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What changed in Builders FirstSource's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Builders FirstSource's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+170 added−154 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-20)

Top changes in Builders FirstSource's 2025 10-K

170 paragraphs added · 154 removed · 138 edited across 3 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+16 added−1 removed127 unchanged
Biggest changeOur general business strategy may be adversely affected by any such economic downturn or recession, volatile business environment, hostile third-party action or continued unpredictable and unstable market conditions. The effects of any economic downturn or recession could continue for many years after the downturn or recession is considered to have ended.
Biggest changeThere can be no assurance that further deterioration in markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn or recession, volatile business environment, hostile third-party action or continued unpredictable and unstable market conditions.
In addition, our brand’s reputation is an important asset to our business; as a result, anything that damages our brand’s reputation could materially harm our business, results of operations, and financial condition. For example, negative media reports, whether or not accurate, can materially and adversely affect or reputation.
In addition, our brand’s reputation is an important asset to our business; as a result, anything that damages our brand’s reputation could materially harm our business, results of operations, and financial condition. For example, negative media reports, whether or not accurate, can materially and adversely affect our reputation.
In addition, the price of our common stock may fluctuate significantly in response to various factors, including: • actual or anticipated fluctuations in our results of operations; • announcements by us or our competitors of significant business developments, changes in customer relationships, acquisitions, or expansion plans; 21 • changes in the prices of products we sell; • involvement in litigation; • our sale or repurchases of common stock or other securities in the future; • market conditions in our industry; • changes in key personnel; • changes in market valuation or earnings of our competitors; • the trading volume of our common stock; • changes in the estimation of the future size and growth rate of our markets; and • general economic and market conditions.
In addition, the price of our common stock may fluctuate significantly in response to various factors, including: • actual or anticipated fluctuations in our results of operations; • announcements by us or our competitors of significant business developments, changes in customer relationships, acquisitions, or expansion plans; • changes in the prices of products we sell; • involvement in litigation; • our sale or repurchases of common stock or other securities in the future; • market conditions in our industry; • changes in key personnel; • changes in market valuation or earnings of our competitors; • the trading volume of our common stock; • changes in the estimation of the future size and growth rate of our markets; and • general economic and market conditions.
In addition, continued consolidation among production homebuilders or multi-family and commercial builders, or changes in such builders’ purchasing policies or payment practices, could result in additional pricing pressure, and our financial condition, operating results and cash flows may be adversely affected. Furthermore, in periods of economic downturn these pricing pressures tend to increase.
In addition, continued consolidation among production homebuilders or multi-family and commercial builders, or changes in such builders’ purchasing policies or payment practices, could result in additional pricing pressure, and our financial condition, operating results and cash flows may be adversely affected. 13 Furthermore, in periods of economic downturn these pricing pressures tend to increase.
Additionally, we may be impacted by intrusions or failures of critical infrastructure such as the power grid or communications systems. These events could compromise ours’ and our customers’ and suppliers’ confidential information, impede or interrupt our business operations, and could result in other negative consequences, including remediation costs, loss of revenue, litigation and reputational damage.
Additionally, we may be impacted by intrusions or failures of critical infrastructure such as the power grid or communications systems. These events could compromise our and our customers’ and suppliers’ confidential information, impede or interrupt our business operations, and could result in other negative consequences, including remediation costs, loss of revenue, litigation and reputational damage.
An economic downturn in the homebuilding industry could have an adverse effect on our operating results, financial condition or cash flows. We are not able to predict the timing, severity or duration of any future downturns in the housing market. Our industry is highly fragmented and competitive, and increased competitive pressure may adversely affect our results.
An economic downturn in the homebuilding industry could have an adverse effect on our operating results, financial condition or cash flows. We are not able to predict the timing, severity or duration of any future downturns in the housing market. 11 Our industry is highly fragmented and competitive, and increased competitive pressure may adversely affect our results.
In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations in an effort to meet our debt service and other obligations. We may have future capital needs and may not be able to obtain additional financing on acceptable terms.
In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations in an effort to meet our debt service and other obligations. 17 We may have future capital needs and may not be able to obtain additional financing on acceptable terms.
Furthermore, our customers are not required to purchase any minimum quantity of product 13 from us. The contracts into which we have entered with most of our professional customers typically provide that we supply particular products or services for a certain period of time when and if ordered by the customer.
Furthermore, our customers are not required to purchase any minimum quantity of product from us. The contracts into which we have entered with most of our professional customers typically provide that we supply particular products or services for a certain period of time when and if ordered by the customer.
Gross margins on sales to single-family, multi-family, commercial and other contractors vary based on a variety of factors, including the purchase volumes of the individual customer, the mix of products sold to that customer, the cost to serve that customer, the size and selling price of the project being constructed and the number of upgrades added to the project before or during its construction.
Gross margins on sales to single-family, multi-family, commercial and other contractors vary based on a variety of factors, including the purchase volumes of the 15 individual customer, the mix of products sold to that customer, the cost to serve that customer, the size and selling price of the project being constructed and the number of upgrades added to the project before or during its construction.
Any of these items, along with any failure to effectively manage data governance risks prior to or during ERP implementation, could adversely affect our results of operations, cash flows and financial condition, and the trading price of our common stock. We occupy most of our facilities under long-term non-cancelable leases.
Any of these items, along with any failure to effectively manage data governance risks prior to or during ERP implementation, could adversely affect our results of operations, cash flows and financial condition, and the trading price of our common stock. 16 We occupy most of our facilities under long-term non-cancelable leases.
An implementation of this scale is a major financial undertaking and has required, and will continue to require, substantial time and attention of management and key employees. Furthermore, we may not realize the anticipated benefits from the implementation of the new ERP system. We anticipate full integration of the new ERP system to take many years.
An implementation of this scale is a major financial undertaking and has required, and will continue to require, substantial time and attention of management and key employees. Furthermore, we may not realize the anticipated benefits from the implementation of the new ERP system. We anticipate that the full integration of the new ERP system will take many years.
Our business plan calls for us to execute a variety of strategies to deploy excess capital including, but not limited to, continued organic balance sheet growth and the consideration of potential acquisition opportunities to further deploy our excess capital when we expect such opportunities to significantly enhance long-term stockholder value.
Our business plan calls for us to execute a variety of strategies to deploy excess capital including, but not limited to, continued organic balance sheet growth and the consideration of potential acquisition opportunities when we expect such opportunities to significantly enhance long-term stockholder value.
A measure of our success is dependent on maintaining our safety record, and an injury to, or death of, any of our employees, customers, or members of the general public related to our business activities could result in material liabilities and reputational injury. Our business activities include an inherent risk of safety incidents that could result in injuries and deaths.
A measure of our success is dependent on maintaining our safety record, and an injury to, or death of, any of our employees, customers, or members of the general public related to our business activities could result in material liabilities and reputational damage. Our business activities include an inherent risk of safety incidents that could result in injuries and deaths.
Moreover, social media has dramatically increased the rate at which negative publicity can be disseminated before there is any meaningful opportunity to respond to or address an issue to protect our reputation. We are subject to potential exposure to environmental liabilities and are subject to environmental regulation.
Moreover, social media has dramatically increased the rate at which negative publicity can be disseminated before there is any meaningful opportunity to respond to or address an issue to protect our reputation. 20 We are subject to potential exposure to environmental liabilities and are subject to environmental regulation.
Strategic acquisitions involve risks and if we are unable to realize the 12 anticipated benefits of these transactions or identify suitable acquisition candidates in the future, our growth, financial condition and results of operations could be materially and adversely affected.
Strategic acquisitions involve risks and if we are unable to realize the anticipated benefits of these transactions or identify suitable acquisition candidates in the future, our growth, financial condition and results of operations could be materially and adversely affected.
If additional funds are raised through the issuance of additional equity or convertible debt securities, our stockholders may experience significant dilution. 17 We may incur additional indebtedness. We may incur additional indebtedness in the future, including collateralized debt, subject to the restrictions contained in the agreements governing our debt instruments.
If additional funds are raised through the issuance of additional equity or convertible debt securities, our stockholders may experience significant dilution. We may incur additional indebtedness. We may incur additional indebtedness in the future, including collateralized debt, subject to the restrictions contained in the agreements governing our debt instruments.
The global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, high rates of inflation, and uncertainty about economic stability and a potential recession.
The global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, high rates of inflation, and uncertainty about economic stability and the risk of a potential recession.
The cost and 15 potential problems and interruptions associated with the implementation of these initiatives, including those associated with managing third-party service providers and employing new web-based tools and services, could disrupt or reduce the efficiency of our operations.
The cost and potential problems and interruptions associated with the implementation of these initiatives, including those associated with managing third-party service providers and employing new web-based tools and services, could disrupt or reduce the efficiency of our operations.
Improvements, upgrades and, to a greater extent, system conversions, are often complex, costly and time consuming. In addition, such improvements can be challenging to integrate with our existing technology systems or may uncover problems with our existing technology systems.
Improvements, upgrades and, to a greater extent, system conversions, are often complex, costly and time consuming. In addition, such improvements may be challenging to integrate with our existing technology systems or may uncover problems with our existing technology systems.
Adverse impacts 19 from any future changes in federal and state laws and regulations on our business could include an adverse impact on our financial condition, operating results and cash flows.
Adverse impacts from any future changes in federal and state laws and regulations on our business could include an adverse impact on our financial condition, operating results and cash flows.
Moreover, we could incur significantly higher costs and longer lead times associated with distributing our products to our customers during the time that it retakes for us to reopen or replace a damaged facility. If any of these events were to occur, our financial condition, operating results and cash flows could be materially adversely affected.
Moreover, we could incur significantly higher costs and longer lead times associated with distributing our products to our customers during the time that it takes for us to reopen or replace a damaged facility. If any of these events were to occur, our financial condition, operating results and cash flows could be materially adversely affected.
The prices of wood products directly affect our sales and earnings. In particular, low prices for wood products over a sustained period can adversely affect our financial condition, operating results and cash flows. Our lumber and lumber sheet goods product category represented 26% of total net sales for the year ended December 31, 2024.
The prices of wood products directly affect our sales and earnings. In particular, low prices for wood products over a sustained period can adversely affect our financial condition, operating results and cash flows. Our lumber and lumber sheet goods product category represented 26% of total net sales for the year ended December 31, 2025.
Failure to attract and retain our key employees may adversely impact our ability to successfully execute our business strategies. Our success depends in part on our ability to attract, hire, train and retain qualified managerial, operational, sales and other personnel. We face significant competition for these types of employees in our industry and from other industries.
Failure to attract and retain our key employees may adversely impact our ability to successfully execute our business strategies. Our success depends in part on our ability to attract, hire, train and retain qualified managerial, operational, sales and other personnel. We face significant competition for these employees in our industry and from other industries.
Additionally, investors and shareholder advocates are placing an increasing emphasis on how corporations address corporate responsibility and sustainability issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations.
Some investors and shareholder advocates are placing an increasing emphasis on how corporations address corporate responsibility and sustainability issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations.
If the housing market declines, we may be required to take impairment charges relating to our operations or temporarily idle or permanently close under-performing locations. If conditions in the housing industry continue to deteriorate, we may need to take goodwill and/or asset impairment charges relating to certain of our reporting units.
If the housing market declines, we may be required to take impairment charges relating to our operations or temporarily idle or permanently close under-performing locations. If conditions in the housing industry continue to deteriorate, we may be required to take goodwill and/or asset impairment charges for certain reporting units.
The new ERP system is intended to transform areas such as manufacturing, supply chain, procurement, warehouse management, delivery, quote to cash, financial reporting, and analytics, and position us to better leverage automation and process efficiency and enable productivity enhancements.
The new ERP system is intended to transform certain areas of business such as manufacturing, supply chain, procurement, warehouse management, delivery, quote to cash, financial reporting, and analytics, and position us to better leverage automation and process efficiency and enable productivity enhancements.
Any future changes in federal and state tax laws and regulations could have an adverse direct impact on our corporate taxes and/or an adverse indirect impact such as making purchasing a home less attractive, which could reduce demand for homes.
Any future changes in federal and state tax laws and regulations could have an adverse direct impact on our corporate taxes. Such changes may also have an adverse indirect impact such as making purchasing a home less attractive, which could reduce demand for homes.
In addition, the financial markets and the global economy may also be adversely affected by ongoing geopolitical conflicts, including those in Ukraine and the Middle East. These conflicts have impacted, and may continue to impact, commodity and energy prices, global supply chains and financial markets.
In addition, the financial markets and the global economy may also be adversely affected by ongoing geopolitical conflicts, including those in Ukraine, Venezuela, the Middle East, and other regions. These conflicts have impacted, and may continue to impact, commodity and energy prices, global supply chains and financial markets.
In addition, home center retailers, which have historically concentrated their sales efforts on retail consumers 11 and small contractors, have expanded their efforts into the professional homebuilders in recent years, including through the use of enhanced e-commerce offerings and acquisitions, and may continue to intensify these efforts in the future.
In addition, home center retailers, which have historically concentrated their sales efforts on retail consumers and small contractors, have expanded their efforts into the professional homebuilder market in recent years, including through the use of enhanced e-commerce offerings and acquisitions, and may continue to intensify these efforts in the future.
We are substantially reliant on cash on hand and borrowing availability under the Revolving Facility, which totaled $1.8 billion at December 31, 2024, to provide working capital and fund our operations. Our working capital requirements are likely to grow as we continue to grow organically and through acquisitions.
We are substantially reliant on cash on hand and borrowing availability under the Revolving Facility, which totaled $1.7 billion at December 31, 2025, to provide working capital and fund our operations. Our working capital requirements are likely to grow as we continue to grow organically and through acquisitions.
The loss of any member of our senior management team or other experienced senior employees could impair our ability to execute our business plan, cause us to lose customers and reduce our net sales, or lead to employee morale problems and/or the loss of other key employees.
The loss of any member of our senior management team or other experienced senior employees could impair our ability to execute our business plan, result in operational disruptions, cause us to lose customers and reduce our net sales, or lead to employee morale problems and/or the loss of other key employees.
Our ten largest customers generated 15% of our net sales for the year ended December 31, 2024. We cannot guarantee that we will maintain or improve our relationships with these customers or that we will supply these customers at historical levels.
Our ten largest customers generated 14% of our net sales for the year ended December 31, 2025. We cannot guarantee that we will maintain or improve our relationships with these customers or that we will supply these customers at historical levels.
In addition, production homebuilders, multi-family builders and other customers may: (1) seek to purchase some of the products that we currently sell directly from manufacturers, (2) elect to establish their own building products manufacturing and distribution facilities or (3) give advantages to manufacturing or distribution intermediaries in which they have an economic stake.
In addition, production homebuilders, multi-family builders and other customers may: (i) seek to purchase some of the products that we currently sell directly from manufacturers, (ii) elect to establish their own building products manufacturing and distribution facilities or (iii) give advantages to manufacturing or distribution intermediaries in which they have an economic stake.
The Company is likely to execute similar debt transactions in the future. However, there can be no assurance that we will be successful in anticipating the direction of interest rates or changes in market conditions, which could result in future debt transactions having a material adverse impact on our financial condition, operating results and cash flows.
However, there can be no assurance that we will be successful in anticipating the direction of interest rates or changes in market conditions, which could result in future debt transactions having a material adverse impact on our financial condition, operating results and cash flows.
We are continually investing resources to update and improve these systems and environments in order to meet existing needs, as well as the growing and changing requirements of our business and customers. For example, we are in the process of implementing a new ERP system.
We are continually investing resources to update and improve these systems and environments in order to meet existing needs, as well as the growing and changing requirements of our business and customers. For example, during 2025, we began the implementation of a new ERP system.
In addition, we also have $0.6 billion in obligations under operating leases.
In addition, we also have $0.7 billion in obligations under operating leases.
We may be unsuccessful in attracting and retaining the personnel we require to conduct and expand our operations successfully. In addition, key personnel may leave us and compete against us. Our success also depends to a significant extent on the continued service of our senior management team. We may be unsuccessful in replacing key managers who either resign or retire.
We may be unsuccessful in attracting and retaining the personnel we require to conduct and expand our operations successfully. In addition, key personnel may leave us and compete against us. Our success also depends to a significant extent on the continued service of our senior management team and key operations personnel.
The agreement governing the Revolving Facility contains a financial covenant requiring the satisfaction of a minimum fixed charge ratio of 1.00 to 1.00 if our excess availability falls below the greater of $80.0 million or 10% of the maximum borrowing amount, which was $171.4 million as of December 31, 2024.
The agreement governing the Revolving Facility contains a financial covenant requiring the satisfaction of a minimum fixed charge ratio of 1.00 to 1.00 if our excess availability falls below the greater of $165.0 million or 10% of the maximum borrowing amount, which was $160.7 million as of December 31, 2025.
We rely upon our information technology systems to run critical accounting and financial information systems, process receivables, manage and replenish inventory, fill and ship customer orders on a timely basis, and coordinate our sales activities across all products and services.
Our centralized financial reporting system currently draws data from our ERP systems. We rely upon our information technology systems to run critical accounting and financial information systems, process receivables, manage and replenish inventory, fill and ship customer orders on a timely basis, and coordinate our sales activities across all products and services.
The factors expected to contribute to this variability include, among others: (1) the volatility of prices of lumber, wood products and other building products, (2) the cyclical nature of the homebuilding industry, (3) general economic conditions in the markets that we serve, (4) the intense competition in the industry, including expansion and growth strategies by competitors, (5) the production schedules of our customers and suppliers, (6) the effects of the weather and (7) labor costs, labor shortages and available capacity to meet customer demand for our products.
The factors expected to contribute to this variability include, among others: (i) the volatility of prices of lumber, wood products and other building products, (ii) the cyclical nature of the homebuilding industry, (iii) general economic conditions in the markets that we serve, (iv) the intense competition in the industry, including expansion and growth strategies by competitors, (v) the production schedules of our customers and suppliers, (vi) the effects of the weather and (vii) labor costs, labor shortages and available capacity to meet customer demand for our products.
The market price of our common stock historically has experienced and may continue to experience significant price fluctuations similar to those experienced by the broader stock market in recent years. For example, between January 1, 2024, and December 31, 2024, the closing price of our common stock on the NYSE ranged from $132.60 to $211.12 per share.
The market price of our common stock historically has experienced and may continue to experience significant price fluctuations similar to those experienced by the broader stock market in recent years. For example, between January 1, 2025, and December 31, 2025, the closing price of our common stock on the NYSE ranged from $94.85 to $173.51 per share.
We are subject to various federal, state, local and other regulations, including, among other things, regulations promulgated by the Department of Transportation and applicable to our fleet of delivery trucks, work safety regulations promulgated by the Department of Labor’s Occupational Safety and Health Administration, employment regulations, including immigration and work-authorization laws and regulations promulgated by the United States Equal Employment Opportunity Commission, tariff regulations on imported products promulgated by the Federal government, accounting standards issued by the Financial Accounting Standards Board (“FASB”) or similar entities, state and local regulations relating to our escrow business, and state and local zoning restrictions and building codes.
These laws, regulations and executive orders include, among other things, regulations promulgated by the Department of Transportation and applicable to our fleet of delivery trucks, work safety regulations promulgated by the Department of Labor’s Occupational Safety and Health Administration, employment regulations, including immigration and work-authorization laws and regulations promulgated by the United States Equal Employment Opportunity Commission, tariff regulations on imported products promulgated by the Federal government, laws and regulations related to cybersecurity, data privacy, encryption, artificial intelligence, telecommunications, accounting standards issued by the Financial Accounting Standards Board (“FASB”) or similar entities, state and local regulations relating to our escrow business, and state and local zoning restrictions and building codes.
Any such non-cash charges would have an adverse effect on our financial results. In addition, in response to industry conditions, we may have to temporarily idle or permanently close certain facilities in under-performing markets.
Any such non-cash charges would have an adverse effect on our financial results. In addition, in response to industry conditions, we may have to temporarily idle or permanently close certain facilities in under-performing markets. Widespread facility closures could have a significant adverse effect on our financial condition, operating results and cash flows.
Moreover, failure to comply with the regulatory requirements applicable to our business could expose us to substantial penalties that could adversely affect our financial condition, operating results and cash flows and damage our reputation. Future changes to tax laws and regulations could have an adverse impact on our business.
Failure to comply with these laws, regulations, and executive orders could expose us to fines and penalties that could adversely affect our financial condition, operating results and cash flows and damage our reputation. Future changes to tax laws and regulations could have an adverse impact on our business.
In addition, sanctions imposed by the U.S. and other countries in response to the conflict in Ukraine could further adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
In addition, sanctions imposed by the U.S. and other countries in response to these conflicts, as well as any economic countermeasures by the affected countries or others could further adversely impact the financial markets and the global economy.
Consequently, we may continue to face higher operating expenses and may lose revenue opportunities if we lack capacity to meet customer demands due to labor shortages While only a small percentage of our workforce is unionized, there can be no assurance that additional employees will not conduct union organization campaigns or become union members in the future and a failure to renew existing collective bargaining agreements on favorable terms could lead to further labor shortages and higher labor costs.
While only a small percentage of our workforce is unionized, there can be no assurance that additional employees will not conduct union organization campaigns or become union members in the future, and a failure to renew existing collective bargaining agreements on favorable terms could lead to further labor shortages and higher labor costs.
Our failure to make successful acquisitions or to build or expand needed facilities, including manufacturing facilities, produce saleable product, or meet customer demand in a timely manner could adversely affect our financial condition, operating results, and cash flows.
Our failure to make successful acquisitions or to build or expand needed facilities, including manufacturing facilities, produce saleable product, or meet customer demand in a timely manner could adversely affect our financial condition, operating results, and cash flows. 12 A negative impact on our financial condition, operating results and cash flows, or our decision to invest in strategic acquisitions or new facilities, could adversely affect our ability to maintain a balanced debt level.
The building products supply industry is highly fragmented and competitive. We face, and will continue to face, significant competition from local, regional and other national building materials chains, as well as from privately-owned single site enterprises and new entrants into the market, due to the low barrier to, and cost of, entry.
We face, and will continue to face, significant competition from local, regional and other national building materials chains, large retailers that provide products to retail consumers and small builders, as well as from privately-owned single site enterprises and new entrants into the market, due to the low barrier to, and cost of, entry.
As of December 31, 2024, our debt totaled $3.7 billion, which includes $0.2 billion of finance lease and other finance obligations. We have a $1.8 billion revolving credit facility with a maturity date of January 17, 2028 (“Revolving Facility”), under 16 which we had no outstanding borrowings and $0.1 billion of letters of credit outstanding as of December 31, 2024.
As of December 31, 2025, our debt totaled $4.5 billion, which includes $0.2 billion of finance lease and other finance obligations. We have a $2.2 billion revolving credit facility with a maturity date of May 20, 2030 (“Revolving Facility”), under which we had no outstanding borrowings and $0.1 billion of letters of credit outstanding as of December 31, 2025.
The breach of any of these provisions could result in a default under our indebtedness, which could cause those and other obligations to become due and payable. If any of our indebtedness is accelerated, we may not be able to repay it.
The breach of any of these provisions could result in a default under our indebtedness, which could cause those and other obligations to become due and payable.
We cannot assure you that any current or future claims against us will not adversely affect our financial condition, operating results and cash flows. Federal, state, local and other regulations could impose substantial costs and/or restrictions on our operations that would reduce our net income.
We cannot assure you that any current or future claims against us will not adversely affect our financial condition, operating results and cash flows. 19 Our operations are subject to complex and evolving federal, state, and local laws and regulations, the violation of which could expose us to potential liabilities and impose substantial costs and/or restrictions on our operations that could reduce our net income.
The specific consequences of these geopolitical conflicts on our business are difficult to predict at this time, but in addition to inflationary pressures affecting our operations, any shortages of fuel or significant fuel cost increases could seriously disrupt our ability to distribute products to our customers. 20 There can be no assurance that further deterioration in markets and confidence in economic conditions will not occur.
The specific consequences of these geopolitical conflicts on our business are difficult to predict at this time, but in addition to inflationary pressures affecting our operations, any shortages of fuel or significant fuel cost increases could seriously disrupt our ability to distribute products to our customers.
In addition, our effective tax rate in the future could be adversely affected by changes to our operating structure, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, and the discovery of new information in the course of our tax return preparation.
In addition, our effective tax rate in the future could be adversely affected by changes to our operating structure, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, such as the H.R.1 - One Big Beautiful Bill Act enacted into law in 2025, and the discovery of new information in the course of our tax return preparation.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly. Interest rates may increase in the future. As a result, interest rates on our Revolving Facility could be higher or lower than current levels. As of December 31, 2024, we had no outstanding debt at variable interest rates.
If any of our indebtedness is accelerated, we may not be able to repay it. 18 Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly. Interest rates may increase in the future. As a result, interest rates on our Revolving Facility could be higher or lower than current levels.
We may be adversely affected by any natural or man-made disruptions to our operations and our distribution and manufacturing facilities. We currently maintain a broad network of distribution and manufacturing facilities throughout the U.S.
The effects of any economic downturn or recession could continue for many years after the downturn or recession is considered to have ended. We may be adversely affected by any natural or man-made disruptions to our operations and our distribution and manufacturing facilities. We currently maintain a broad network of distribution and manufacturing facilities throughout the U.S.
Any of these competitors may (1) foresee the course of market development more accurately than we do, (2) develop products that are superior to our products, (3) have the ability to produce or supply similar products at a lower cost, (4) develop stronger relationships with local homebuilders or commercial builders or (5) adapt more quickly to new technologies or evolving customer requirements than we do.
Any of these competitors may (i) foresee the course of market development more accurately than we do, (ii) develop products that are superior to our products, (iii) have the ability to produce or supply similar products at a lower cost, (iv) develop stronger relationships with local homebuilders or commercial builders, (v) adapt more quickly to evolving customer preferences or requirements, or (vi) more effectively adopt and utilize new or emerging technologies, including data analytics, automation and artificial intelligence than we do.
We have also repurchased approximately $7.6 billion of our shares since January 2021 through the date of this filing and intend to continue repurchasing shares pursuant to share repurchase authorization approved by our board of directors in August 2024.
We have also repurchased approximately $8.0 billion of our shares since January 2021 through the date of this filing and intend to continue repurchasing shares from time to time, subject to market conditions, liquidity, and other considerations, pursuant to the share repurchase authorization approved by our board of directors in April 2025.
We are also currently implementing a new ERP system and there is no guarantee that such implementation will be successful or that we will not experience disruptions in connection with the new ERP system.
We are currently implementing a new ERP system and there is no guarantee that such implementation will be successful or that we will not experience disruptions in connection with the new ERP system. Many of our legacy ERP systems are proprietary systems that have been highly customized by our computer programmers.
Furthermore, if certain markets where we have made significant investments become less desirable for new home building due to the frequency of adverse weather events or climate change, we could incur significant losses at our facilities throughout these markets.
Furthermore, if certain markets where we have made significant investments become less desirable for new home building due to the frequency of adverse weather events or climate change, we could incur significant losses at our facilities throughout these markets. 21 Risks relating to corporate responsibility and sustainability could adversely affect our reputation and shareholder, employee, customer and third-party relationships and may negatively affect our stock price.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. The Revolving Facility also assesses variable commitment and outstanding letter of credit fees based on quarterly average loan utilization.
As of December 31, 2025, we had no outstanding debt at variable interest rates. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
If we were involved in any similar litigation, we could incur substantial costs and our management’s attention and resources could be diverted, which could adversely affect our financial condition, results of operations and cash flows. As a result, it may be difficult for you to resell your shares of common stock in the future. I tem 1B.
If we were involved in any similar litigation, we could incur substantial costs and our management’s attention and resources could be diverted, which could adversely affect our financial condition, results of operations and cash flows.
Widespread facility closures could have a significant adverse effect on our financial condition, operating results and cash flows. 18 Our inability to effectively deploy our excess capital may negatively affect return on equity and stockholder value. Throughout 2024, we generated significant excess cash flows.
Our inability to effectively deploy our excess capital may negatively affect return on equity and stockholder value. Throughout 2025, we generated significant excess cash flows.
We may be adversely affected by any disruption in our respective information technology systems. Our operations are dependent upon our information technology systems, which encompass all of our major business functions. Our primary ERP systems are proprietary systems that have been highly customized by our computer programmers. Our centralized financial reporting system currently draws data from our ERP systems.
We may be adversely affected by any disruption in our respective information technology systems. Our operations are dependent upon our information technology systems, which encompass all of our major business functions.
Our systems, or those of our significant customers or suppliers, might be damaged or interrupted by natural or man-made events or by computer viruses, physical or electronic break-ins, or similar disruptions affecting the global Internet. 14 In addition, we rely on a number of third-party service providers to execute certain business processes and maintain certain information technology systems and infrastructure, and any breach of security or disruption in their systems could impair our ability to operate effectively.
In addition, we rely on a number of third-party service providers to execute certain business processes and maintain certain information technology systems and infrastructure, and any breach of security or disruption in their systems could impair our ability to operate effectively.
Further, an increase in interest rates could also trigger a limitation on the deductibility of those interest costs, increasing our tax expense and further decreasing our net income and cash flows. In recent years, the Company has executed several debt transactions designed to optimize our debt structure and extend maturities.
The Revolving Facility also assesses variable commitment and outstanding letter of credit fees based on quarterly average loan utilization. Further, an increase in interest rates could also trigger a limitation on the deductibility of those interest costs, increasing our tax expense and further decreasing our net income and cash flows.
A negative impact on our financial condition, operating results and cash flows, or our decision to invest in strategic acquisitions or new facilities, could adversely affect our ability to maintain a balanced debt level. Furthermore, we have made significant investments, and intend to continue to invest, in technology solutions designed to increase the efficiency of the homebuilding process.
Furthermore, we have made significant investments, and intend to continue to invest, in technology solutions designed to increase the efficiency of the homebuilding process.
Risks relating to corporate responsibility and sustainability could adversely affect our reputation and shareholder, employee, customer and third-party relationships and may negatively affect our stock price. Our business faces increasing public scrutiny related to corporate responsibility and sustainability activities.
Our business faces increasing public scrutiny related to corporate responsibility and sustainability activities.
Removed
In addition, changes to global trade policies may adversely impact our business. Significant changes in these or other areas may increase our general and administrative costs and adversely affect our financial condition, operating results and cash flows.
Added
The building products supply industry is highly fragmented and competitive.
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While we seek to mitigate risks and liabilities of these transactions through due diligence to identify valuation issues and potential loss contingencies and to negotiate transaction terms, there may be risks and liabilities that our due diligence efforts do not discover, that are not accurately or completely disclosed to us or that we inadequately assess.
Added
We may be unsuccessful in replacing key managers or operations personnel who either resign or retire.
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Consequently, we may continue to face higher operating expenses and may lose revenue opportunities if we lack capacity to 14 meet customer demands due to labor shortages.
Added
Our systems, or those of our significant customers or suppliers, might be damaged or interrupted by natural or man-made events or by computer viruses, physical or electronic break-ins, or similar disruptions affecting the global Internet.
Added
In recent years, the Company has executed several debt transactions designed to optimize our debt structure and extend maturities. The Company is likely to execute similar debt transactions in the future.
Added
It is not possible to predict the outcome of pending legal proceedings, and it is possible that these actions could be decided unfavorably towards the Company.
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We are subject to various federal, state and local laws, regulations and executive orders, many of which are complex, frequently changing, and subject to varying interpretations.
Added
Changes to existing laws, regulations, executive orders, and enforcement priorities, changes to how they are interpreted, or the implementation of new, more stringent laws, regulations, and executive orders, could adversely affect our business by increasing compliance costs, limiting our ability to offer a product or service, requiring changes to our business practices, or otherwise making our products and services less attractive to customers.
Added
Additionally, some investors and shareholder advocates may disagree with our goals and initiatives, and the focus of such stakeholders may change and evolve over time. Stakeholders also may have different views on where we should focus our corporate responsibility and sustainability efforts.
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As a result, it may be difficult for you to resell your shares of common stock in the future. 22 Emerging issues related to our development, integration and use of artificial intelligence (“AI”) could give rise to legal or regulatory action, damage our reputation or otherwise materially harm our business.
Added
Our development, integration and use of AI technology in our operations remains in the early phases. We have started to assess the use of AI technology to drive productivity and data analytics.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

19 edited+4 added−0 removed22 unchanged
Biggest changeThe outside area provides space for lumber storage and a staging area for delivery while the warehouse stores millwork, windows and doors, and other specialty building products. The distribution centers are usually located in industrial areas with easy access to freeways to maximize distribution efficiency and convenience.
Biggest changeDistribution centers typically include 10 to 15 useable acres of outside storage, a 45,000 square foot warehouse, 6,000 square feet of office space, and 15,000 square feet of covered storage. The outside area provides space for lumber storage and a staging area for delivery while the warehouse stores millwork, windows and doors, and other specialty building products.
While these claims are generally covered under the Company’s existing insurance programs to the extent any loss exceeds the deductible, there is a reasonable possibility of loss that is not able to be estimated at this time because (i) many of the proceedings are in the discovery stage, (ii) the outcome of future litigation is uncertain, and/or (iii) the complex nature of the claims.
While these claims are generally covered under the Company’s existing insurance programs to the extent any loss exceeds the deductible, there is a reasonable possibility of loss that is not able to be estimated at this time because (i) many of the proceedings are in the discovery stage, (ii) the outcome of future litigation is uncertain, and/or (iii) the nature of the claims is complex.
The Company’s cybersecurity program interfaces with other functional areas within the Company, including but not limited to the Company’s business segments and information technology, legal, risk management, human resources and internal audit departments, as well as external third-party partners, to identify and understand potential cybersecurity threats.
The Company’s cybersecurity program interfaces with other functional areas within the Company, including but not limited to the Company’s business segments and information technology, legal, risk management, human resources and internal audit departments, as well as external third-party partners, to identify and understand potential cybersecurity threats and risks.
Through knowledge of local homebuilder needs, customer coordination and rapid restocking ability, we reduce working capital requirements and guard against out-of-stock products. We believe that this reliability is highly valued by our customers and reinforces customer relationships. 23 I tem 3. Legal Proceedings The Company has a number of known and threatened construction defect legal claims.
Through knowledge of local homebuilder needs, customer coordination and rapid restocking ability, we reduce working 24 capital requirements and guard against out-of-stock products. We believe that this reliability is highly valued by our customers and reinforces customer relationships. I tem 3. Legal Proceedings The Company has a number of known and threatened construction defect legal claims.
In addition, we operate a fleet of approximately 19,000 rolling stock units which includes trucks, forklifts, and trailers used to deliver products from our distribution and manufacturing centers to our customers’ job sites. Through our emphasis on local market flexibility and strategically placed locations, we minimize shipping and freight costs while maintaining a high degree of local market expertise.
In addition, we operate a fleet of approximately 19,300 rolling stock units which includes trucks, forklifts, and trailers used to deliver products from our distribution and manufacturing centers to our customers’ job sites. Through our emphasis on local market flexibility and strategically placed locations, we minimize shipping and freight costs while maintaining a high degree of local market expertise.
As described in Note 9 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K, 115 of our leased facilities are subject to a sales-lease back transaction that is accounted for in our financial statements as owned assets with offsetting financing obligations.
As described in Note 9 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K, 110 of our leased facilities are subject to a sales-lease back transaction that is accounted for in our financial statements as owned assets with offsetting financing obligations.
The program does not obligate the Company to acquire any particular amount of its common stock, and the share repurchase program may be suspended or discontinued at any time at the Company’s discretion. I tem 6. Reserved 26
The program does not obligate the Company to acquire any particular amount of its common stock, and the share repurchase program may be suspended or discontinued at any time at the Company’s discretion. I tem 6. Reserved 27
The Company’s CISO and Chief Information Officer (“CIO”) provide quarterly reports to the Audit Committee regarding the evolving cybersecurity risk landscape, including emerging risks, as well as the Company’s processes, program and initiatives for managing these risks. The Company’s CISO reports directly to the CIO, who in turn reports to the CEO.
The Company’s CISO and Chief Information Officer (“CIO”) provide quarterly reports to the Audit Committee regarding the evolving cybersecurity risk landscape, including emerging risks, as well as the Company’s processes, program and initiatives for managing these risks. The Company’s CISO reports directly to the CIO, who in turn reports to the principal executive officer (“CEO”).
We currently do not pay dividends. Any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including restrictions in our debt instruments, as well as our future earnings, capital requirements, financial condition, prospects and other factors that our board of directors may deem relevant.
Any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including restrictions in our debt instruments, as well as our future earnings, capital requirements, financial condition, prospects and other factors that our board of directors may deem relevant.
This analysis drives the Company’s short- and long-term cybersecurity strategies, which are executed through a collaborative effort within the IT department and are communicated to the board of directors regularly. I tem 2. Properties We have a broad network of distribution and manufacturing facilities in 43 states throughout the U.S. Based on available 2024 U.S.
The cybersecurity team’s analysis drives the Company’s short- and long-term cybersecurity strategies, which are executed through a collaborative effort within the IT department and are communicated to the Audit Committee and the board of directors regularly. I tem 2. Properties We have a broad network of distribution and manufacturing facilities in 43 states throughout the U.S.
We own approximately 190 actively operating facilities, including our recent acquisition of Alpine Lumber, and contractually lease 400 actively operating facilities. These leases typically have an initial lease term of five to 15 years and most provide options to renew for specified periods of time. A majority of our leases provide for fixed annual rentals.
We own approximately 190 actively operating facilities, and contractually lease 395 actively operating facilities. These leases typically have an initial lease term of five to 15 years and most provide options to renew for specified periods of time. A majority of our leases provide for fixed annual rentals.
Truss and panel manufacturing facilities vary in size from 60,000 square feet to 100,000 square feet with 10 to 15 useable acres of outside storage for materials and for finished goods. Our window manufacturing facility in Houston, Texas is approximately 840,000 square feet.
Where efficient, they are located on the same premises as our distribution facilities. Truss and panel manufacturing facilities vary in size from 60,000 square feet to 100,000 square feet with 10 to 15 useable acres of outside storage for materials and for finished goods. Our window manufacturing facility in Houston, Texas is approximately 840,000 square feet.
Mine Safety Disclosures Not applicable. 24 P ART II I tem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NYSE under the symbol “BLDR”. The approximate number of stockholders of record of our common stock as of February 14, 2025, was 64.
Mine Safety Disclosures Not applicable. 25 P ART II I tem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is dual listed and traded on the NYSE and NYSE Texas under the symbol “BLDR”.
The Company has engage d a third-party managed detection and response company to monitor the security of its information systems around-the-clock, including intrusion detection, and to provide instantaneous alerting should a cybersecurity event occur. The 22 Company also maintains a cybersecurity insurance policy and has engaged a third-party digital forensics and incident response consultant and legal counsel on retainer .
The Company has engage d a third-party managed detection and response partner to monitor the security of its information systems around-the-clock, including intrusion detection, and to provide instantaneous alerting and triaging should a cybersecurity event occur.
Many of our distribution centers are situated on rail lines for efficient receipt of goods. Our manufacturing facilities produce trusses, wall panels, engineered wood, windows, pre-hung doors and custom millwork. Where efficient, they are located on the same premises as our distribution facilities.
The distribution centers are usually located in industrial areas with easy access to freeways to maximize distribution efficiency and convenience. Many of our distribution centers are situated on rail lines for efficient receipt of goods. Our manufacturing facilities produce trusses, wall panels, engineered wood, windows, pre-hung doors and custom millwork.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2019, to December 31, 2024. 12/19 12/20 12/21 12/22 12/23 12/24 Builders FirstSource, Inc. 100.00 160.61 337.31 255.33 656.99 562.50 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 S&P 600 Building Products 100.00 127.17 158.74 132.74 200.45 225.97 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 25 The information regarding securities authorized for issuance under equity compensation plans appears in our definitive proxy statement for our annual meeting of stockholders to be held on May 27, 2025, under the caption “Equity Compensation Plan Information,” which information is incorporated herein by reference.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2020, to December 31, 2025. 12/20 12/21 12/22 12/23 12/24 12/25 Builders FirstSource, Inc. 100.00 210.02 158.98 409.07 350.23 252.12 S&P 500 100.00 128.71 105.40 133.10 166.40 196.16 S&P 600 Building Products 100.00 124.83 104.38 157.63 177.70 194.02 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 26 The information regarding securities authorized for issuance under equity compensation plans appears in our definitive proxy statement for our annual meeting of stockholders to be held on May 14, 2026, under the caption “Equity Compensation Plan Information,” which information is incorporated herein by reference.
In the fourth quarter of 2024, 2,046,570 shares were repurchased and retired pursuant to share repurchase plans authorized by our board of directors. The remaining 42,590 shares presented in the table above represent shares tendered in order to meet tax withholding requirements for restricted stock units vested.
In the fourth quarter of 2025, the Company did not repurchase or retire any shares pursuant to share repurchase plans authorized by our board of directors. The 17,699 shares presented in the table above represent stock tendered in order to meet tax withholding requirements for restricted stock units vested.
Company Stock Repurchases The following table provides information with respect to our purchases of Builders FirstSource, Inc. common stock during the fourth quarter of fiscal year 2024: Period Total Number of Shares Purchased Average Price Paid per Share (including fees and taxes) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (1) October 1, 2024 — October 31, 2024 481,640 $ 191.88 478,807 $ 750,860,446 November 1, 2024 — November 30, 2024 429,106 180.82 389,349 680,880,229 December 1, 2024 — December 31, 2024 1,178,414 155.04 1,178,414 500,000,146 Total 2,089,160 $ 168.83 2,046,570 $ 500,000,146 (1) On August 6, 2024, the Company announced the board of directors’ approval of a share repurchase authorization in the amount of $1.0 billion.
Company Stock Repurchases The following table provides information with respect to our purchases of Builders FirstSource, Inc. common stock during the fourth quarter of fiscal year 2025: Period Total Number of Shares Purchased Average Price Paid per Share (including fees and taxes) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (1) October 1, 2025 — October 31, 2025 17,699 $ 121.92 — $ 500,000,000 November 1, 2025 — November 30, 2025 — — — 500,000,000 December 1, 2025 — December 31, 2025 — — — 500,000,000 Total 17,699 $ 121.92 — $ 500,000,000 (1) On April 30, 2025, the Company announced the board of directors’ termination of the prior share repurchase authorization and approval of a new share repurchase authorization of up to $500.0 million of the Company’s outstanding shares of common stock.
Census data, we have operations in 48 of the top 50 and 91 of the top 100 U.S. MSAs, as ranked by single family housing permits in 2024. Distribution centers typically include 10 to 15 useable acres of outside storage, a 45,000 square foot warehouse, 6,000 square feet of office space, and 15,000 square feet of covered storage.
Based on available 2025 U.S. Census data, we have operations in 48 of the top 50 and 94 of the top 100 U.S. CBSAs, as ranked by single family housing permits in 2025.
Added
The Company also maintains a cybersecurity insurance policy and has engaged a third-party digital forensics and incident response consultant and legal counsel on retainer . Additionally, the Company has established a comprehensive cybersecurity risk management program for third-party service providers and vendors.
Added
Our processes include: (i) pre-engagement due diligence to assess cybersecurity maturity and compliance with industry standards; (ii) contractual requirements for security controls, breach notification, and incident response protocols; (iii) ongoing monitoring and periodic security assessments throughout the vendor relationship; and (iv) escalation procedures for identified risks or incidents.
Added
Third-party cybersecurity risks are monitored continuously and integrated into the Company's overall enterprise risk management framework, with oversight by the CISO. 23 In 2025, the Company’s board of directors established a Technology Committee of the board of directors to (i) oversee the Company’s technology strategy, (ii) review the development of impactful technology; (iii) review the Company’s current IT infrastructure and (iv) support the Audit Committee, the board of directors and management in its oversight of the Company’s cybersecurity strategy.
Added
The approximate number of stockholders of record of our common stock as of February 11, 2026, was 62. We currently do not pay dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

52 edited+12 added−15 removed39 unchanged
Biggest changeThese decreases were partially offset by increases in net sales from acquisitions and increased selling days of 2.1% and 0.7%, respectively. 30 The following table shows net sales classified by major product category for the years ended December 31: 2024 2023 ($ amounts in millions) Net Sales % of Net Sales Net Sales % of Net Sales % Change Manufactured products (1) $ 3,931.6 24.0 % $ 4,669.1 27.3 % (15.8 )% Windows, doors and millwork (1) 4,226.9 25.7 % 4,310.1 25.2 % (1.9 )% Specialty building products and services 4,050.1 24.7 % 3,992.1 23.4 % 1.5 % Lumber and lumber sheet goods 4,191.9 25.6 % 4,126.0 24.1 % 1.6 % Total net sales $ 16,400.5 100.0 % $ 17,097.3 100.0 % (4.1 )% (1) Manufactured products and windows, doors and millwork are collectively referred to as total value-added products.
Biggest changeThe following table shows net sales classified by major product category for the years ended December 31: 2025 2024 ($ amounts in millions) Net Sales % of Net Sales Net Sales % of Net Sales % Change Manufactured products (1) $ 3,410.5 22.4 % $ 3,985.8 24.3 % (14.4 )% Windows, doors and millwork (1) 3,836.2 25.3 % 4,238.1 25.8 % (9.5 )% Specialty building products and services 4,068.0 26.8 % 3,907.5 23.9 % 4.1 % Lumber and lumber sheet goods 3,875.9 25.5 % 4,269.1 26.0 % (9.2 )% Total net sales $ 15,190.6 100.0 % $ 16,400.5 100.0 % (7.4 )% (1) Manufactured products and windows, doors and millwork are collectively referred to as total value-added products. 31 We experienced decreased net sales in our manufactured products category primarily due to decreased single-family housing starts and decreased multi-family activity, partially offset by an increase in net sales from acquisitions.
Despite recent tempered market conditions, we believe the housing industry remains underbuilt and that there are several meaningful trends that indicate U.S. housing demand will continue to be strong over the long-term, including the aging of housing stock and normal population growth due to immigration and birthrate exceeding death rate. 27 • Targeting Large Production Homebuilders.
Despite recent tempered market conditions, we believe the housing industry remains underbuilt and that there are several meaningful trends that indicate U.S. housing demand will continue to be strong over the long-term, including the aging of housing stock and normal population growth due to immigration and birthrate exceeding death rate. 28 • Targeting Large Production Homebuilders.
From time to time, based on market conditions and other factors and subject to compliance with applicable laws and regulations, the Company may repurchase or call our notes, repay debt, repurchase shares of our common stock or otherwise enter into transactions regarding its capital structure.
From time to time, based on market conditions and other factors and subject to compliance with applicable laws and regulations, the Company may repurchase or call our notes, repay debt, repurchase shares of our common stock or otherwise enter into transactions with respect to its capital structure.
We closely manage our working capital and operating expenses, and we pay careful attention to our logistics function and its effect on our shipping and handling costs. However, we do have significant fixed costs and declines in our customer demand could have an adverse impact on our operating results. 28 • Capital Structure.
We closely manage our working capital and operating expenses, and we pay careful attention to our logistics function and its effect on our shipping and handling costs. However, we do have significant fixed costs and declines in our customer demand could have an adverse impact on our operating results. 29 • Capital Structure.
These acquisitions further expand our market footprint and provide additional operations in our value-added product categories and are further described in Notes 3 and 16 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K.
These acquisitions further expand our market footprint and provide additional operations in our value-added product categories and are further described in Notes 3 and 15 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K.
Inherent in such fair 33 value determinations are significant assumptions relating to future cash flows, expected future revenues, expected future profitability, the discount rate, the terminal value, and our interpretation of current economic indicators and market conditions and their impact on our strategic plans and operations.
Inherent in such fair 34 value determinations are significant assumptions relating to future cash flows, expected future revenues, expected future profitability, the discount rate, the terminal value, and our interpretation of current economic indicators and market conditions and their impact on our strategic plans and operations.
Future impairment of goodwill would have the effect of decreasing our earnings or increasing our losses in such period but would not impact our current outstanding debt obligations or compliance with covenants contained in the related debt agreements. We did not have any goodwill impairments in 2024, 2023 or 2022.
Future impairment of goodwill would have the effect of decreasing our earnings or increasing our losses in such period but would not impact our current outstanding debt obligations or compliance with covenants contained in the related debt agreements. We did not have any goodwill impairments in 2025, 2024 or 2023.
We assessed our goodwill balance at December 31, 2024, using a quantitative assessment. In performing the quantitative impairment test at December 31, 2024, we developed the fair value using a discounted cash flow methodology.
We assessed our goodwill balance at December 31, 2025, using a quantitative assessment. In performing the quantitative impairment test at December 31, 2025, we developed the fair value using a discounted cash flow methodology.
Our primary focus has been on single-family residential new construction and the repair and remodel end market. However, through recent acquisitions we have expanded our operational footprint in the multi-family market, predominantly five-story and smaller, wood construction, and the light commercial market, growing our value-added components and millwork product offerings in this end market.
Our primary focus has been on single-family residential new construction and the repair and remodel end market. However, through recent acquisitions completed over the past five years, we have expanded our operational footprint in the multi-family market, predominantly five-story and smaller, wood construction, and the light commercial market, growing our value-added components and millwork product offerings in this end market.
Liquidity Our liquidity at December 31, 2024, was $1.8 billion, which consists of net borrowing availability under the Revolving Facility and cash on hand. Our level of indebtedness results in significant interest expense and could have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions.
Liquidity Our liquidity at December 31, 2025, was $1.7 billion, which consists of net borrowing availability under the Revolving Facility and cash on hand. Our level of indebtedness results in significant interest expense and could have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions.
Our 5.00% unsecured senior notes due 2030 (“5.00% 2030 notes”), 4.25% senior unsecured notes due 2032 (“4.25% 2032 notes,”), 6.375% senior unsecured notes due 2032 (“6.375% 2032 notes”), and 6.375% 2034 notes bear interest at a fixed rate, and therefore our interest expense related to these notes would not be affected by an increase in market interest rates.
Each of our 4.25% senior unsecured notes due 2032 (“4.25% 2032 notes,”), 6.375% 2034 notes, 6.75% 2035 notes, 6.375% senior unsecured notes due 2032 (“6.375% 2032 notes”), and 5.00% unsecured senior notes due 2030 (“5.00% 2030 notes”), bear interest at a fixed rate, and therefore our interest expense related to these notes would not be affected by an increase in market interest rates.
Consolidated Cash Flows A discussion regarding our consolidated cash flows for the year ended December 31, 2024, compared to the year ended December 31, 2023, is presented below.
Consolidated Cash Flows A discussion regarding our consolidated cash flows for the year ended December 31, 2025, compared to the year ended December 31, 2024, is presented below.
A discussion regarding our consolidated cash flows for the year ended December 31, 2023, compared to the year ended December 31, 2022, can be found under Item 7 of Part II of our annual report on Form 10-K filed with the SEC on February 22, 2024. 2024 Compared with 2023 Cash provided by operating activities was $1.9 billion in 2024 compared to cash provided by operating activities of $2.3 billion in 2023.
A discussion regarding our consolidated cash flows for the year ended December 31, 2024, compared to the year ended December 31, 2023, can be found under Item 7 of Part II of our annual report on Form 10-K filed with the SEC on February 20, 2025. 2025 Compared with 2024 Cash provided by operating activities was $1.2 billion in 2025 compared to cash provided by operating activities of $1.9 billion in 2024.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022, can be found under Item 7 of Part II of our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024. 2024 Compared with 2023 The following table sets forth the percentage relationship to net sales of certain costs, expenses and income items for the years ended December 31: 2024 2023 Net sales 100.0 % 100.0 % Cost of sales 67.2 % 64.8 % Gross margin 32.8 % 35.2 % Selling, general and administrative expenses 23.1 % 22.4 % Income from operations 9.7 % 12.8 % Interest expense, net 1.3 % 1.1 % Income tax expense 1.9 % 2.6 % Net income 6.5 % 9.1 % Net Sales.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, can be found under Item 7 of Part II of our annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 20, 2025. 2025 Compared with 2024 The following table sets forth the percentage relationship to net sales of certain costs, expenses and income items for the years ended December 31: 2025 2024 Net sales 100.0 % 100.0 % Cost of sales 69.6 % 67.2 % Gross margin 30.4 % 32.8 % Selling, general and administrative expenses 25.2 % 23.1 % Income from operations 5.2 % 9.7 % Interest expense, net 1.8 % 1.3 % Income tax expense 0.5 % 1.9 % Net income 2.9 % 6.5 % Net Sales.
Cash used in financing activities was $1.1 billion in 2024 which consisted primarily of $1.5 billion for repurchases of common stock and $0.5 billion net payments on the Revolving Facility, offset by a net $1.0 billion received for the issuance of the 6.375% 2034 notes.
Cash used in financing activities was $1.1 billion for 2024 which consisted primarily of $1.5 billion for repurchases of common stock and $0.5 billion net payments on the Revolving Facility, offset by a net $1.0 billion received for the issuance of the 6.375% senior unsecured notes due 2034 (“6.375% 2034 notes”).
Significant information and assumptions utilized in estimating future cash flows for quantitative goodwill impairment analyses include projections of revenue growth utilizing publicly available industry information such as lumber commodity prices and housing start forecasts developed by industry forecasters, including the NAHB.
Significant information and assumptions utilized in estimating future cash flows for quantitative goodwill impairment analyses include projections of revenue growth utilizing publicly available industry information, such as lumber commodity prices and housing start forecasts developed by the Industry Forecast Composite.
Excess availability must equal or exceed a minimum specified amount, currently $171.4 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 December 31, 2024.
Excess availability must equal or exceed a minimum specified amount, currently $165.0 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 December 31, 2025.
At December 31, 2024, our goodwill balance was $3.7 billion, representing 34.8% of our total assets. We test goodwill for impairment in the fourth quarter of each year or at any other time when impairment indicators exist.
At December 31, 2025, our goodwill balance was $4.1 billion, representing 36.8% of our total assets. We test goodwill for impairment in the fourth quarter of each year or at any other time when impairment indicators exist.
As of December 31,2024, the Company had $500.0 million authorization remaining under its current share repurchase program. Debt Transactions On February 29, 2024, the Company completed a private offering of $1.0 billion in aggregate principal amount of 6.375% senior unsecured notes due 2034 (“6.375% 2034 notes”) at an issue price equal to 100% of par value.
As of December 31, 2025, the Company had $500.0 million authorization remaining under its current share repurchase program. Debt Transactions On May 8, 2025, the Company completed a private offering of $750.0 million in aggregate principal amount of 6.750% senior unsecured notes due 2035 (“6.75% 2035 notes”), at an issue price equal to 100% of par value.
Income Tax Expense. We recorded income tax expense of $309.6 million during the year ended December 31, 2024, compared to income tax expense of $443.6 million during the year ended December 31, 2023, a decrease of $134.0 million, driven by a decrease in income before income taxes in the current period.
Income Tax Expense. We recorded income tax expense of $77.2 million during the year ended December 31, 2025, compared to income tax expense of $309.6 million during the year ended December 31, 2024, a decrease of $232.4 million, driven by a decrease in income before income taxes in the current period.
Risk Factors of this annual report on Form 10-K and “Cautionary Statement” contained in Item 1. Business of this annual report on Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. OVERVIEW We are a leading supplier and manufacturer of building materials, manufactured components and construction services to professional contractors, sub-contractors and consumers.
Risk Factors of this annual report on Form 10-K and “Cautionary Statement” contained in Item 1. Business of this annual report on Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. OVERVIEW We are a leading provider of building materials for professional builders in new residential construction and repair and remodeling.
Our manufactured products include our factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, as well as engineered wood that we design, cut, and assemble for each home. We also assemble interior and exterior doors into pre-hung units.
Our leading network of strategically located manufacturing facilities produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, as well as engineered wood that we design and cut specifically for each home. We also assemble interior and exterior doors into pre-hung units for easy installation.
Economic changes both nationally and locally in our markets impact our financial performance. The building products supply industry is highly dependent upon new home construction and, to a lesser extent, repair and remodel activities, and is subject to cyclical market changes.
The building products supply industry is highly dependent upon new home construction and, to a lesser extent, repair and remodel activities, and is subject to cyclical market changes.
Borrowings under the Revolving Facility bear interest at either a base rate or secured overnight financing rate (“SOFR”), plus, in each case, an applicable margin. Therefore, we are exposed to interest rate risk under the Revolving Facility. We did not have any outstanding borrowings on the Revolving Facility as of December 31, 2024.
Changes in market interest rates could also affect our interest expense. Borrowings under the Revolving Facility bear interest at either a base rate or Secured Overnight Financing Rate (“SOFR”), plus, in each case, an applicable margin. We did not have any outstanding borrowings on the Revolving Facility as of December 31, 2025.
As various current market dynamics, including inflationary pressures, mortgage rates and housing affordability shift, industry forecasters, including the National Association of Home Builders (“NAHB”), expect to see housing demand increase in the near-term.
As various current market dynamics, including inflationary pressures, mortgage rates and housing affordability shift, a composite of industry forecasters, including the National Association of Home Builders, John Burns Research and Consulting, and Zonda Homes (collectively, the “Industry Forecast Composite”) expect to see housing demand decrease in the near-term.
Shortening cycle times from start to completion is a key imperative of the homebuilders during periods of strong consumer demand. As the availability of skilled construction labor remains limited, we continue to see the demand for prefabricated components increasing within the residential new construction market. • Economic Conditions.
Shortening construction cycle times is a critical priority for homebuilders during periods of strong consumer demand. As the availability of skilled construction labor remains limited, we continue to see the demand for prefabricated components increasing within the residential new construction market. • Economic Conditions. Economic changes both nationally and locally in our markets impact our financial performance.
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 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.
Under share repurchase programs authorized by the board of directors since August 2021, the Company has repurchased a total of 95.9 million shares of common stock, or 46.5% of the Company’s total shares outstanding, at an average price of $79.56, inclusive of fees and taxes, including 8.9 million shares of common stock at an average price of $170.74, inclusive of fees and taxes, in 2024.
Under share repurchase programs authorized by the board of directors since August 2021, the Company has repurchased a total of 99.3 million shares of common stock, or 48.1% of the Company’s total shares outstanding, at an average price of $80.90, inclusive of fees and taxes, including 3.4 million shares of common stock at an average price of $118.65, inclusive of fees and taxes, in 2025.
We also offer digital solutions through our Paradigm subsidiary, including drafting, estimating, quoting, and virtual home design services. We group our building products into four product categories: • Manufactured Products. Manufactured products consist of wood floor and roof trusses, wall panels, engineered wood and our Ready-Frame ® framing system. • Windows, Doors and Millwork.
We group our building products into four product categories: • Manufactured Products. Manufactured products consist of wood floor and roof trusses, wall panels, engineered wood, our Ready-Frame ® framing system, and manufactured and modular homes. • Windows, Doors and Millwork.
Availability under the Revolving Facility is determined by a borrowing base. Our borrowing base consists of trade accounts receivable, inventory, other receivables which include progress billings and credit card receivables, and qualified cash that all meet specific criteria contained within the credit agreement, minus agent specified reserves.
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.
The Company operates approximately 590 locations in 43 states across the U.S. 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. All of our segments have similar customers, products and services, and distribution methods.
We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. The Company operates approximately 585 locations in 43 states across the U.S. 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.
Net excess borrowing availability is equal to the maximum borrowing amount minus outstanding borrowings and letters of credit. 31 The following table shows our borrowing base and excess availability as of December 31, 2024, and 2023: December 31, 2024 December 31, 2023 (in millions) Accounts receivable availability $ 721.9 $ 923.8 Inventory availability 891.7 920.8 Other receivables availability 51.5 65.1 Gross availability 1,665.1 1,909.7 Less: Agent reserves (39.3 ) (39.8 ) Plus: Cash in qualified accounts 88.5 13.3 Borrowing base 1,714.3 1,883.2 Aggregate revolving commitments 1,800.0 1,800.0 Maximum borrowing amount (lesser of borrowing base and aggregate revolving commitments) 1,714.3 1,800.0 Less: Outstanding borrowings — (464.0 ) Letters of credit (83.3 ) (70.3 ) Net excess borrowing availability on revolving facility $ 1,631.0 $ 1,265.7 As of December 31, 2024, we had no outstanding borrowings under our Revolving Facility and our net excess borrowing availability was $1.6 billion after being reduced by outstanding letters of credit of $0.1 billion.
Net excess borrowing availability is equal to the maximum borrowing amount minus outstanding borrowings and letters of credit. 32 The following table shows our borrowing base and excess availability as of December 31, 2025, and 2024: December 31, 2025 December 31, 2024 (in millions) Accounts receivable availability (1) $ 686.2 $ 773.4 Inventory availability 804.2 891.7 Gross availability 1,490.4 1,665.1 Less: Agent reserves (42.6 ) (39.3 ) Plus: Cash in qualified accounts 159.1 88.5 Borrowing base 1,606.9 1,714.3 Aggregate revolving commitments 2,200.0 1,800.0 Maximum borrowing amount (lesser of borrowing base and aggregate revolving commitments) 1,606.9 1,714.3 Less: Outstanding borrowings — — Letters of credit (79.6 ) (83.3 ) Net excess borrowing availability on revolving facility $ 1,527.3 $ 1,631.0 (1) The prior year amounts have been conformed to current year presentation.
Company Shares Repurchases On February 21, 2024, the Company’s board of directors authorized the repurchase of up to $1.0 billion of the Company’s outstanding shares of common stock, inclusive of the approximately $200 million remaining outstanding in the prior share repurchase plan authorized in April 2023. Share repurchases under this program were completed in May 2024.
Company Shares Repurchases 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.
Our capital resources at December 31, 2024, consist of cash on hand and borrowing availability under our Revolving Facility. Our Revolving Facility will be primarily used for working capital, general corporate purposes, and funding capital expenditures and growth opportunities. In addition, we may use the Revolving Facility to assist debt consolidation.
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.
Due to the similar economic characteristics, categories of products, distribution methods and customers, our operating segments are aggregated into one reportable segment. We offer an integrated solution to our customers by providing manufacturing, supply, and installation of a full range of structural and related building products.
All of our segments have similar customers, products and services, and distribution methods. Due to the similar economic characteristics, categories of products, distribution methods and customers, our operating segments are aggregated into one reportable segment.
A composite of third-party sources, including the NAHB, are forecasting 1.4 million U.S. total housing starts and 1.0 million U.S. single-family housing starts for 2025, which are relatively flat from 2024. In addition, in its September 2024 semi-annual forecast, the HIRI forecasted sales in the professional repair and remodel end market to increase 3.2% in 2025 compared to 2024.
For the year ended December 31, 2026, the Industry Forecast Composite is forecasting U.S. total housing starts and U.S. single-family housing starts to remain relatively flat compared to 2025. In addition, in its September 2025 semi-annual forecast, the Home Improvement Research Institute forecasted sales in the professional repair and remodel end market to increase 2.9% in 2026 compared to 2025.
This decrease in expenses was primarily due to decreased variable compensation costs related to decreased sales and profitability, and reduced intangible amortization expense, partially offset by additional operating expenses from locations acquired within the last twelve months and asset write-offs. As a percentage of net sales, selling, general and administrative expenses increased to 23.1% from 22.4% in 2023.
This increase in expense was primarily due to additional operating expenses from locations acquired within the last twelve months and our ongoing ERP system implementation, partially offset by lower variable compensation due to decreased net sales and the absence of prior year asset write-offs.
The decrease in cash provided by operating activities was largely the result of a decrease in net income in 2024 of $0.5 billion. 32 For the year ended December 31, 2024, the Company used $42.4 million more cash to invest compared to the prior year ended December 31, 2023, primarily due to $97.8 million more spent on acquisitions, offset by $63.0 million less as a net investment in property, plant and equipment.
The decrease in cash provided by operating activities was largely the result of a decrease in net income in 2025 of $0.6 billion. 33 For the year ended December 31, 2025, cash used in investing activities increased $0.8 billion compared to the prior year ended December 31, 2024, primarily due to using an additional $0.8 billion of cash for acquisitions.
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 expand. RESULTS OF OPERATIONS A discussion regarding our financial condition and results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, is presented below.
RESULTS OF OPERATIONS A discussion regarding our financial condition and results of operations for the year ended December 31, 2025, compared to the year ended December 31, 2024, is presented below.
We believe the long-term outlook for the housing industry is positive and that the housing industry remains underbuilt due to growth in the underlying demographics compared to historical new construction levels. However, uncertainty around interest rates and inflation may continue to pressure near-term housing industry demand as homes are less affordable for consumers, investors and builders.
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.
The discount rate used is intended to reflect the weighted average cost of capital for a potential market participant and includes all risks of ownership and the associated risks of realizing the stream of projected future cash flows. Decreasing the long-term growth EBITDA multiple or increasing the discount rate would not have changed the results of our impairment testing.
The discount rate used is intended to reflect the weighted average cost of capital for a potential market participant and includes all risks of ownership and the associated risks of realizing the stream of projected future cash flows. At December 31, 2025, the fair values of each of our reporting units were substantially in excess of their respective carrying amounts.
Short-term changes in the cost of these materials and the related in-bound freight costs, some of which are subject to significant fluctuations, are sometimes, but not always, passed on to our customers. Delays in our ability to pass on material price increases to our customers can adversely impact our operating results. 34
We purchase certain materials, including lumber products, which are then sold to customers, as well as used as direct production inputs for our manufactured products that we deliver. Short-term changes in the cost of these materials and the related in-bound freight costs, some of which are subject to significant fluctuations, are sometimes, but not always, passed on to our customers.
We expect our 2025 capital expenditures to be in the range of $350 million to $450 million primarily related to rolling stock, equipment and facility expansion and improvements to support our operations.
Historically, capital expenditures have, for the most part, remained at relatively low levels in comparison to the operating cash flows generated during the corresponding periods. We expect our 2026 capital expenditures to be in the range of $250 million to $300 million primarily related to rolling stock, equipment and facility expansion and improvements to support our operations.
Our effective tax rate was 22.3% in 2024 which was relatively flat compared to the 22.4% in 2023. LIQUIDITY AND CAPITAL RESOURCES Our primary capital requirements are to fund working capital needs and operating expenses, meet required interest and principal payments, and to fund capital expenditures and potential future growth opportunities.
LIQUIDITY AND CAPITAL RESOURCES Our primary capital requirements are to fund working capital needs and operating expenses, meet required interest and principal payments, and to fund capital expenditures and potential future growth opportunities. Our capital resources at December 31, 2025, consist of cash on hand and borrowing availability under our Revolving Facility.
Cash used in financing activities was $1.7 billion for 2023 which consisted primarily of $1.8 billion in repurchases of common stock, partially offset by $0.2 billion in net borrowings on the Revolving Facility. These debt transactions are described in Note 8 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K.
These transactions are described further in Note 8 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K.
The Revolving Facility also assesses variable commitment and outstanding letter of credit fees based on quarterly average loan utilization. We purchase certain materials, including lumber products, which are then sold to customers as well as used as direct production inputs for our manufactured products that we deliver.
The Revolving Facility also assesses variable commitment and outstanding letter of credit fees based on quarterly average loan utilization.
This increase was primarily due to decreased cost leverage on lower net sales during the period. Interest Expense, Net. Interest expense, net was $207.7 million in 2024, an increase of $15.6 million from 2023. Interest expense increased primarily due to higher debt balances and average interest rates in 2024 compared to 2023, partially offset by interest income received in 2024.
As a percentage of net sales, selling, general and administrative expenses increased to 25.2% from 23.1% in 2024. This increase was primarily attributable to reduced operating leverage during the period. Interest Expense, Net. Interest expense, net was $273.9 million in 2025, an increase of $66.2 million from 2024. Interest expense increased primarily due to higher average debt balances.
Census Bureau, actual U.S. total housing starts for the year ended December 31, 2024, were 1.4 million, a decrease of 3.9% compared to the year ended December 31, 2023. Actual U.S. single-family housing starts for the year ended December 31, 2024, were 1.0 million, an increase of 6.5% compared to the year ended December 31, 2023.
Census Bureau as of the date of this annual report on Form 10-K. The Industry Forecast Composite is forecasting 1.3 million U.S. total housing starts and 925 thousand U.S. single-family housing starts for the year ended December 31, 2025, which are decreases of 3.7% and 8.7%, respectively, compared to the year ended December 31, 2024.
RECENT DEVELOPMENTS Business Combinations During 2024 we completed a number of acquisitions for a combined $345.4 million purchase price, net of cash acquired, including the acquisitions of (i) Quality Door & Millwork, Inc. (“Quality Door”), (ii) Hanson Truss Components, Inc. (“Hanson Truss”), (iii) RPM Wood Products, Inc. (“RPM”), (iv) Schoeneman Bros.
RECENT DEVELOPMENTS Business Combinations During 2025, we completed a number of acquisitions for a combined $1.1 billion purchase price, net of cash acquired, including the acquisitions of (i) Alpine Lumber Company (“Alpine Lumber”), (ii) O.C. Cluss Lumber Company (“O.C. Cluss”), (iii) Truckee Tahoe Lumber (“Truckee Tahoe”), (iv) St. George Truss Co. (“St.
We experienced decreased net sales in our manufactured products categories primarily due to a continued normalization in multi-family and commodity deflation. 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. Gross Margin.
Our windows, doors, and millwork net sales declined primarily due to decreased single-family housing starts. Our lumber and lumber sheet goods category decreased primarily due to lower single-family housing starts and commodity price deflation, partially offset by an increase in net sales from acquisitions.
Gross margin decreased $0.6 billion to $5.4 billion due to decreased sales. Our gross margin percentage decreased to 32.8% in 2024 from 35.2% in 2023, a 2.4% decrease. This decrease was attributable to single-family and multi-family margin normalization. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $48.2 million, or 1.3%.
For the comparable period, specialty building products and services increased primarily due to an increase in net sales from acquisitions. Gross Margin. Gross margin decreased $0.8 billion to $4.6 billion due to decreased net sales. Our gross margin percentage decreased to 30.4% in 2025 from 32.8% in 2024, a 2.4% decrease.
Net sales for the year ended December 31, 2024, were $16.4 billion, a 4.1% decrease from net sales of $17.1 billion for 2023.
Net sales for the year ended December 31, 2025, were $15.2 billion, a 7.4% decrease from net sales of $16.4 billion for 2024. Core organic sales decreased net sales by 10.3%, primarily due to a below-normal starts environment, while commodity price deflation and one fewer selling day decreased net sales by another 1.3% and 0.4%, respectively.
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Additionally, we supply our customers with a broad offering of professional grade building products not manufactured by us, such as dimensional lumber and lumber sheet goods, various window, door and millwork lines along with other various building products. Our full range of construction-related services includes professional installation, turn-key framing and shell construction, and spans all of our product categories.
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Additionally, we distribute a wide range of building products, including lumber, sheet goods, windows, doors, millwork, and specialty items. Our services, which vary by market, include professional installation, turnkey framing, and shell construction. Supported by the latest construction innovations and digital solutions, we help drive greater efficiency across homebuilding.
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Company (“Schoeneman”), (v) TRSMI, LLC (“TRSMI”), (vi) Western Truss & Components (“Western Truss”), (vii) CRi SoCal (“CRi”), (viii) Wyoming Millwork Co. (“Wyoming Millwork”), (ix) Sunrise Wood Designs, LLC (“Sunrise Wood Designs”), (x) Reno Truss, Inc. (“Reno Truss”), (xi) High Mountain Door and Trim, Inc.
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George Truss”), (v) Stately Las Vegas Holdings, LLC (“Stately Las Vegas”), (vi) Rystin Construction, Inc (“Rystin”), (vii) Lengefeld Lumber Co., LP (“Lengefeld Lumber”), and (viii) Pleasant Valley Homes, Inc (“Pleasant Valley”). On January 2, 2026, we completed the acquisition of Premium Building Components (“Premium Building”). Premium Building provides truss and wall panel products, serving customers in eastern New York.
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(“High Mountain”), (xii) Douglas Lumber, Kitchens and Home Center (“Douglas Lumber”), and (xiii) Kleet Lumber (“Kleet Lumber”). On January 2, 2025, we completed our previously announced acquisition of Alpine Lumber Company, the largest independently operated supplier of building materials in Colorado and northern New Mexico.
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The net proceeds from the offering were used to repay indebtedness outstanding under the Revolving Facility. On May 20, 2025, the Company amended the Revolving Facility to increase the existing revolving commitments of $1.8 billion with new revolving commitments of $2.2 billion and to extend the maturity date to May 20, 2030.
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Alpine serves the Colorado Front Range, western Colorado and northern New Mexico through its 21 operating locations and provides a broad product range, including prefabricated trusses and wall panels and millwork. On February 3, 2025, we completed the acquisition of O.C. Cluss Lumber, a lumber and building supplies provider in southwestern Pennsylvania, western Maryland and northern West Virginia.
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Market Information Our common stock is dual listed on the New York Stock Exchange and the NYSE Texas under the trading symbol “BLDR”. The listing and trading of the common stock on the NYSE Texas commenced on August 12, 2025. 30 CURRENT OPERATING CONDITIONS AND OUTLOOK Full year 2025 housing starts have not been published by the U.S.
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On August 5, 2024, the Company’s board of directors authorized a new repurchase plan of up to $1.0 billion of the Company’s outstanding shares of common stock.
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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 grow and capture market share as industry conditions improve in the long term.
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The net proceeds from the offering were used to pay related transaction fees and expenses, repay indebtedness outstanding under the Revolving Facility and for general corporate purposes. This transaction is described further in Note 8 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K.
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These decreases were partially offset by an increase in net sales from acquisitions of 4.6%.
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Executive Officer Transition On September 19, 2024, the Company’s board of directors appointed Peter Jackson as the Company’s next President & Chief Executive Officer and member of its board of directors, effective November 6, 2024. Mr.
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This decrease was primarily driven by a below-normal starts environment. Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $41.7 million, or 1.1%.
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Jackson previously served as Executive Vice President and Chief Financial Officer of the company since January 2021 and as Senior Vice President and Chief Financial Officer since November 2016. Mr. Jackson succeeded Dave Rush, who served as President and Chief Executive Officer since November 2022 and retired after 25 years of dedicated service to the Company, effective November 6, 2024.
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Our effective tax rate was 15.1% in 2025, a decrease compared to the 22.3% in 2024, primarily related to the benefit of income tax credits, impact of state income taxes and discrete tax adjustments, partially offset by permanent differences, relative to a decreased income before income taxes.
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Mr. Rush will remain on the Company’s 29 board of directors and continue as a special advisor to the Company to ensure a smooth transition. Additionally, the Company’s board of directors appointed Pete Beckmann, Senior Vice President, as Chief Financial Officer to succeed Mr. Jackson, effective November 6, 2024. Mr.
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There is no impact on gross availability or net excess borrowing availability on the Revolving Facility as previously reported. As of December 31, 2025, we had no outstanding borrowings under our Revolving Facility, and our net excess borrowing availability was $1.5 billion after being reduced by outstanding letters of credit of $0.1 billion.
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Beckmann previously served as Senior Vice President, Financial Planning &Analysis of the Company since January 2021 and has been with the Company and legacy companies since 1999, serving in finance roles of increasing responsibility. CURRENT OPERATING CONDITIONS AND OUTLOOK According to the U.S.
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Cash provided by financing activities was $0.3 billion in 2025 which consisted primarily of a net $0.7 billion received for the issuance of the 6.75% 2035 notes, offset by $0.4 billion for repurchases of common stock.
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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.
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These debt transactions are described in Note 8 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K. Capital Expenditures Capital expenditures vary depending on prevailing business factors, including current and anticipated market conditions.
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Net sales decreased primarily as a result of a core organic sales decrease of 5.1% due to a continued normalization in the multi-family customer segment and declines in the single-family customer segment as home size and complexity decrease, while commodity price deflation decreased net sales by another 1.8%.
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Delays in our ability to pass on material price increases to our customers can adversely impact our operating results. 35
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Capital Expenditures Capital expenditures vary depending on prevailing business factors, including current and anticipated market conditions. Historically, capital expenditures have, for the most part, remained at relatively low levels in comparison to the operating cash flows generated during the corresponding periods.
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At December 31, 2024, the fair values of each of our reporting units were substantially in excess of their respective carrying amounts.
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Changes in market interest rates could also affect our interest expense.