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liI

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                

Commission File Number 001-40620

 

BUILDERS FIRSTSOURCE, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

52-2084569

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

2001 Bryan Street, Suite 1600

 

 

Dallas, Texas

 

75201

(Address of principal executive offices)

 

(Zip Code)

(214880-3500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, par value $0.01 per share

BLDR

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

Small reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes      No  

The number of shares of the issuer’s common stock, par value $0.01, outstanding as of November 2, 2021 was 191,501,088.

 

 

 

 

 

 


 

 

BUILDERS FIRSTSOURCE, INC.

Index to Form 10-Q

 

 

 

 

 

Page

 

 

PART I — FINANCIAL INFORMATION

 

3

Item 1.

 

Financial Statements

 

3

 

 

Condensed Consolidated Statement of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020

 

3

 

 

Condensed Consolidated Balance Sheet (Unaudited) as of September 30, 2021 and December 31, 2020

 

4

 

 

Condensed Consolidated Statement of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2021 and 2020

 

5

 

 

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020

 

6

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

7

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

29

Item 4.

 

Controls and Procedures

 

30

 

 

PART II — OTHER INFORMATION

 

31

Item 1.

 

Legal Proceedings

 

31

Item 1A.

 

Risk Factors

 

31

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

31

Item 6.

 

Exhibits

 

32

 

 

 

2


 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements (unaudited)

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

(in thousands, except per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net sales

 

$

5,508,590

 

 

$

2,295,450

 

 

$

15,259,047

 

 

$

6,028,114

 

Cost of sales

 

 

3,796,138

 

 

 

1,724,799

 

 

 

10,893,890

 

 

 

4,474,718

 

Gross margin

 

 

1,712,452

 

 

 

570,651

 

 

 

4,365,157

 

 

 

1,553,396

 

Selling, general and administrative expenses

 

 

875,012

 

 

 

430,893

 

 

 

2,599,523

 

 

 

1,223,436

 

Income from operations

 

 

837,440

 

 

 

139,758

 

 

 

1,765,634

 

 

 

329,960

 

Interest expense, net

 

 

35,954

 

 

 

28,043

 

 

 

95,593

 

 

 

106,786

 

Income before income taxes

 

 

801,486

 

 

 

111,715

 

 

 

1,670,041

 

 

 

223,174

 

Income tax expense

 

 

188,341

 

 

 

25,783

 

 

 

387,081

 

 

 

49,551

 

Net income

 

$

613,145

 

 

$

85,932

 

 

$

1,282,960

 

 

$

173,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.00

 

 

$

0.74

 

 

$

6.23

 

 

$

1.49

 

Diluted

 

$

2.98

 

 

$

0.73

 

 

$

6.18

 

 

$

1.48

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

204,268

 

 

 

116,731

 

 

 

205,976

 

 

 

116,542

 

Diluted

 

 

205,630

 

 

 

118,026

 

 

 

207,513

 

 

 

117,690

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

3


 

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

 

(in thousands, except per share amounts)

 

September 30,

2021

 

 

December 31,

2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

224,735

 

 

$

423,806

 

Accounts receivable, less allowances of $38,627 and $17,637 at September 30, 2021 and December 31, 2020, respectively

 

 

2,134,269

 

 

 

880,018

 

Other receivables

 

 

167,309

 

 

 

76,436

 

Inventories, net

 

 

1,616,553

 

 

 

784,527

 

Other current assets

 

 

88,368

 

 

 

58,895

 

Total current assets

 

 

4,231,234

 

 

 

2,223,682

 

Property, plant and equipment, net

 

 

1,336,890

 

 

 

749,130

 

Operating lease right-of-use assets, net

 

 

444,073

 

 

 

274,562

 

Goodwill

 

 

3,141,594

 

 

 

785,305

 

Intangible assets, net

 

 

1,629,363

 

 

 

119,882

 

Other assets, net

 

 

25,994

 

 

 

21,110

 

Total assets

 

$

10,809,148

 

 

$

4,173,671

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,004,521

 

 

$

600,357

 

Accrued liabilities

 

 

930,189

 

 

 

385,536

 

Current portion of operating lease liabilities

 

 

94,651

 

 

 

61,625

 

Current maturities of long-term debt

 

 

3,819

 

 

 

27,335

 

Total current liabilities

 

 

2,033,180

 

 

 

1,074,853

 

Noncurrent portion of operating lease liabilities

 

 

360,271

 

 

 

219,239

 

Long-term debt, net of current maturities, discounts and issuance costs

 

 

2,419,664

 

 

 

1,596,905

 

Deferred income taxes

 

 

330,998

 

 

 

49,495

 

Other long-term liabilities

 

 

141,609

 

 

 

80,396

 

Total liabilities

 

 

5,285,722

 

 

 

3,020,888

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 10,000 shares authorized; zero shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.01 par value, 300,000 shares authorized; 196,288 and 116,829 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

 

1,963

 

 

 

1,168

 

Additional paid-in capital

 

 

4,254,262

 

 

 

589,241

 

Retained earnings

 

 

1,267,201

 

 

 

562,374

 

Total stockholders' equity

 

 

5,523,426

 

 

 

1,152,783

 

Total liabilities and stockholders' equity

 

$

10,809,148

 

 

$

4,173,671

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

4


 

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

 

 

Nine Months Ended

September 30,

 

(in thousands)

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

1,282,960

 

 

$

173,623

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

401,500

 

 

 

87,298

 

Deferred income taxes

 

 

(65,696

)

 

 

3,155

 

Stock-based compensation expense

 

 

25,288

 

 

 

12,098

 

Net gain on sale of assets

 

 

(32,235

)

 

 

(1,413

)

Other non-cash adjustments

 

 

4,805

 

 

 

7,884

 

Changes in assets and liabilities, net of assets acquired and liabilities assumed:

 

 

 

 

 

 

 

 

Receivables

 

 

(756,511

)

 

 

(230,627

)

Inventories

 

 

(321,068

)

 

 

(189,692

)

Other current assets

 

 

5,491

 

 

 

(5,076

)

Other assets and liabilities

 

 

16,653

 

 

 

60,439

 

Accounts payable

 

 

103,006

 

 

 

205,570

 

Accrued liabilities

 

 

239,024

 

 

 

31,887

 

Net cash provided by operating activities

 

 

903,217

 

 

 

155,146

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash used for acquisitions, net of cash acquired

 

 

(898,113

)

 

 

(15,893

)

Proceeds from divestiture of business

 

 

76,162

 

 

 

 

Purchases of property, plant and equipment

 

 

(160,179

)

 

 

(83,508

)

Proceeds from sale of property, plant and equipment

 

 

11,728

 

 

 

3,298

 

Net cash used in investing activities

 

 

(970,402

)

 

 

(96,103

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Borrowings under revolving credit facility

 

 

2,420,000

 

 

 

791,000

 

Repayments under revolving credit facility

 

 

(2,495,000

)

 

 

(818,000

)

Proceeds from long-term debt and other loans

 

 

1,000,000

 

 

 

895,625

 

Repayments of long-term debt and other loans

 

 

(471,360

)

 

 

(561,541

)

Payments of debt extinguishment costs

 

 

(2,475

)

 

 

(22,686

)

Payments of loan costs

 

 

(17,970

)

 

 

(13,800

)

Exercise of stock options

 

 

537

 

 

 

1,343

 

Repurchase of common stock

 

 

(565,618

)

 

 

(4,153

)

Net cash (used in) provided by financing activities

 

 

(131,886

)

 

 

267,788

 

Net change in cash and cash equivalents

 

 

(199,071

)

 

 

326,831

 

Cash and cash equivalents at beginning of period

 

 

423,806

 

 

 

14,096

 

Cash and cash equivalents at end of period

 

$

224,735

 

 

$

340,927

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

75,531

 

 

$

77,734

 

Cash paid for income taxes

 

 

414,515

 

 

 

21,280

 

Supplemental disclosures of non-cash activities:

 

 

 

 

 

 

 

 

Non-cash consideration for the BMC Merger

 

$

3,658,362

 

 

$

 

Accrued purchases of property, plant and equipment

 

 

13,164

 

 

 

1,336

 

Right-of-use assets obtained in exchange for operating lease obligations

 

 

49,135

 

 

 

33,379

 

Assets acquired under finance lease obligations

 

 

1,644

 

 

 

16,096

 

Amounts accrued for repurchases of common stock

 

 

30,756

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

 

 

 

(in thousands)

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Total

 

Balance at December 31, 2019

 

 

116,052

 

 

$

1,161

 

 

$

574,955

 

 

$

248,837

 

 

$

824,953

 

Vesting of restricted stock units

 

 

579

 

 

 

6

 

 

 

(6

)

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

3,254

 

 

 

 

 

3,254

 

Exercise of stock options

 

 

82

 

 

 

 

 

398

 

 

 

 

 

398

 

Shares withheld for restricted stock units vested

 

 

(168

)

 

 

(2

)

 

 

(3,832

)

 

 

 

 

(3,834

)

Net income

 

 

 

 

 

 

 

 

8,767

 

 

 

8,767

 

Balance at March 31, 2020

 

 

116,545

 

 

 

1,165

 

 

 

574,769

 

 

 

257,604

 

 

 

833,538

 

Vesting of restricted stock units

 

 

130

 

 

 

2

 

 

 

(2

)

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

3,466

 

 

 

 

 

3,466

 

Exercise of stock options

 

 

48

 

 

 

 

 

325

 

 

 

 

 

325

 

Shares withheld for restricted stock units vested

 

 

(22

)

 

 

 

 

(319

)

 

 

 

 

(319

)

Net income

 

 

 

 

 

 

 

 

78,924

 

 

 

78,924

 

Balance at June 30, 2020

 

 

116,701

 

 

$

1,167

 

 

$

578,239

 

 

$

336,528

 

 

$

915,934

 

Vesting of restricted stock units

 

 

13

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,379

 

 

 

 

 

 

5,379

 

Exercise of stock options

 

 

89

 

 

 

1

 

 

 

619

 

 

 

 

 

 

620

 

Net income

 

 

 

 

 

 

 

 

 

 

 

85,932

 

 

 

85,932

 

Balance at September 30, 2020

 

 

116,803

 

 

$

1,168

 

 

$

584,237

 

 

$

422,460

 

 

$

1,007,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

116,829

 

 

$

1,168

 

 

$

589,241

 

 

$

562,374

 

 

$

1,152,783

 

Merger consideration

 

 

89,586

 

 

 

896

 

 

 

3,657,466

 

 

 

 

 

3,658,362

 

Vesting of restricted stock units

 

 

648

 

 

 

6

 

 

 

(6

)

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

10,402

 

 

 

 

 

10,402

 

Exercise of stock options

 

 

27

 

 

 

1

 

 

 

234

 

 

 

 

 

235

 

Shares withheld for restricted stock units vested

 

 

(232

)

 

 

(2

)

 

 

(10,415

)

 

 

 

 

(10,417

)

Net income

 

 

 

 

 

 

 

 

172,580

 

 

 

172,580

 

Balance at March 31, 2021

 

 

206,858

 

 

 

2,069

 

 

 

4,246,922

 

 

 

734,954

 

 

 

4,983,945

 

Vesting of restricted stock units

 

 

472

 

 

 

5

 

 

 

(5

)

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

8,465

 

 

 

 

 

8,465

 

Exercise of stock options

 

 

16

 

 

 

 

 

 

99

 

 

 

 

 

99

 

Shares withheld for restricted stock units vested

 

 

(150

)

 

 

(2

)

 

 

(7,287

)

 

 

 

 

(7,289

)

Net income

 

 

 

 

 

 

 

 

497,235

 

 

 

497,235

 

Balance at June 30, 2021

 

 

207,196

 

 

$

2,072

 

 

$

4,248,194

 

 

$

1,232,189

 

 

$

5,482,455

 

Vesting of restricted stock units

 

 

38

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

6,421

 

 

 

 

 

6,421

 

Repurchase of common stock (1)

 

 

(10,958

)

 

 

(109

)

 

 

 

 

 

(578,133

)

 

 

(578,242

)

Exercise of stock options

 

 

22

 

 

 

 

 

 

202

 

 

 

 

 

202

 

Shares withheld for restricted stock units vested

 

 

(10

)

 

 

 

 

 

(555

)

 

 

 

 

(555

)

Net income

 

 

 

 

 

 

 

 

613,145

 

 

 

613,145

 

Balance at September 30, 2021

 

 

196,288

 

 

$

1,963

 

 

$

4,254,262

 

 

$

1,267,201

 

 

$

5,523,426

 

 

 

(1)

During the three and nine months ended September 30, 2021 we repurchased and retired 10,958,400 shares of our common stock at an average price of $52.74 per share for $578.2 million, net of fees, pursuant to the repurchase program authorized by our board of directors in August 2021. 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6


 

 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

1. Basis of Presentation

Builders FirstSource, Inc., a Delaware corporation formed in 1998, is a leading supplier and manufacturer of building materials, manufactured components and construction services to professional homebuilders, sub-contractors, remodelers and consumers. The Company operates approximately 550 locations in 39 states across the United States. In this quarterly report, references to the “Company,” “we,” “our,” “ours” or “us” refer to Builders FirstSource, Inc. and its consolidated subsidiaries unless otherwise stated or the context otherwise requires.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. Intercompany transactions are eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2020 is derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. This condensed consolidated balance sheet as of December 31, 2020 and the unaudited condensed consolidated financial statements included herein should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2020 included in our most recent annual report on Form 10-K, as amended (“Form 10-K”). Accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the Notes to Consolidated Financial Statements included in our Form 10-K.

Segments

We offer an integrated solution to our customers by providing manufacturing, supply, and installation of a full range of structural and related building products directly to homebuilder customers. We manufacture floor trusses, roof trusses, wall panels, stairs, millwork, windows, and doors. We also provide a full range of construction services. These product and service offerings are distributed across our approximately 550 locations operating in 39 states across the United States. Following the merger with BMC Stock Holdings, Inc. on January 1, 2021, which is discussed in Note 2 to these condensed consolidated financial statements, the Company reorganized the structure of its internal organization.

Given the span and depth of our geographical reach, our locations are organized into three geographical divisions (East, Central, and West), which are also our operating segments. Our operating divisions are organized on a geographical basis to facilitate a disaggregated management of the Company and to respond to the local needs of the customers in the markets we serve. All of our segments have similar customers, products and services, and distribution methods.

Due to these similarities, along with the similar economic profitability achieved across all our operating segments, we aggregate our three operating segments into one reportable segment. Centralized financial and operational oversight, including resource allocation and assessment of performance on an income before income taxes basis, is performed by our CEO, whom we have determined to be our chief operating decision maker (“CODM”).

The accounting policies of our operating segments are consistent with the accounting policies described in the Notes to Consolidated Financial Statements included in our Form 10-K. Since the Company operates in one reportable segment, the primary measures reviewed by the CODM, including revenue, gross margin and income before income taxes, are shown in these condensed consolidated financial statements.

Business Combinations

When they meet the requirements under ASC 805, Business Combinations, merger and acquisition transactions are accounted for using the acquisition method, and accordingly the results of operations of the acquiree are included in the Company’s consolidated financial statements from the acquisition date. The consideration transferred is allocated to the identifiable assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with any excess recorded as goodwill. Transaction-related costs are expensed in the period the costs are incurred. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding adjustment to goodwill.

7


 

Comprehensive Income

Comprehensive income is equal to the net income for all periods presented.

Reclassifications

Certain prior periods’ amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on net income, total assets and liabilities, stockholders’ equity, or cash flows as previously reported.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The purpose of ASU 2020-04 is to provide optional guidance for a period of time related to accounting for reference rate reform on financial reporting. It is intended to reduce the potential burden of reviewing contract modifications related to discontinued rates. The amendments and expedients in this update are effective, as elected, beginning March 12, 2020 through December 31, 2022 and may be elected by topic. We have yet to elect adoption and the adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In December 2019, the FASB issued an update to existing guidance under the Income Taxes topic of the FASB Accounting Standards Codification (“Codification”). This updated guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles in the Income Taxes topic. This guidance is effective for public companies annual and interim periods beginning after December 15, 2020 with early adoption permitted. The adoption of this guidance did not have a material impact on our consolidated financial statements.

2. Business Combinations and Dispositions

On January 1, 2021, we completed our previously announced all stock merger transaction with BMC Stock Holdings, Inc., a Delaware corporation (“BMC”), pursuant to the Agreement and Plan of Merger, dated as of August 26, 2020 (as amended, restated, supplemented, or otherwise modified from time to time, the “Merger Agreement”), by and among Builders FirstSource, Inc., Boston Merger Sub I Inc., a Delaware corporation and direct wholly owned subsidiary of Builders FirstSource, Inc. (“Merger Sub”) and BMC. On the terms and subject to the conditions set forth in the Merger Agreement, on January 1, 2021, Merger Sub merged with and into BMC, with BMC continuing as the surviving corporation and a wholly owned subsidiary of Builders FirstSource, Inc. (the “BMC Merger”). The BMC Merger expands the Company’s geographic reach and value-added offerings.

The BMC Merger was accounted for by the acquisition method, and accordingly the results of operations have been included in the Company’s consolidated financial statements from the acquisition date. Net sales and income before income taxes attributable to BMC were $1.8 billion and $