Builders FirstSource, Inc. (BLDR) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $125.47 million, or $ 1.10 a share in the quarter, against a net loss of $8.76 million, or $0.08 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $69.20 million, or $0.61 a share compared with $34.80 million or $0.31 a share, a year ago.

Revenue during the quarter surged 36.82 percent to $1,745.96 million from $1,276.06 million in the previous year period. Gross margin for the quarter contracted 42 basis points over the previous year period to 25.03 percent. Total expenses were 95.06 percent of quarterly revenues, down from 97 percent for the same period last year. This has led to an improvement of 194 basis points in operating margin to 4.94 percent.

Operating income for the quarter was $86.26 million, compared with $38.24 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $118.30 million compared with $116 million in the prior year period. At the same time, adjusted EBITDA margin contracted 231 basis points in the quarter to 6.78 percent from 9.09 percent in the last year period.

Commenting on the quarterly results, Builders FirstSource chief executive officer Floyd Sherman remarked, "We grew sales by 3 percent in the quarter and are executing against our strategic initiatives. Integration efforts continue to progress as expected, creating approximately $20 million in savings in the quarter and almost $60 million year to date, before one time cost to implement. This is compared to the total national housing start decline year over year of 2 percent (comprised of 2 percent growth in single family starts and 9 percent contraction in multi-family starts). We also increased sales in the repair and remodeling end market by 3 percent. In addition, sales in our value-added categories of prefabricated components, windows, doors, and millwork grew 4 percent versus Pro Forma 2015."

The company has spent $35.28 million cash to meet investing activities during the nine month period as against cash outgo of $1,491.02 million in the last year period. It has incurred net capital expenditure of $31.31 million on net basis during the nine month period, up 20.87 percent or $5.41 million from year ago period.

Cash flow from financing activities was $14.16 million for the nine month period, down 99.03 percent or $1,441.51 million, when compared with the last year period.

Cash and cash equivalents stood at $5.85 million as on Sep. 30, 2016, down 94.22 percent or $95.34 million from $101.18 million on Sep. 30, 2015.

Working capital increases

Builders FirstSource, Inc. has recorded an increase in the working capital over the last year. It stood at $570.46 million as at Sep. 30, 2016, up 10.40 percent or $53.74 million from $516.73 million on Sep. 30, 2015. Current ratio was at 1.75 as on Sep. 30, 2016, up from 1.63 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 24 days for the quarter from 38 days for the last year period. Days sales outstanding went down to 24 days for the quarter compared with 32 days for the same period last year.

Days inventory outstanding has decreased to 20 days for the quarter compared with 31 days for the previous year period. At the same time, days payable outstanding went down to 20 days for the quarter from 26 for the same period last year.