our manufactured products growing 15.1 percent over the first quarter of 2016. We continue to increase our focus and allocate resources toward market share expansion and growing sales of higher margin value-added products across our national network."

The company has spent $9.33 million cash to meet investing activities during the quarter as against cash outgo of $8.59 million in the last year period. It has incurred capital expenditure of $9.33 million on net basis during the quarter, up 8.63 percent or $0.74 million from year ago period.

Cash flow from financing activities was $135.84 million for the quarter as against cash outgo of $9.45 million in the last year period.

Cash and cash equivalents stood at $4.52 million as on Mar. 31, 2017, up 21.11 percent or $0.79 million from $3.73 million on Mar. 31, 2016.

Working capital increases sharply
Builders Firstsource has recorded an increase in the working capital over the last year. It stood at $623.72 million as at Mar. 31, 2017, up 36.43 percent or $166.56 million from $457.16 million on Mar. 31, 2016. Current ratio was at 1.88 as on Mar. 31, 2017, up from 1.62 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 28 days for the quarter from 50 days for the last year period. Days sales outstanding went down to 37 days for the quarter compared with 39 days for the same period last year.

Days inventory outstanding has decreased to 24 days for the quarter compared with 46 days for the previous year period. At the same time, days payable outstanding went down to 32 days for the quarter from 35 for the same period last year.