Name: Builders FirstSource Inc. (NYSE:BLDR) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Builders FirstSource Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income	2,749,369)	1,725,416)	313,537)	221,809)	205,191)
Depreciation and amortization	497,140)	547,352)	116,566)	100,038)	97,906)
Amortization of debt discount, premium and issuance costs	4,837)	3,869)	3,508)	3,880)	4,642)
(Gain) loss on extinguishment of debt	27,387)	3,027)	6,700)	8,189)	(3,170)
Deferred income taxes	(92,461)	(34,573)	16,614)	50,994)	51,823)
Stock-based compensation expense	31,337)	31,486)	17,022)	12,239)	14,420)
Bad debt expense	38,921)	20,451)	4,720)	—)	—)
Net gain on sales of assets and asset impairments	(1,965)	(32,421)	(1,067)	(949)	(1,393)
Receivables	381,223)	(474,362)	(251,632)	45,687)	(9,221)
Inventories	271,889)	(282,165)	(220,101)	44,202)	(5,425)
Contract assets	24,051)	(103,326)	(12,631)	(2,898)	—)
Other current assets	15,173)	(33,489)	(19,743)	4,674)	(10,356)
Other assets and liabilities	15,189)	(1,155)	50,370)	1,611)	5,637)
Accounts payable	(314,004)	191,885)	160,947)	4,070)	(89,392)
Accrued liabilities	(15,766)	91,419)	55,361)	7,004)	22,168)
Contract liabilities	(33,089)	90,135)	19,896)	3,496)	—)
Changes in assets and liabilities, net of assets acquired and liabilities assumed	344,666)	(521,058)	(217,533)	107,846)	(86,589)
Adjustments to reconcile net income to net cash provided by operating activities	849,862)	18,133)	(53,470)	282,237)	77,639)
Net cash provided by operating activities	3,599,231)	1,743,549)	260,067)	504,046)	282,830)
Cash used for acquisitions, net of cash acquired	(628,014)	(1,206,471)	(32,643)	(92,855)	—)
Proceeds from divestiture of business	—)	76,162)	—)	—)	—)
Purchases of property, plant and equipment	(340,152)	(227,891)	(112,082)	(112,870)	(101,411)
Proceeds from sale of property, plant and equipment	10,687)	13,560)	8,500)	6,545)	4,753)
Net cash used in investing activities	(957,479)	(1,344,640)	(136,225)	(199,180)	(96,658)
Borrowings under revolving credit facility	5,881,000)	3,125,000)	891,000)	1,040,000)	1,662,000)
Repayments under revolving credit facility	(6,205,000)	(2,612,000)	(843,000)	(1,192,000)	(1,833,000)
Proceeds from long-term debt and other loans	1,001,500)	1,000,000)	895,625)	478,375)	3,818)
Repayments of long-term debt and other loans	(616,222)	(554,677)	(618,542)	(610,834)	(65,312)
Payments of debt extinguishment costs	(20,672)	(4,950)	(22,686)	(2,301)	(134)
Payments of loan costs	(16,797)	(19,450)	(13,800)	(8,618)	—)
Exercise of stock options	589)	726)	1,424)	4,873)	3,945)
Repurchase of common stock	(2,628,308)	(1,714,761)	(4,153)	(10,392)	(4,895)
Net cash provided by (used in) financing activities	(2,603,910)	(780,112)	285,868)	(300,897)	(233,578)
Net change in cash and cash equivalents	37,842)	(381,203)	409,710)	3,969)	(47,406)
Cash and cash equivalents at beginning of period	42,603)	423,806)	14,096)	10,127)	57,533)
Cash and cash equivalents at end of period	80,445)	42,603)	423,806)	14,096)	10,127)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial data indicates a period of exponential growth in profitability and operating cash generation between 2018 and 2022. Net income rose from 205.2 million USD in 2018 to 2.75 billion USD in 2022, a trajectory mirrored by net cash provided by operating activities, which increased from 282.8 million USD to 3.6 billion USD over the same period. This alignment suggests high earnings quality, as the increase in reported profits is supported by actual cash inflows from operations.

Operating Performance and Cash Generation: A significant acceleration in cash flow is observed starting in 2021, with operating cash flow jumping from 260.1 million USD in 2020 to 1.74 billion USD in 2021, and further increasing to 3.6 billion USD in 2022. This growth was supported by a substantial increase in depreciation and amortization expenses, which peaked at 547.4 million USD in 2021, reflecting a larger asset base.
Investment and Expansion Strategy: Investing activities are characterized by aggressive acquisition spending and steady capital expenditures. Cash used for acquisitions peaked in 2021 at 1.21 billion USD, with an additional 628 million USD spent in 2022. Simultaneously, purchases of property, plant, and equipment showed a consistent upward trend, rising from 101.4 million USD in 2018 to 340.2 million USD in 2022, indicating a sustained investment in physical infrastructure.
Financing and Capital Allocation: A pivot in capital allocation is evident in the later years of the period. While the company utilized revolving credit facilities for liquidity—with borrowings of 5.88 billion USD and repayments of 6.21 billion USD in 2022—there was a dramatic increase in shareholder returns. Repurchases of common stock, which were minimal between 2018 and 2020, surged to 1.71 billion USD in 2021 and 2.63 billion USD in 2022.
Working Capital Dynamics: Working capital exhibited significant volatility. In 2020 and 2021, there were substantial cash outflows related to receivables and inventories, suggesting a build-up of assets to support growth or manage supply chain constraints. However, 2022 saw a reversal of this trend, with positive cash impacts from receivables (381.2 million USD) and inventories (271.9 million USD), indicating a more efficient conversion of assets into cash or a strategic reduction in stock levels.

Overall, the transition from 2018 to 2022 reflects a shift from a steady-state operation to a high-growth phase characterized by aggressive acquisitions and a subsequent move toward returning massive amounts of excess liquidity to shareholders via stock buybacks.

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