Builders FirstSource (BLDR) 10-Q 2 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	31-Mar-14	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'
Entity Registrant Name	'Builders FirstSource, Inc.	'
Entity Central Index Key	'0001316835	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	97,999,694

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Sales	$345,909	$319,702
Cost of sales	270,994	257,355
Gross margin	74,915	62,347
Selling, general and administrative expenses	69,318	61,078
Facility closure costs	163	59
Income from operations	5,434	1,210
Interest expense, net	8,828	12,500
Loss from continuing operations before income taxes	-3,394	-11,290
Income tax (benefit) expense	-82	315
Loss from continuing operations	-3,312	-11,605
Loss from discontinued operations (net of income tax expense of $0 in 2014 and 2013)	-72	-203
Net loss	-3,384	-11,808
Comprehensive loss	($3,384)	($11,808)
Basic and diluted net loss per share:	'	'
Loss from continuing operations	($0.03)	($0.12)
Loss from discontinued operations	$0	$0
Net loss	($0.03)	($0.12)
Weighted average common shares outstanding:	'	'
Basic and diluted	97,617	95,989

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Income tax expense on loss from discontinued operations	$0	$0

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Current assets:	'	'
Cash and cash equivalents	$62,766	$54,696
Accounts receivable, less allowances of $3,422 and $3,605 at March 31, 2014 and December 31, 2013, respectively	147,603	143,036
Inventories	136,613	123,636
Other current assets	8,767	9,793
Total current assets	355,749	331,161
Property, plant and equipment, net	52,808	49,392
Goodwill	111,193	111,193
Other assets, net	23,050	24,093
Total assets	542,800	515,839
Current liabilities:	'	'
Accounts payable	102,668	81,046
Accrued liabilities	51,968	45,310
Current maturities of long-term debt	69	67
Total current liabilities	154,705	126,423
Long-term debt, net of current maturities	353,886	353,904
Other long-term liabilities	21,615	20,144
Total liabilities	530,206	500,471
Commitments and contingencies (Note 6)	'	'
Stockholders’ equity:	'	'
Preferred stock, $0.01 par value, 10,000 shares authorized; zero shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively	'	'
Common stock, $0.01 par value, 200,000 shares authorized; 97,970 and 97,905 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively	979	973
Additional paid-in capital	374,022	373,418
Accumulated deficit	-362,407	-359,023
Total stockholders’ equity	12,594	15,368
Total liabilities and stockholders’ equity	$542,800	$515,839

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, except Per Share data, unless otherwise specified
Allowances on trade accounts receivable	$3,422	$3,605
Preferred stock, par value	$0.01	$0.01
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$0.01	$0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	97,970	97,905
Common stock, shares outstanding	97,970	97,905

CONDENSED_CONSOLIDATED_STATEME2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:	'	'
Net loss	($3,384)	($11,808)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	'	'
Depreciation and amortization	1,982	2,774
Amortization of deferred loan costs	585	295
Amortization of debt discount	'	588
Fair value adjustment of stock warrants	1,197	426
Deferred income taxes	-48	134
Bad debt expense	-36	275
Stock compensation expense	982	1,335
Net gain on sales of assets	-1	-11
Changes in assets and liabilities:	'	'
Receivables	-4,531	-20,313
Inventories	-12,977	-23,831
Other current assets	806	1,434
Other assets and liabilities	183	-263
Accounts payable	21,622	19,472
Accrued liabilities	7,380	4,304
Net cash provided by (used in) operating activities	13,760	-25,189
Cash flows from investing activities:	'	'
Purchases of property, plant and equipment	-5,304	-981
Proceeds from sale of property, plant and equipment	2	11
Decrease in restricted cash	'	13,030
Net cash provided by (used in) investing activities	-5,302	12,060
Cash flows from financing activities:	'	'
Payments of long-term debt and other loans	-16	-14
Deferred loan costs	'	-61
Exercise of stock options	904	474
Repurchase of common stock	-1,276	-1,036
Net cash used in financing activities	-388	-637
Net change in cash and cash equivalents	8,070	-13,766
Cash and cash equivalents at beginning of period	54,696	131,432
Cash and cash equivalents at end of period	$62,766	$117,666

Basis_of_Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2014
Basis of Presentation	'
	1. Basis of Presentation
	Builders FirstSource, Inc., a Delaware corporation formed in 1998, is a leading supplier and manufacturer of structural and related building products for residential new construction in 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. All significant intercompany accounts and transactions have been eliminated in consolidation.
	The condensed consolidated balance sheet as of December 31, 2013 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, 2013 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, 2013 included in our most recent annual report on 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.

Net_Loss_per_Common_Share

Net Loss per Common Share	3 Months Ended
	Mar. 31, 2014
Net Loss per Common Share	'
	2. Net Loss per Common Share
	Net loss per common share (“EPS”) is calculated in accordance with the Earnings per Share topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), which requires the presentation of basic and diluted EPS. Basic EPS is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common shares.
	Our restricted stock shares include rights to receive dividends that are not subject to the risk of forfeiture even if the underlying restricted stock shares on which the dividends were paid do not vest. In accordance with the Earnings per Share topic of the Codification, unvested share-based payment awards that contain non-forfeitable rights to dividends are deemed participating securities and should be considered in the calculation of basic EPS. Since the restricted stock shares do not include an obligation to share in losses, they will be included in our basic EPS calculation in periods of net income and excluded from our basic EPS calculation in periods of net loss. Accordingly, there were 0.1 million and 0.7 million restricted stock shares excluded from the computations of basic EPS for the three months ended March 31, 2014 and 2013, respectively, because we generated a net loss. For the purpose of computing diluted EPS, options to purchase 6.5 million and 5.4 million shares of common stock were not included in the computations of diluted EPS for the three months ended March 31, 2014 and 2013, respectively, because their effect was anti-dilutive. Warrants to purchase 0.7 million and 1.6 million shares of common stock were not included in the computations of diluted EPS for the three months ended March 31, 2014 and 2013 because their effect was anti-dilutive.

Debt

Debt	3 Months Ended
	Mar. 31, 2014
Debt	'
	3. Debt
	Long-term debt consisted of the following (in thousands):
		March 31,				December 31,
		2014				2013
	2021 notes	$	350,000			$	350,000
	Other long-term debt		3,955				3,971
			353,955				353,971
	Less: current portion of long-term debt		69				67
	Total long-term debt, net of current maturities	$	353,886			$	353,904
	Fair Value
	The only financial instrument measured at fair value on a recurring basis was our warrants.
	The table below presents the effect of our derivative financial instrument on the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31 (in thousands):
	Derivative Not Designated		Location of Loss Recognized in Income		Amount of Loss
					Recognized in Income
	as Hedging Instrument				Three Months Ended March 31,
					2014				2013
	Warrants		Interest expense, net		$	(1,197	)		$	(426	)
	We use the income approach to value our warrants by using the Black-Scholes option-pricing model. Using this model, the risk-free interest rate is based on the U.S. Treasury yield curve in effect on the valuation date. The expected life is based on the period of time until the expiration of the warrants. Expected volatility is based on the historical volatility of our common stock over the most recent period equal to the expected life of the warrants. The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention to not pay regular dividends in the foreseeable future.
	These techniques incorporate Level 1 and Level 2 inputs. Significant inputs to the derivative valuation for the warrants are observable in the active markets and are classified as Level 2 in the hierarchy.
	The following fair value hierarchy table presents information about our financial instrument measured at fair value on a recurring basis using significant other observable inputs (Level 2) (in thousands):
			Carrying Value				Fair Value				Carrying Value		Fair Value
			As of March 31,				Measurement as of				As of December 31,		Measurement as of
			2014				March 31, 2014				2013		December 31, 2013
	Warrants (included in Other long-term liabilities)		$	5,027			$	5,027			$	3,830	$	3,830
	We have elected to report the value of our 2021 notes at amortized cost. The fair value of the 2021 notes at March 31, 2014 was approximately $375.6 million and was determined using Level 2 inputs based on market prices.

Employee_StockBased_Compensati

Employee Stock-Based Compensation	3 Months Ended
	Mar. 31, 2014
Employee Stock-Based Compensation	'
	4. Employee Stock-Based Compensation
	On February 11, 2014, our board of directors granted 1,268,000 stock options to employees under our 2007 Incentive Plan and 549,000 stock options to employees under our 2005 Incentive Plan. All the awards vest at 25% per year at each anniversary of the grant date over four years. The exercise price for the options was $7.67 per share, which was the closing stock price on the grant date. The weighted average grant date fair value of the options was $5.71 and was determined using the Black-Scholes option-pricing model with the following weighted average assumptions:
	Expected life	5.8 years
	Expected volatility	92.1	%
	Expected dividend yield	0	%
	Risk-free rate	1.83	%
	The expected life represents the period of time the options are expected to be outstanding. We used the simplified method for determining the expected life assumption due to limited historical exercise experience on our stock options. The expected volatility is based on the historical volatility of our common stock over the most recent period equal to the expected life of the option. The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention to not pay regular dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant and has a term equal to the expected life of the options.

Income_Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2014
Income Taxes	'
	5. Income Taxes
	In accordance with the Income Taxes topic of the Codification, we evaluate our deferred tax assets quarterly to determine if a valuation allowance is required. The Income Taxes topic requires that companies assess whether valuation allowances should be established based on the consideration of all available evidence. We recorded a valuation allowance of $1.0 million and $4.4 million for the three months ended March 31, 2014 and 2013, respectively, against the net deferred tax assets generated from the net operating losses during the periods related to our continuing operations.
	To the extent we generate sufficient taxable income in the future to fully utilize the tax benefits of the net deferred tax assets on which a valuation allowance is recorded, our effective tax rate may decrease as the valuation allowance is reversed. However, to the extent we generate future operating losses, we would be required to increase the valuation allowance on our net deferred tax assets and our income tax expense will be adversely affected.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies	'
	6. Commitments and Contingencies
	We are a party to various legal proceedings in the ordinary course of business. Although the ultimate disposition of these proceedings cannot be predicted with certainty, management believes the outcome of any claim that is pending or threatened, either individually or on a combined basis, will not have a material adverse effect on our consolidated financial position, cash flows or results of operations. However, there can be no assurances that future costs would not be material to our results of operations or liquidity for a particular period.

Segment_and_Product_Informatio

Segment and Product Information	3 Months Ended
	Mar. 31, 2014
Segment and Product Information	'
	7. Segment and Product Information
	We offer an integrated solution to our customers providing manufacturing, supply, and installation of a full range of structural and related building products. We provide a wide variety of building products and services 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. We group our building products and services into five product categories: prefabricated components, windows & doors, lumber & lumber sheet goods, millwork, and other building products & services. We have one operating segment with centralized financial and operational oversight.
	Sales by product category for the three month periods ended March 31, 2014 and 2013 were as follows (in thousands):
		Three Months Ended
		March 31,
		2014		2013
	Prefabricated components	$	70,490	$	60,820
	Windows & doors		76,275		63,605
	Lumber & lumber sheet goods		115,515		116,797
	Millwork		33,468		29,053
	Other building products & services		50,161		49,427
	Total sales	$	345,909	$	319,702

Recent_Accounting_Pronouncemen

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2014
Recent Accounting Pronouncements	'
	8. Recent Accounting Pronouncements
	In April 2014 the FASB issued an update to the existing guidance under the Presentation of Financial Statements and Property, Plant, and Equipment topics of the Codification. This update changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. Under the previous guidance any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of entity that represent a strategic shift that has, or will have, a major effect on an entity’s operations and financial results to be presented as a discontinued operation. This update is effective for fiscal years, and interim periods beginning after December 15, 2014. Early adoption is permitted, but not required. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. We do not currently expect that the adoption of this update will have an impact on our financial statements.

Debt_Tables

Debt (Tables)	3 Months Ended
	Mar. 31, 2014
Long-Term Debt	'
	Long-term debt consisted of the following (in thousands):
		March 31,				December 31,
		2014				2013
	2021 notes	$	350,000			$	350,000
	Other long-term debt		3,955				3,971
			353,955				353,971
	Less: current portion of long-term debt		69				67
	Total long-term debt, net of current maturities	$	353,886			$	353,904
Effect of Derivative Financial Instrument on Condensed Consolidated Statements of Operations and Comprehensive Loss	'
	The table below presents the effect of our derivative financial instrument on the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31 (in thousands):
	Derivative Not Designated		Location of Loss Recognized in Income		Amount of Loss
					Recognized in Income
	as Hedging Instrument				Three Months Ended March 31,
					2014				2013
	Warrants		Interest expense, net		$	(1,197	)		$	(426	)
Fair Value Hierarchy Table on Recurring Basis (Level 2)	'
	The following fair value hierarchy table presents information about our financial instrument measured at fair value on a recurring basis using significant other observable inputs (Level 2) (in thousands):
			Carrying Value				Fair Value				Carrying Value		Fair Value
			As of March 31,				Measurement as of				As of December 31,		Measurement as of
			2014				March 31, 2014				2013		December 31, 2013
	Warrants (included in Other long-term liabilities)		$	5,027			$	5,027			$	3,830	$	3,830

Employee_StockBased_Compensati1

Employee Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2014
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	'
	On February 11, 2014, our board of directors granted 1,268,000 stock options to employees under our 2007 Incentive Plan and 549,000 stock options to employees under our 2005 Incentive Plan. All the awards vest at 25% per year at each anniversary of the grant date over four years. The exercise price for the options was $7.67 per share, which was the closing stock price on the grant date. The weighted average grant date fair value of the options was $5.71 and was determined using the Black-Scholes option-pricing model with the following weighted average assumptions:
	Expected life	5.8 years
	Expected volatility	92.1	%
	Expected dividend yield	0	%
	Risk-free rate	1.83	%

Segment_and_Product_Informatio1

Segment and Product Information (Tables)	3 Months Ended
	Mar. 31, 2014
Schedule of Segment Reporting Information by Product Category	'
	Sales by product category for the three month periods ended March 31, 2014 and 2013 were as follows (in thousands):
		Three Months Ended
		March 31,
		2014		2013
	Prefabricated components	$	70,490	$	60,820
	Windows & doors		76,275		63,605
	Lumber & lumber sheet goods		115,515		116,797
	Millwork		33,468		29,053
	Other building products & services		50,161		49,427
	Total sales	$	345,909	$	319,702

Net_Loss_Per_Common_Share_Addi

Net Loss Per Common Share - Additional Information (Detail)	3 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Restricted Stock	'	'
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]	'	'
Shares excluded from the computations of EPS	0.1	0.7
Stock Options	'	'
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]	'	'
Shares excluded from the computations of EPS	6.5	5.4
Warrant	'	'
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]	'	'
Shares excluded from the computations of EPS	0.7	1.6

Debt_LongTerm_Debt_Detail

Debt - Long-Term Debt (Detail) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Debt Instrument [Line Items]	'	'
Long-term debt	$353,955	$353,971
Less: current portion of long-term debt	69	67
Long-term debt, net of current maturities	353,886	353,904
2021 Notes	'	'
Debt Instrument [Line Items]	'	'
Long-term debt	350,000	350,000
Other Long-Term Debt	'	'
Debt Instrument [Line Items]	'	'
Long-term debt	$3,955	$3,971

Debt_Effect_of_Derivative_Fina

Debt - Effect of Derivative Financial Instrument on Condensed Consolidated Statements of Operations and Comprehensive Loss (Detail) (Interest Expense, Warrant, USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Interest Expense | Warrant	'	'
Derivative Instruments Gain Loss [Line Items]	'	'
Amount of Loss Recognized in Income	($1,197)	($426)

Debt_Fair_Value_Hierarchy_Tabl

Debt - Fair Value Hierarchy Table on Recurring Basis (Level 2) (Detail) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]	'	'
Other long-term liabilities	$21,615	$20,144
Carrying Value | Warrant | Fair Value, Measurements, Recurring	'	'
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]	'	'
Other long-term liabilities	5,027	3,830
Fair Value Measurement | Warrant | Level 2 | Fair Value, Measurements, Recurring	'	'
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]	'	'
Other long-term liabilities	$5,027	$3,830

Debt_Additional_Information_De

Debt - Additional Information (Detail) (2021 Notes, Level 2, USD $)	Mar. 31, 2014
In Millions, unless otherwise specified
2021 Notes | Level 2	'
Debt Instrument [Line Items]	'
Fair value of the notes	$375.60

Employee_StockBased_Compensati2

Employee Stock-Based Compensation - Additional Information (Detail) (USD $)	1 Months Ended
	Feb. 11, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]	'
Stock option vesting percentage	25.00%
Stock option granted vested period	'4 years
Exercise Price for the options on the grant date	$7.67
Fair Value for the options on the grant date	$5.71
2007 Incentive Plan	'
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]	'
Options, Granted	1,268,000
2005 Incentive Plan	'
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]	'
Options, Granted	549,000

Employee_StockBased_Compensati3

Employee Stock-Based Compensation - Stock Option Valuation (Detail)	3 Months Ended
	Mar. 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]	'
Expected life	'5 years 9 months 18 days
Expected volatility	92.10%
Expected dividend yield	0.00%
Risk-free rate	1.83%

Income_Taxes_Additional_Inform

Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Income Tax Disclosure [Abstract]	'	'
Valuation allowance related to net deferred tax	$1	$4.40

Segment_and_Product_Informatio2

Segment and Product Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014
	Segment
	Category
Building products and services categories	5
Number of operating segment	1

Segment_and_Product_Informatio3

Segment and Product Information - Segment Reporting Information by Product Category (Detail) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Entity Wide Information Revenue From External Customer [Line Items]	'	'
Sales	$345,909	$319,702
Prefabricated Components	'	'
Entity Wide Information Revenue From External Customer [Line Items]	'	'
Sales	70,490	60,820
Windows And Doors	'	'
Entity Wide Information Revenue From External Customer [Line Items]	'	'
Sales	76,275	63,605
Lumber And Lumber Sheet Goods	'	'
Entity Wide Information Revenue From External Customer [Line Items]	'	'
Sales	115,515	116,797
Millwork	'	'
Entity Wide Information Revenue From External Customer [Line Items]	'	'
Sales	33,468	29,053
Other Building Products And Services	'	'
Entity Wide Information Revenue From External Customer [Line Items]	'	'
Sales	$50,161	$49,427