Executive Summary

Q4 2024 net sales were $3.82B, down 8.0% YoY, with gross margin at 32.3% and adjusted EBITDA of $493.6M; margins reflected ongoing normalization in Single-Family and Multi-Family, while acquisitions and one extra selling day partially offset core organic declines .
GAAP diluted EPS was $1.65 vs $2.83 prior year; adjusted diluted EPS was $2.31 vs $3.55, largely driven by lower gross profit and reduced operating leverage; adjusted SG&A fell to $764.2M as the company flexed costs .
Management introduced FY 2025 guidance: net sales $16.5–$17.5B, gross margin 30–32%, adjusted EBITDA $1.9–$2.3B, adjusted EBITDA margin 11.5–13.0%, and FCF $0.6–$1.0B; additionally provided rare Q1 2025 ranges given weather/wildfire impacts (net sales $3.5–$3.8B; adjusted EBITDA $350–$400M) .
Strategic actions: delivered $13M Q4 productivity savings ($117M FY), repurchased ~2.0M shares for ~$345M in Q4, and agreed to acquire Alpine Lumber (TTM sales ~$500M), bolstering value-added/install capacity and geographic reach—key catalysts into 2025 .

What Went Well and What Went Wrong

What Went Well

Value-added mix remained ~50% of net sales in Q4, supporting margin profile despite demand headwinds; install sales grew 8% YoY in 2024 as BFS addressed on-site skilled labor constraints .
Operational excellence delivered ~$13M Q4 productivity savings and ~$117M for FY 2024, including manufacturing efficiency gains (e.g., board foot per labor hour +10%) .
Digital platform adoption advanced, with ~$975M orders and $134M incremental digital sales in 2024; management targets ~$$200M additional incremental digital revenue in 2025 ("go slow to go fast" reset to accelerate adoption) .

What Went Wrong

Gross margin fell 300 bps YoY to 32.3% due to margin normalization in Single-Family and Multi-Family; adjusted EBITDA margin compressed 360 bps to 12.9% on reduced operating leverage .
End-markets remained soft: Multi-Family core organic sales down 29.1% and Single-Family down 6.8%; value-added categories saw declines tied to lower multi-family truss volumes and vendor price reductions in windows/doors .
CFO flagged Q1 2025 disruption from severe weather and California wildfires (~$80M lost sales quarter-to-date), plus one fewer selling day; lingering wildfire impacts expected to last beyond Q1 .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Net Sales ($USD Billions)	$4.15	$4.23	$3.82
GAAP Diluted EPS ($)	$2.83	$2.44	$1.65
Adjusted Diluted EPS ($)	$3.55	$3.07	$2.31
Gross Margin (%)	N/A	32.8%	32.3%
Adjusted EBITDA ($USD Millions)	$685.5	$626.5	$493.6
Adjusted EBITDA Margin (%)	16.5%	14.8%	12.9%
Adjusted SG&A ($USD Millions)	$798.7	$782.8	$764.2

YoY change highlights (Q4 2024 vs Q4 2023):

Net sales: −8.0% .
Gross margin: −300 bps to 32.3% .
Net income: −45.8% (EPS $1.65 vs $2.83) .
Adjusted EBITDA: −28.0% (margin −360 bps to 12.9%) .

Segment/Product Category Breakdown (Q4):

Product Category	Q4 2023 Net Sales ($MM)	Q4 2023 % of Sales	Q4 2024 Net Sales ($MM)	Q4 2024 % of Sales
Manufactured Products	$1,108.6	26.7%	$899.6	23.6%
Windows, Doors & Millwork	$1,046.8	25.2%	$997.8	26.1%
Specialty Building Products & Services	$954.2	23.0%	$966.2	25.3%
Lumber & Lumber Sheet Goods	$1,041.3	25.1%	$956.7	25.0%
Total	$4,150.9	100.0%	$3,820.3	100.0%

KPIs and Balance Sheet (Q4 2024):

KPI	Q4 2024
Cash from Operations ($MM)	$373.5
Free Cash Flow ($MM)	$277.3
Capital Expenditures, net of proceeds ($MM)	$96.2
Liquidity ($B)	~$1.8 (ABL $1.6B + cash $0.2B)
Net Debt ($B)	~$3.6
Net Leverage (Net Debt/LTM Adj. EBITDA)	1.5x
Interest Expense ($MM)	$53.1
Effective Tax Rate (Q4)	24.2%
Adjusted SG&A ($MM)	$764.2
Weighted Avg Diluted Shares (000s)	115,598
Value-Added Mix (Q4)	~50%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY 2025	N/A	$16.5–$17.5B	Introduced FY outlook
Gross Margin	FY 2025	N/A	30–32%	Introduced FY outlook
Adjusted EBITDA	FY 2025	N/A	$1.9–$2.3B	Introduced FY outlook
Adjusted EBITDA Margin	FY 2025	N/A	11.5–13.0%	Introduced FY outlook
Free Cash Flow	FY 2025	N/A	$0.6–$1.0B (at $380–$430/mbf)	Introduced FY outlook
Capital Expenditures	FY 2025	N/A	$350–$450M	Introduced FY outlook
Interest Expense	FY 2025	N/A	$250–$270M	Introduced FY outlook
Effective Tax Rate	FY 2025	N/A	23–25%	Introduced FY outlook
D&A	FY 2025	N/A	$550–$600M	Introduced FY outlook
Selling Days	FY 2025	N/A	One fewer day vs 2024	Introduced FY assumption
Productivity Savings	FY 2025	N/A	$70–$90M	Introduced FY outlook
Net Sales	Q1 2025	N/A	$3.5–$3.8B (weather/wildfire color)	One-time quarterly color
Adjusted EBITDA	Q1 2025	N/A	$350–$400M	One-time quarterly color

Earnings Call Themes & Trends

Topic	Q2 2024 (Prior-2)	Q3 2024 (Prior-1)	Q4 2024 (Current)	Trend
Digital/Technology initiatives	Emphasis on industry-leading digital platform; continued investment despite affordability challenges	Strategy pillars include investing in digital solutions; disciplined capital allocation	~$975M orders; $134M incremental digital sales in 2024; reset adoption approach; target ~$200M incremental in 2025	Building but slower-than-hoped adoption; focused acceleration
Supply chain & productivity	$37M Q2 savings; YTD $77M	$27M Q3; YTD $104M	~$13M Q4; FY ~$117M; +10% board foot per labor hour efficiency	Sustained but moderating quarterly cadence; accumulating FY impact
Tariffs/Macro	Affordability challenges noted	Choppy housing market; reduced value per start	Potential tariff/immigration risks; ~13–15% of purchasing is imports; higher tariffs could lift commodity prices and pressure starts	Macro/policy uncertainty elevated; cautious stance
Product performance	Value-added mix supported margins; Multi-Family headwinds	Value-added margin strength; Multi-Family down 30.9%	Value-added core organic −13%; manufactured −17%; windows/doors −8%; lumber −4%	Normalization across categories; value-added still premium
Regional trends	Not detailed	Not detailed	Builder behavior modulated by market; inventory and rate buy-downs vary by locale	Market-specific pacing; no explicit regional winners/laggards
Regulatory/Legal	None highlighted	None highlighted	Board appointments deepen e-commerce/digital expertise	Strengthening digital governance
R&D/ERP execution	ERP not highlighted	Not highlighted	ERP pilots later in 2025; phased implementation through 2027	Execution roadmap defined

Management Commentary

CEO Peter Jackson: “By continuing to invest in our value-added solutions and our installation business, along with leveraging cutting-edge technology, we are addressing customer challenges and serving as the supplier of choice” .
CFO Pete Beckmann: “Adjusted EPS was $2.31, a decrease of 35%... share repurchases... added roughly $0.15 per share for the fourth quarter. We... guide net sales in the range of $16.5 billion to $17.5 billion... adjusted EBITDA... $1.9 billion to $2.3 billion” .
CEO on competitive dynamics: “We think what we’ve laid out is a plan that allows us... to protect our share... but to still demonstrate... a very healthy margin profile overall” .
CFO on Q1 color: “We expect Q1 net sales to be between $3.5 billion and $3.8 billion... lost sales of approximately $80 million due to extreme weather... California wildfires will likely take much longer to recover” .

Q&A Highlights

Gross margin trajectory: Exit velocity ~31.5% with seasonal and competitive pressure expected in Q1; full-year 2025 gross margin guided 30–32% .
Competitive share vs price: Post-COVID “normalization” waves across categories; BFS walked from some commodity share previously but feels positioned to defend and selectively grow, especially in install and value-added .
Tariffs/immigration: Imports ~13–15% of purchasing; higher tariffs could lift commodity prices and constrain starts; install/value-added could offset skilled labor shortages, but severe labor policy impacts would be net negative for affordability .
Multi-Family headwind: $400–$500M YoY sales headwind front-half weighted in 2025; current volumes stable sequentially but tough comps .
Working capital/FCF: ~$500M working capital swing in 2025 tied to moving from shrinking to growing sales; FCF higher-than-expected in 2024 with ~$200M pulled forward .

Estimates Context

S&P Global consensus (EPS/revenue/EBITDA) was unavailable at time of request due to provider rate limits; therefore, beats/misses vs Wall Street estimates cannot be determined in this recap. We default to S&P Global for consensus estimates when available and will update when access is restored.*

Key Takeaways for Investors

Margin normalization continued in Q4 (GM 32.3%; Adj. EBITDA margin 12.9%), but value-added mix ~50% and cost flex preserved profitability; watch for 2025 margin discipline in a flat Single-Family and down mid-teens Multi-Family backdrop .
FY 2025 guide points to lower EBITDA vs 2024 ($1.9–$2.3B vs $2.33B actual), reflecting macro softness, higher capex/interest, and a working capital headwind; Q1 weather/wildfire color suggests a soft start .
Operational excellence remains an offset: ~$117M FY productivity savings in 2024 with a $70–$90M target for 2025; monitor manufacturing/supply chain initiatives for incremental margin support .
Strategic M&A (Alpine Lumber; ~$500M TTM sales) and install expansion underpin value-added growth and market reach; integration execution is a near-term catalyst .
Digital platform is progressing (orders ~$975M; $134M incremental sales), with a refined adoption strategy and ~$200M incremental 2025 target; successful ramp would be a medium-term organic growth driver .
Capital allocation remains shareholder-friendly: Q4 repurchases ~$345M; ~$500M authorization remaining; net leverage ~1.5x with ~7-year weighted average debt maturity .
Trading lens: absent consensus comparisons, price reaction should hinge on forward guide, margin credibility at 30–32%, and visibility on Q1 disruption recovery; watch tariff/immigration developments for commodity/starts sensitivity .

Footnote: *S&P Global (Capital IQ) consensus estimates were not accessible during this session due to provider rate limits; we will update beats/misses once data access resumes.

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