Builders FirstSource, Inc.

Previous wording

Statements in this report and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance, industry and business outlook or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. 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. 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. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 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; such risks or uncertainties include those related to the Company’s growth strategies, including acquisitions, organic growth and digital strategies, or the dependence of the Company’s revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, consumer confidence, labor and supply shortages, and also lumber and other commodity prices, which may be impacted by changes in tariffs. The Company may not succeed in addressing these and other risks. Further information regarding the risk factors that could affect our financial and other results can be found in the risk factors section of the Company’s 2024 Form 10-K filed with the Securities and Exchange Commission. Consequently, all forward-looking statements in this report are qualified by the factors, risks and uncertainties contained therein.

Current wording

Statements in this report and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance, industry and business outlook or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. 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. 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. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 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; such risks or uncertainties include those related to the Company’s growth strategies, including acquisitions, organic growth and digital and technology strategies, or the dependence of the Company’s revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, home size and affordability, consumer confidence, labor and supply shortages, and also lumber and other commodity prices, which may be impacted by changes in tariffs. The Company may not succeed in addressing these and other risks. Further information regarding the risk factors that could affect our financial and other results can be found in the risk factors section of the Company’s 2024 Form 10-K filed with the Securities and Exchange Commission. Consequently, all forward-looking statements in this report are qualified by the factors, risks and uncertainties contained therein.

Previous wording

We are a leading supplier and manufacturer of building materials, manufactured components and construction services to professional contractors, sub-contractors and consumers. The Company operates approximately 595 locations in 43 states across the United States, which are internally organized into geographic operating divisions. Due to the similar economic characteristics, categories of products, distribution methods and customers, our operating divisions are aggregated into one reportable segment.

Current wording

We are a leading supplier and manufacturer of building materials, manufactured components and construction services to professional contractors, sub-contractors and consumers. The Company operates approximately 585 locations in 43 states across the United States, which are internally organized into geographic operating divisions. Due to the similar economic characteristics, categories of products, distribution methods and customers, our operating divisions are aggregated into one reportable segment.

Previous wording

Through March 31, 2025, we have completed the acquisitions of Alpine Lumber and Cluss Lumber for an aggregate purchase price of approximately $828.0 million, net of cash acquired. Among other opportunities, these acquisitions further expand our market footprint and provide additional operations in our value-added product categories. These transactions are described in further detail in Note 2 to the condensed consolidated financial statements included in Item 1 of this quarterly report on Form 10-Q.

Current wording

Through June 30, 2025, we have completed the acquisitions of Alpine Lumber, Cluss Lumber and Truckee Tahoe for an aggregate purchase price of approximately $891.9 million, net of cash acquired. Among other opportunities, these acquisitions further expand our market footprint and provide additional operations in our value-added product categories and allow us to better serve our customers in these markets. These transactions are described in further detail in Note 2 to the condensed consolidated financial statements included in Item 1 of this quarterly report on Form 10-Q.

Previous wording

Directors authorized the repurchase of up to $500.0 million of the Company’s outstanding shares of common stock, inclusive of the approximately $100.0 million remaining under its prior $1.0 billion share repurchase authorization announced in August 2024.

Current wording

On April 30, 2025, the Company’s board of directors authorized a new repurchase plan of up to $500.0 million of the Company’s outstanding shares of common stock. The new repurchase plan replaced the Company’s prior $1.0 billion share repurchase authorization announced in August 2024, which had approximately $100.0 million remaining under its authorization.

Previous wording

During the three months ended March 31, 2025, the Company repurchased 0.1 million shares at a weighted average price of $131.51 per share, inclusive of applicable fees and taxes, for a total cost of $12.8 million. Subsequent to March 31, 2025, the Company repurchased an additional 3.3 million shares at a weighted average price of $118.27 per share, inclusive of applicable fees and taxes, for a total cost of $390.9 million under the August 2024 authorization. On April 30, 2025, the Company’s Board of

Current wording

During the six months ended June 30, 2025, the Company repurchased 3.4 million shares at a weighted average price of $118.65 per share, for a total cost of $403.6 million, inclusive of applicable fees and taxes.

Previous wording

According to the U.S. Census Bureau, actual U.S. total housing starts were 0.3 million for thefirst quarter of 2025, a decrease of 1.6% compared to the first quarter of 2024. Actual U.S. single-family starts for the first quarter of 2025 were 0.2 million, a decrease of 5.7% compared to the first quarter of 2024. A composite of third-party sources, including the National Association of Home Builders and John Burns Research and Consulting, are forecasting 1.4 million U.S. total housing starts and 1.0 million U.S single-family housing starts for 2025, which are decreases of 1.3% from 2024.

Current wording

According to the U.S. Census Bureau, actual U.S. total housing starts were 0.4 million for thesecond quarter of 2025, a decrease of 0.9% compared to the second quarter of 2024. Actual U.S. single-family starts for the second quarter of 2025 were 0.3 million, a decrease of 8.4% compared to the second quarter of 2024. A composite of third-party sources, including the National Association of Home Builders and John Burns Research and Consulting, are forecasting 1.3 million U.S. total housing starts and 940 thousand U.S single-family housing starts for 2025, which are decreases of 4.0% and 7.2%, respectively from 2024.

Previous wording

We believe the housing industry’s long-term outlook is positive and that it remains underbuilt due to growth in the underlying demographics compared to historical new construction levels. However, macroeconomic uncertainty, including fluctuations in interest rates, stock market volatility, impact of changes in tariffs and inflation, may continue to pressure near-term housing industry demand as homes are less affordable for consumers, investors and builders. We believe we are well-positioned to take advantage of the construction activity in our markets and to increase our market share, which may include strategic acquisitions. We will continue to focus on working capital by closely monitoring the credit exposure of our customers, remaining focused on maintaining the right level of inventory and by working with our vendors to improve payment terms. We strive to achieve the appropriate balance of short-term expense control while maintaining the expertise and capacity to grow the business as market conditions change.

Current wording

We believe the housing industry’s long-term outlook is positive and that it remains underbuilt due to growth in the underlying demographics compared to historical new construction levels. However, macroeconomic uncertainty, including fluctuations in interest rates, stock market volatility, impact of changes in tariffs and inflation, may continue to pressure near-term housing industry demand as homes are less affordable for consumers, investors and builders. We believe we are well-positioned to accelerate growth and capture market share as industry conditions improve in the long term. We will continue to focus on working capital by closely monitoring the credit exposure of our customers, maintaining the right level of inventory and by working with our vendors to improve payment terms. We strive to achieve the appropriate balance of short-term expense control while maintaining the expertise and capacity to grow the business.

Previous wording

Net Sales. Net sales for the three months ended March 31, 2025, were $3.7 billion, a 6.0% decrease over net sales of $3.9 billion for the three months ended March 31, 2024. Core organic sales decreased net sales by 8.1%, due to decreases in the multi-family and single-family customer segments, while commodity price deflation and one fewer selling day decreased net sales by another 1.0% and 1.6%, respectively. These decreases were partially offset by an increase in net sales from acquisitions of 4.7%.

Current wording

Net Sales. Net sales for the three months ended June 30, 2025, were $4.2 billion, a 5.0% decrease over net sales of $4.5 billion for the three months ended June 30, 2024. Core organic sales decreased net sales by 8.5%, primarily due to decreases in the multi-family and single-family customer segments, while commodity price deflation decreased net sales by another 1.5%. These decreases were partially offset by an increase in net sales from acquisitions of 5.0%.

Previous wording

Gross Margin. Gross margin decreased $0.2 billion to $1.1 billion. Our gross margin percentage decreased to 30.5% in the first quarter of 2025 from 33.4% in the first quarter of 2024, a 2.9% decrease. This decrease was primarily driven by single-family and multi-family margin normalization, as well as a below-normal starts environment.

Current wording

Gross Margin. Gross margin decreased $0.2 billion to $1.3 billion. Our gross margin percentage decreased to 30.7% in the second quarter of 2025 from 32.8% in the second quarter of 2024, a 2.1% decrease. This decrease was primarily driven by single-family and multi-family margin normalization, as well as a below-normal starts environment.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $4.5 million, or 0.5%, primarily due to additional operating expenses from additional locations acquired within the last twelve months and our ongoing enterprise resource planning system implementation, partially offset by lower variable compensation due to decreased sales, and lower intangible amortization.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $14.6 million, or 1.5%, primarily due to additional operating expenses from additional locations acquired within the last twelve months and our ongoing enterprise resource planning system implementation, partially offset by lower variable compensation due to decreased sales.

Previous wording

As a percentage of net sales, selling, general and administrative expenses increased to 25.4%, up from 23.8%, for the three months ended March 31, 2025 and 2024, respectively, primarily attributable to reduced operating leverage.

Current wording

As a percentage of net sales, selling, general and administrative expenses increased to 23.3%, up from 21.8%, for the three months ended June 30, 2025 and 2024, respectively, primarily attributable to reduced operating leverage.

Previous wording

Interest Expense, Net. Interest expense was $64.9 million in the first quarter of 2025, an increase of $16.6 million from the first quarter of 2024. The increase was primarily due to higher average debt balances.

Current wording

Interest Expense, Net. Interest expense was $72.0 million in the second quarter of 2025, an increase of $20.0 million from the second quarter of 2024. The increase was primarily due to higher average debt balances.

Previous wording

Income Tax Expense. We recorded income tax expense of $23.2 million and $66.5 million in the first quarters of 2025 and 2024, respectively. The decrease in the tax expense was primarily driven by a decrease in income before income taxes in the current period. Our effective tax rate was 19.4% in the first quarter of 2025, a decrease from 20.4% in the first quarter of 2024, primarily related to favorable permanent and other differences, partially offset by a lower stock-based compensation windfall benefit.

Current wording

Income Tax Expense. We recorded income tax expense of $54.3 million and $93.4 million in the second quarters of 2025 and 2024, respectively. The decrease in the tax expense was primarily driven by a decrease in income before income taxes in the current period. Our effective tax rate was 22.7% in the second quarter of 2025, an increase from 21.3% in the second quarter of 2024, primarily related to a lower stock-based compensation windfall benefit.

Previous wording

We experienced decreased net sales in our manufactured products category primarily due to continued normalization in multi-family. Our windows, doors, and millwork sales declined primarily due to price normalization. For the comparable period, specialty building products and services and lumber and lumber sheet goods sales remained relatively consistent.

Current wording

We experienced decreased net sales in our manufactured products category primarily due to continued normalization in multi-family, and decreased single-family activity due to lower housing starts. Our windows, doors, and millwork and lumber and lumber sheet goods sales declined primarily due to price normalization, and decreased single-family activity due to lower housing starts. For the comparable period, specialty building products remained relatively flat.

Previous wording

Our Revolving Facility is primarily used for working capital, general corporate purposes and funding capital expenditures and growth opportunities. In addition, we may use borrowings under the Revolving Facility to facilitate debt repayment and consolidation and to fund share repurchases. Availability under the Revolving Facility is determined by a borrowing base. Our borrowing base consists of trade accounts receivable, inventory, other receivables, and qualified cash that all meet specific criteria contained within the credit agreement, minus agent specified reserves. Net excess borrowing availability is equal to the maximum borrowing amount minus outstanding borrowings and letters of credit.

Current wording

Our Revolving Facility is primarily used for working capital, general corporate purposes and funding capital expenditures and growth opportunities. In addition, we may use borrowings under the Revolving Facility to facilitate debt repayment and consolidation, and to fund share repurchases. Availability under the Revolving Facility is determined by a borrowing base. Our borrowing base consists of accounts receivable, inventory, and qualified cash that all meet specific criteria contained within the credit agreement, minus agent specified reserves. Net excess borrowing availability is equal to the maximum borrowing amount minus outstanding borrowings and letters of credit.

Previous wording

As of March 31, 2025, we had $775.0 million outstanding borrowings under our Revolving Facility, and our net excess borrowing availability was $944.3 million after being reduced by outstanding letters of credit totaling $80.7 million. Excess availability must equal or exceed a minimum specified amount, currently $180.0 million, or we are required to meet a fixed charge coverage ratio of 1.00 to 1.00. We were not in violation of any covenants or restrictions imposed by any of our debt agreements at March 31, 2025.

Current wording

As of June 30, 2025, we had $233.0 million outstanding borrowings under our Revolving Facility, and our net excess borrowing availability was $1,538.1 million after being reduced by outstanding letters of credit totaling $79.6 million. Excess availability must equal or exceed a minimum specified amount, currently $185.1 million, or we are required to meet a fixed charge coverage ratio of 1.00 to 1.00. We were not in violation of any covenants or restrictions imposed by any of our debt agreements at June 30, 2025.

Previous wording

Our liquidity at March 31, 2025 was $1.1 billion, which consists of net borrowing availability under the Revolving Facility and cash on hand.

Current wording

Our liquidity at June 30, 2025, was $1.6 billion, which consists of net borrowing availability under the Revolving Facility and cash on hand.

Previous wording

Cash provided by operating activities was $132.3 million for the three months ended March 31, 2025, compared to cash provided by operating activities of $317.2 million for the three months ended March 31, 2024. The decrease in cash provided by operating activities was largely the result of lower net income in the first three months of 2025.

Current wording

Cash provided by operating activities was $473.4 million for the six months ended June 30, 2025, compared to cash provided by operating activities of $769.3 million for the six months ended June 30, 2024. The decrease in cash provided by operating activities was largely the result of lower net income in the first six months of 2025.

Previous wording

For the three months ended March 31, 2025, cash used in investing activities increased $761.0 million compared to the three months ended March 31, 2024, primarily due to using an additional $766.1 million of cash for acquisitions.

Current wording

For the six months ended June 30, 2025, cash used in investing activities increased $743.8 million compared to the six months ended June 30, 2024, primarily due to using an additional $752.6 million of cash for acquisitions.

Previous wording

Cash provided by financing activities was $741.5 million for the three months ended March 31, 2025, which consisted primarily of $775.0 million net borrowings on the Revolving Facility. Cash provided by financing activities was $465.2 million for the three months ended March 31, 2024, which consisted primarily of a net $987.5 million received for the issuance of the 6.375% 2034 Notes, offset by $464.0 million in net payments on the Revolving Facility.

Current wording

Cash provided by financing activities was $519.5 million for the six months ended June 30, 2025, which consisted primarily of a net $739.3 million received for the issuance of the 6.75% 2035 Notes, and $233.0 million net borrowings on the Revolving Facility, offset by $414.0 million for repurchases of common stock. Cash used in financing activities was $444.2 million for the six months ended June 30, 2024, which consisted primarily of $1.0 billion for repurchases of common stock and $365.0 million in net payments on the Revolving Facility, offset by a net $987.5 million received for the issuance of the 6.375% 2034 Notes.