Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes contained in Item 8. Financial Statements and Supplementary Data of this annual report on Form 10-K. See “Risk Factors” contained in Item 1A. 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. 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. 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.
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. 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.
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. Windows and doors are comprised of the manufacturing, assembly, and distribution of windows and the assembly and distribution of interior and exterior door units. Millwork includes interior trim and custom features that we manufacture, such as intricate mouldings, stair parts, and columns.
Specialty Building Products and Services. Specialty building products and services consist of various products, including vinyl, composite and wood siding, exterior trim, metal studs, cement, roofing, insulation, wallboard, ceilings, cabinets, and hardware. This category also includes services such as turn-key framing, shell construction, design assistance and professional installation of products spanning all of our product categories. We also offer software products through our Paradigm subsidiary, including drafting, estimating, quoting, and virtual home design services, which provide digital solutions to retailers, distributors, manufacturers and homebuilders that help them boost sales, reduce costs, and become more competitive.
Lumber and Lumber Sheet Goods. Lumber and lumber sheet goods include dimensional lumber, plywood, and OSB products used in on-site house framing.
Our operating results are dependent on the following trends, strategies, events and uncertainties, some of which are beyond our control:
Homebuilding Industry and Market Competition. Our business is driven primarily by the residential new construction market and the residential repair and remodel market, which are in turn dependent upon a number of factors, including demographic trends, interest rates, consumer confidence, employment rates, housing affordability, household formation, land development costs, the availability of skilled construction labor, rising inflationary pressures, mortgage markets and the health of the economy. Many factors have impacted and may continue to impact our sales and gross margins, including continued consolidation within the building products supply industry, increased competition for homebuilder business, supply chain constraints and cyclical fluctuations in commodity prices. Moreover, our industry remains highly fragmented and competitive, and we will continue to face significant competition from local and regional suppliers. 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. 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.
Targeting Large Production Homebuilders. The homebuilding industry continues to undergo consolidation, and the larger homebuilders continue to increase their market share. We expect that trend to continue as larger homebuilders have better liquidity and land positions relative to the smaller, less capitalized homebuilders. Our focus is on maintaining relationships and market share with these customers while balancing the competitive pressures we face in servicing large homebuilders with certain profitability expectations. Additionally, we continue to focus on expanding our custom homebuilder base while maintaining acceptable credit standards.
Multi-family and Light Commercial Business. 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. We will continue to identify opportunities for profitable growth in these areas.
Repair and remodel end market . While influenced by housing starts to a lesser degree than the homebuilding market, the repair and remodel market is still dependent upon some of the same factors, including demographic trends, interest rates, consumer confidence, employment rates, the health of the economy and home financing markets. As a result of these pressures, we may experience reduced sales demand, challenges in the supply chain, increased margin pressures and/or increased operating costs in this area of our business. We expect that our ability to remain competitive in this space will depend on our continued ability to provide a high level of customer service coupled with a broad product offering.
Use of Prefabricated Components. Homebuilders are increasingly using prefabricated components in order to realize increased efficiency, overcome skilled construction labor shortages and improve quality. 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. 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. Our operations are subject to fluctuations arising from changes in supply and demand, national and local economic conditions, labor costs and availability, competition, government regulation, trade policies (including with respect to tariffs on imported goods), inflation and other factors that affect the homebuilding industry, such as demographic trends, interest rates, housing starts, the high cost of land development, employment levels, consumer confidence, and the availability of credit to homebuilders, contractors, and homeowners. Disruptions and uncertainties as a result of a number of unforeseen environmental, social, economic or other factors, may have a significant impact on our future operating results.
Housing Affordability. The affordability of housing can be a key driver in demand for our products. Home affordability is influenced by a number of economic factors, such as the level of employment, consumer confidence, consumer income, supply of houses, the availability of financing and interest rates. Changes in the inventory of available homes and other economic factors relative to home prices could result in changes to the affordability of homes. As a result, homebuyer demand may shift toward smaller or larger homes creating fluctuations in demand for our products.
Cost and/or Availability of Materials. Prices of building materials, including wood products, are subject to cyclical market fluctuations, which may adversely impact operating income when prices rapidly rise or fall within a relatively short period of time. We purchase materials which are then sold to customers as well as used as direct production inputs for our manufactured and prefabricated products. Short-term changes in the cost and/or availability of these materials, some of which are subject to significant fluctuations, are often passed on to our customers, but our pricing quotation periods and market competition may limit our ability to pass on such price changes. We may also be limited in our ability to pass on increases on in-bound freight costs on our products. We may also experience challenges sourcing suitable products for our customers and may be forced to provide alternative materials as substitution for contracted orders. Our inability to pass on material price increases to our customers could adversely impact our operating results.
Controlling Expenses. Another important aspect of our strategy is controlling costs and striving to be a low total-cost building materials supplier in the markets we serve. 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.
Capital Structure. We strive to optimize our capital structure to ensure that our financial needs are met in light of economic conditions, business activities, organic investments, opportunities for growth through acquisition and the overall risk characteristics of our underlying assets. In addition to these factors, we also evaluate our capital structure on the basis of our leverage ratio, our liquidity position, our debt maturity profile, our market capitalization, and market interest rates. As such, we may enter into various debt or equity transactions to appropriately manage and optimize our capital structure and liquidity needs.
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. 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.
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.
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.
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. 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. 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.
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. 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.
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.
CURRENT OPERATING CONDITIONS AND OUTLOOK
Full year 2025 housing starts have not been published by the U.S. 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. 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.
We believe the housing industry’s long-term outlook is positive and that it remains underbuilt due to growth in the underlying demographics compared to historical new construction levels. However, macroeconomic uncertainty, including fluctuations in interest rates, stock market volatility, impact of changes in tariffs and inflation, may continue to pressure near-term housing industry demand as homes are less affordable for consumers, investors and builders. We believe we are well-positioned to grow and capture market share as industry conditions improve in the long term. We will continue to focus on working capital by closely monitoring the credit exposure of our customers, maintaining the right level of inventory and by working with our vendors to improve payment terms. We strive to achieve the appropriate balance of short-term expense control while maintaining the expertise and capacity to grow the business.
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. 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:
Net sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Income from operations
Interest expense, net
Income tax expense
Net income
Net Sales. Net sales for the year ended December 31, 2025, were $15.2 billion, a 7.4% decrease from net sales of $16.4 billion for 2024. Core organic sales decreased net sales by 10.3%, primarily due to a below-normal starts environment, while commodity price deflation and one fewer selling day decreased net sales by another 1.3% and 0.4%, respectively. These decreases were partially offset by an increase in net sales from acquisitions of 4.6%.
The following table shows net sales classified by major product category for the years ended December 31:
($ amounts in millions)
Net Sales
% of Net Sales
Net Sales
% of Net Sales
% Change
Manufactured products (1)
Windows, doors and millwork (1)
Specialty building products and services
Lumber and lumber sheet goods
Total net sales
(1) Manufactured products and windows, doors and millwork are collectively referred to as total value-added products.
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. 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. 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. 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%. 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.
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.
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. 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.
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.
Our Revolving Facility is primarily used for working capital, general corporate purposes and funding capital expenditures and growth opportunities. In addition, we may use borrowings under the Revolving Facility to facilitate debt repayment and consolidation, and to fund share repurchases. Availability under the Revolving Facility is determined by a borrowing base. Our borrowing base consists of accounts receivable, inventory, and qualified cash that all meet specific criteria contained within the credit agreement, minus agent specified reserves. Net excess borrowing availability is equal to the maximum borrowing amount minus outstanding borrowings and letters of credit.
The following table shows our borrowing base and excess availability as of December 31, 2025, and 2024:
December 31,
December 31,
(in millions)
Accounts receivable availability (1)
Inventory availability
Gross availability
Less:
Agent reserves
Plus:
Cash in qualified accounts
Borrowing base
Aggregate revolving commitments
Maximum borrowing amount (lesser of borrowing base and
aggregate revolving commitments)
Less:
Outstanding borrowings
Letters of credit
Net excess borrowing availability on revolving facility
(1) The prior year amounts have been conformed to current year presentation. 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. 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.
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. 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, or otherwise enter into transactions regarding its capital structure.
Should the current industry conditions deteriorate or we pursue additional acquisitions, we may be required to raise additional funds through the sale of capital stock or debt in the public capital markets or in privately negotiated transactions. There can be no assurance that any of these financing options would be available on favorable terms, if at all. Alternatives to help supplement our liquidity position could include, but are not limited to, idling or permanently closing additional facilities, adjusting our headcount in response to current business conditions, attempts to renegotiate leases, managing our working capital and/or divesting of non-core businesses. There are no assurances that these steps would prove successful or materially improve our liquidity position.
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, 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. The decrease in cash provided by operating activities was largely the result of a decrease in net income in 2025 of $0.6 billion.
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.
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. 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”).
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. 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.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Critical accounting policies are those that both are important to the accurate portrayal of a company’s financial condition and results, and require subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
In order to prepare financial statements that conform to generally accepted accounting principles (“GAAP”), we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Certain estimates are particularly sensitive due to their significance to the financial statements and the possibility that future events may be significantly different from our expectations.
We have identified the following accounting policy that requires us to make the most subjective or complex judgments in order to fairly present our consolidated financial position and results of operations.
Goodwill
Goodwill represents the excess of the amount we paid to acquire businesses over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed. 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. Examples of such indicators that could cause us to test goodwill for impairment between annual tests include a significant change in the business climate, unexpected competition, or a significant deterioration in market share. We may also consider market capitalization relative to our net assets. Housing starts are a significant sales driver for us. If there is a significant decline or an expected decline in housing starts, this could adversely affect our expectations for a reporting unit and the value of that reporting unit.
The process of evaluating goodwill for impairment involves the determination of the fair value of our reporting units. Our reporting units are aligned with our three geographical divisions which are also determined to be our operating segments. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of the reporting unit is not less than its carrying amount, then no further testing of the goodwill is required.
However, if we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we perform a quantitative goodwill impairment test. This test identifies both the existence of and the amount of goodwill impairment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the amount of goodwill allocated to that reporting unit.
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. Inherent in such fair
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. Due to the uncertainties associated with such estimates, interpretations and assumptions, actual results could differ from projected results, which could result in impairment of goodwill being recorded.
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. Expected future profitability reflects current headcount levels and cost structure and are flexed in future years based upon historical trends at various revenue levels. Long-term growth was based on terminal value EBITDA multiples to reflect the relevant expected acquisition prices. 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. Factors that could negatively impact the estimated fair value of our reporting units and potentially trigger impairment include, but are not limited to, unexpected competition, lower than expected housing starts, an increase in market participant weighted average cost of capital, increases in material or labor cost, and/or significant declines in our market capitalization. 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.
RECENTLY ISSUED ACCOUNTING STANDARDS
Information regarding recent accounting pronouncements is discussed in Note 2 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K.
I tem 7A. Quantitative and Qualitative Disclosures about Market Risk
We may experience changes in interest expense if changes in our debt occur. 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. The Revolving Facility also assesses variable commitment and outstanding letter of credit fees based on quarterly average loan utilization. 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.
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. Delays in our ability to pass on material price increases to our customers can adversely impact our operating results.
Item 8. Financial Statemen ts and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm – PCAOB ID 238
Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023
Consolidated Balance Sheets at December 31, 2025, and 2024
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Builders FirstSource, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Builders FirstSource, Inc. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition – Distribution Sales
As described in Note 2 to the consolidated financial statements, the Company recognized consolidated net sales of $15.2 billion for the year ended December 31, 2025, a majority of which pertains to distribution sales. Revenue is recognized as performance obligations are satisfied by transferring control of a promised good or service to a customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Distribution sales typically consist of the sale of building products the Company manufactures and the resale of purchased building products. The Company recognizes revenue related to distribution sales at a point in time upon delivery of the ordered goods to their customers. Payment terms related to distribution sales are not significant as payment is generally received shortly after the point of sale.
The principal consideration for our determination that performing procedures relating to revenue recognition for distribution sales is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s distribution sales.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process. These procedures also included, among others (i) testing, on a sample basis, revenue recognized by obtaining and inspecting source documents, such as purchase orders, invoices, proof of delivery, and cash receipts or third party confirmations and (ii) testing, on a sample basis, outstanding accounts receivable balances as of December 31, 2025 by obtaining and inspecting source documents, such as purchase orders, invoices, proof of delivery or services performed, and subsequent cash receipts.
/s/ PricewaterhouseCoopers LLP
Dallas, Texas
February 17, 2026
We have served as the Company’s auditor since 1999
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
(in thousands, except per share amounts)
Net sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Income from operations
Interest expense, net
Income before income taxes
Income tax expense
Net income
Net income per share:
Basic
Diluted
Weighted average common shares:
Basic
Diluted
The accompanying notes are an integral part of these consolidated financial statements.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
C ONSOLIDATED BALANCE SHEETS
(in thousands, except par value amounts)
December 31,
December 31,
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, less allowances of $ 42,511 and $ 41,233 , respectively
Other receivables
Inventories, net
Contract assets
Other current assets
Total current assets
Property, plant and equipment, net
Operating lease right-of-use assets, net
Goodwill
Intangible assets, net
Deferred income taxes
Other assets, net
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued liabilities
Contract liabilities
Current portion of operating lease liabilities
Current maturities of long-term debt
Total current liabilities
Noncurrent portion of operating lease liabilities
Long-term debt, net of current maturities, discounts and issuance costs
Deferred income taxes
Other long-term liabilities
Total liabilities
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $ 0.01 par value, 10,000 shares authorized; zero shares issued and outstanding
Common stock, $ 0.01 par value, 300,000 shares authorized; 110,585 and 113,578 shares issued and outstanding, respectively
Additional paid-in capital
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
The accompanying notes are an integral part of these consolidated financial statements.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
C ONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(in thousands)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Deferred income taxes
Stock-based compensation expense
Other non-cash adjustments
Changes in assets and liabilities, net of assets acquired and liabilities assumed:
Receivables
Inventories
Contract assets
Other current assets
Other assets and liabilities
Accounts payable
Accrued liabilities
Contract liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Cash used for acquisitions, net of cash acquired
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Cash used for equity investments
Net cash used in investing activities
Cash flows from financing activities:
Borrowings under revolving credit facility
Repayments under revolving credit facility
Proceeds from long-term debt and other loans
Repayments of long-term debt and other loans
Payments of loan costs
Payment of acquisition-related deferred and contingent consideration
Tax withholdings on and exercises of equity awards
Repurchase of common stock
Net cash provided by (used in) financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental disclosures of cash flow information:
Cash paid for interest
Supplemental disclosures of non-cash activities:
Accrued purchases of property, plant and equipment
Right-of-use assets obtained in exchange for operating lease obligations
Amounts accrued related to repurchases of common stock
Accrued consideration for acquisitions
The accompanying notes are an integral part of these consolidated financial statements.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
C ONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Additional
Common Stock
Paid-in
Retained
(in thousands)
Shares
Amount
Capital
Earnings
Total
Balance at December 31, 2022
Vesting of restricted stock units
Stock-based compensation expense
Repurchase of common stock (1)
Exercise of stock options
Shares withheld for restricted stock units vested
Net income
Balance at December 31, 2023
Vesting of restricted stock units
Stock-based compensation expense
Repurchase of common stock (2)
Exercise of stock options
Shares withheld for restricted stock units vested
Net income
Balance at December 31, 2024
Vesting of restricted stock units
Stock-based compensation expense
Repurchase of common stock (3)(4)
Exercise of stock options
Shares withheld for restricted stock units vested
Net income
Balance at December 31, 2025
During the year ended December 31, 2023, we repurchased and retired 17.8 million shares of our common stock at an average price of $ 100.49 per share, for $ 1.8 billion, inclusive of fees and taxes, pursuant to the repurchase program authorized by our board of directors in November 2022 and further expanded by our board of directors in April 2023. The primary purpose of the repurchase program was to offset dilution from the merger with BMC .
During the year ended December 31, 2024, we repurchased and retired 8.9 million shares of our common stock at an average price of $ 170.74 per share, for $ 1.5 billion, inclusive of fees and taxes, pursuant to the repurchase programs authorized by our board of directors in February 2024 and August 2024.
During the year ended December 31, 2025, we repurchased and retired 3.4 million shares of our common stock at an average price of $ 118.65 per share, for $ 0.4 billion , inclusive of fees and taxes, pursuant to the repurchase programs authorized by our board of directors in February 2024 and August 2024.
Amounts paid in excess of par are allocated to additional paid-in capital during periods in which retained earnings is depleted.
The accompanying notes are an integral part of these consolidated financial statements.
BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES
N OTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the Business
Builders FirstSource, Inc., a Delaware corporation formed in 1998 , is a leading supplier of building materials, manufactured components and construction services to professional contractors, sub-contractors, and consumers. The company operates approximately 585 locations in 43 states across the U.S.
In this annual report, references to the “Company,” “we,” “our,” “ours” or “us” refer to Builders FirstSource, Inc. and its consolidated subsidiaries, unless otherwise stated or the context otherwise requires.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements present the results of operations, financial position, and cash flows of Builders FirstSource, Inc. and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
Accounting Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
Estimates are used when accounting for items such as revenue, vendor rebates, allowance for returns, discounts and credit losses, employee compensation programs, depreciation and amortization periods, income taxes, inventory values, insurance programs, goodwill, other intangible assets and long-lived assets.
Equity Investments
The Company’s equity investments are accounted for using equity method accounting and are recorded as other assets, net in the accompanying consolidated balance sheets and are not significant to the Company.
Reclassifications
Certain prior periods’ amounts have been reclassified to conform to the current year presentation, including refining the composition of our product categories, and amounts presented as amortization of debt discount, premium and issuance costs, loss on extinguishments of debt, credit loss expense (benefit), non-cash net loss (gain) on assets, and receivables. Prior period amounts related to product categories as disclosed in this Note 2 under Revenue Recognition have been reclassified to conform to the current year presentation.
The prior period amounts related to amortization of debt discount, premium and issuance costs, loss on extinguishments of debt, and non-cash net loss (gain) on assets have been combined with other non-cash adjustments, while credit loss expense (benefit) has been combined with receivables on the face of the consolidated statements of cash flows, to conform to the current year presentation. Reclassifications had no impact on net income, total assets and liabilities, stockholders’ equity, financing cash flows, or total cash flows as previously reported.
Segments
We offer an integrated solution to our customers providing manufacturing, supply, and installation of a full range of structural and related building products. We provide a wide variety of building products and services directly to homebuilder customers. We manufacture floor trusses, roof trusses, wall panels, millwork, windows, and doors. We also provide a full range of construction services.
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. Our operating segments are organized on a geographical basis to facilitate a
disaggregated management of the Company and to respond to the local needs of the customers in the markets we serve. All of our operating segments have similar customers, products and services, and distribution methods.
Due to these similarities, along with the similar economic profitability achieved across all our operating segments, we aggregate our three operating segments into one reportable segment in accordance with GAAP. Centralized financial and operational oversight, including resource allocation and assessment of performance, is performed by our CEO , whom we have determined to be our chief operating decision maker (“CODM”).
Business Combinations
When they meet the requirements under ASC 805, Business Combinations, merger and acquisition transactions are accounted for using the acquisition method, and accordingly, the results of operations of the acquiree are included in the Company’s consolidated financial statements from the acquisition date. The consideration transferred is allocated to the identifiable assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with any excess recorded as goodwill. Transaction-related costs are expensed in the period the costs are incurred. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding adjustment to goodwill.
Revenue Recognition
We recognize revenue as performance obligations are satisfied by transferring control of a promised good or service to a customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We generally classify our revenues into two types: (i) distribution sales; or (ii) sales related to contracts with service elements.
Distribution sales typically consist of the sale of building products we manufacture and the resale of purchased building products. We recognize revenue related to distribution sales at a point in time upon delivery of the ordered goods to our customers. Payment terms related to distribution sales are not significant as payment is generally received shortly after the point of sale.
Our contracts with service elements primarily relate to installation and construction services. We evaluate whether multiple contracts should be combined and accounted for as a single contract and whether a single or combined contract should be accounted for as a single performance obligation or multiple performance obligations. If a contract is separated into more than one performance obligation, we allocate the transaction price to each performance obligation generally based on observable standalone selling prices of the underlying goods or services. Revenue related to contracts with service elements is generally recognized over time based on the extent of progress towards completion of the performance obligation because of continuous transfer of control to the customer. We consider costs incurred to be indicative of goods and services delivered to the customer. As such, we use a cost-based input method to recognize revenue on our contracts with service elements as it best depicts the transfer of assets to our customers. Payment terms related to sales for contracts with service elements are specific to each customer and contract. However, they are considered to be short-term in nature as payments are normally received either throughout the life of the contract or shortly after the contract is complete.
Contract costs include all direct material and labor, equipment costs and those indirect costs related to contract performance. Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determinable. Prepayments for materials or services are deferred until such materials have been delivered or services have been provided. All sales recognized are net of allowances for discounts and estimated returns, based on historical experience. The Company records sales incentives provided to customers as a reduction of revenue. We present all sales tax on a net basis in our consolidated financial statements.
Costs to obtain contracts are expensed as incurred as our contracts are typically completed in one year or less, and where applicable, we generally would incur these costs whether or not we ultimately obtain the contract. We do not disclose the value of our remaining performance obligations on uncompleted contracts as our contracts generally have a duration of one year or less.
The timing of revenue recognition, invoicing and cash collection results in accounts receivable, contract assets and contract liabilities. Contract assets include unbilled amounts when the revenue recognized exceeds the amount billed to the customer, and amounts representing a right to payment from previous performance that is conditional on something other than passage of time, such as retainage. Contract liabilities consist of customer advances and deposits, and deferred revenue.
The following table disaggregates our net sales by product category for the years ended December 31:
(in thousands)
Manufactured products
Windows, doors and millwork
Specialty building products and services
Lumber and lumber sheet goods
Total net sales
As our product alignment continues to be refined, we have reclassified prior periods’ net sales by product category to conform to the current period presentation. The impact to each of the prior periods’ net sales for manufactured products, windows, doors and millwork, specialty building products and services, and lumber and lumber sheet goods was 1.4 % , 0.3 % , - 3.5 % , and 1.8 % for 2024 and - 5.6 % , 0.5 % , 2.2 % , and 3.6 % for 2023, respectively.
Net sales from installation and construction services represents less than 10 % of the C ompany’s net sales for each period presented.
Through December 31, 2025, 2024 and 2023, we recognized as revenue substantially all of the contract liabilities balance at December 31, 2024, 2023 and 2022 , respectively.
Cash and Cash Equivalents and Checks Outstanding
Cash and cash equivalents consist of cash on hand and all highly liquid investments with an original maturity date of three months or less. Also included in cash and cash equivalents are proceeds due from credit card transactions that generally settle within two business days. We maintain cash at financial institutions in excess of federally insured limits. Further, we maintain various banking relationships with different financial institutions. Accordingly, when there is a negative net book cash balance resulting from outstanding checks that had not yet been paid by any single financial institution, they are reflected in accounts payable in the accompanying consolidated balance sheets.
Accounts Receivable
We extend credit to qualified professional homebuilders and contractors, in many cases on a non-collateralized basis. Accounts receivable potentially expose us to concentrations of credit risk. Because our customers are dispersed among our various markets, our credit risk to any one customer or geographic economy is not significant.
Our customer mix is a balance of large national homebuilders, regional homebuilders, local and custom homebuilders and repair and remodeling contractors as well as multi-family builders. For the year ended December 31, 2025, our top 10 customers accounted for 14 % of our net sales, with our largest customer accounting for 4 % of net sales.
The allowance for credit losses is based on management’s assessment of the amount which may become uncollectible in the future and is estimated using specific review of problem accounts, overall portfolio quality, current and forecasted economic conditions that may affect the customer’s ability to pay, and historical experience. Accounts receivable are written off when deemed uncollectible.
We also establish reserves for credit memos and customer returns. The reserve balance was $ 13.9 million and $ 14.4 million at December 31, 2025, and 2024, respectively. The activity in this reserve was not material for each year presented.
The following table shows the changes in our allowance for credit losses:
(in thousands)
Balance at January 1,
Net additions (reversals) to provision
Write-offs, net of recoveries
Balance at December 31,
Other Receivables
Other receivables consist primarily of $ 152.2 million and $ 155.8 million of vendor rebates receivables at December 31, 2025, and 2024 , respectively, and income tax receivables.
Inventories
Inventories consist principally of materials purchased for resale, including lumber and lumber sheet goods, windows, doors and millwork, and other building products, as well as certain manufactured products and are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method, the use of which approximates the first-in, first-out method. We accrue for shrink based on the actual historical shrink results of our most recent physical inventories adjusted, if necessary, for current economic conditions. These estimates are compared with actual results as physical inventory counts are taken and reconciled to the general ledger.
During the year, we monitor our inventory levels by market and record provisions for excess inventories based on slower moving inventory. We define potential excess inventory as the amount of inventory on hand in excess of the historical usage, excluding special order items purchased in the last six months. We then apply our judgment as to forecasted demand and other factors, including liquidation value, to determine the required adjustments to net realizable value. Our inventories are generally not susceptible to technological obsolescence.
Our arrangements with vendors provide for rebates of a specified amount of consideration, payable at defined intervals, generally related to a stipulated level of purchases. We account for estimated rebates as a reduction of the prices of the vendor’s inventory until the product is sold, at which time such rebates reduce cost of sales in the accompanying consolidated statements of operations. Throughout the year, we estimate the amount of the rebates based upon the expected level of purchases. We continually evaluate and revise these estimates, as necessary, based on actual purchase levels.
We source products from a large number of suppliers. Materials purchased from our largest single supplier represented 8 % of our total materials purchased in 2025 .
Shipping and Handling Costs
Handling costs incurred in manufacturing activities are included in cost of sales. All other shipping and handling costs are included in selling, general and administrative expenses in the accompanying consolidated statements of operations and totaled $ 616.0 million , $ 654.0 million and $ 656.0 million in 2025, 2024 and 2023 , respectively.
Income Taxes
We account for income taxes utilizing the asset and liability method described in the Income Taxes topic of the FASB Accounting Standards Codification (“Codification”). Deferred income taxes are recorded to reflect consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which differences are expected to affect taxable earnings. We record a valuation allowance to reduce deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Warranty Expense
We have warranty obligations with respect to most manufactured products; however, the liability for the warranty obligations is not material as a result of third-party inspection and acceptance processes.
Debt Issuance Costs and Debt Discount/Premium
Loan costs are capitalized upon the issuance of long-term debt and amortized over the life of the related debt. Debt issuance costs associated with term debt are presented as a reduction to long-term debt. Debt issuance costs associated with revolving debt arrangements are presented as a component of other assets, net. Debt issuance costs incurred in connection with revolving debt arrangements are amortized using the straight-line method. Debt issuance costs, discounts and premiums incurred in connection with term debt are amortized over the life of the related debt using the effective interest method. Amortization of debt issuance costs, discounts and premiums are included in interest expense. Upon changes to our debt structure, we evaluate debt issuance costs, discounts and premiums in accordance with the Debt topic of the Codification. We adjust debt issuance costs, discounts and premiums as necessary based on the results of this evaluation, as discussed in Note 8.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. The estimated lives of the various classes of assets are as follows:
Buildings and improvements
10 to 40 years
Machinery and equipment
7 to 10 years
Information technology, furniture and fixtures
3 to 5 years
Leasehold improvements
The shorter of the estimated useful life or the remaining lease term
Major additions and improvements are capitalized, while maintenance and repairs that do not extend the useful life of the property are charged to expense as incurred. Gains or losses from dispositions of property, plant and equipment are recorded in the period incurred. We also capitalize certain costs of computer software developed or obtained for internal use, including interest, provided that those costs are not research and development, and certain other criteria are met. Internal use computer software costs are included in information technology, furniture and fixtures, and depreciated using the straight-line method over the estimated useful lives of the assets, generally three years .
Cloud Computing Arrangements
We assess cloud computing arrangements to determine whether the contract meets the definition of a service contract or conveys a software license. When cloud computing arrangements meet the definition of a service contract, we capitalize expenditures for implementation, set-up, and other upfront costs incurred. Once the implementation of a cloud computing arrangement is complete and ready for its intended use, the Company amortizes the costs over the expected term of the hosting arrangement using the straight-line method to the same income statement line as the associated cloud operating expenses. As of December 31, 2025, and 2024, we had capitalized costs, net of amortization, of $ 21.8 million and $ 9.3 million , respectively, included in other current assets, and $ 80.6 million and $ 52.7 million , respectively, included in other assets, net. Amortization expense for these costs was $ 9.7 million , $ 1.3 million , and $ 1.4 million for the years ended December 31, 2025, 2024, and 2023 respectively, and is included in Selling, general and administrative expenses within the consolidated statements of operations.
Leases
We lease certain land, buildings, rolling stock and other types of equipment for use in our operations. These leases typically have initial terms ranging from five to 15 years . Many of our leases contain renewal options which are exercisable at our discretion. These renewal options generally have terms ranging from one to five years .
Under the Leases topic of the Codification, lessees are required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
We determine if an arrangement is a lease at the inception of the arrangement. Lease liabilities are recognized based on the present value of lease payments over the lease term at the arrangement’s commencement date. Right-of-use assets are recognized based on the amount of the measurement of the lease liability adjusted for any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and any initial direct costs incurred. Renewal options are included in the calculation of our right-of-use assets and lease liabilities when it is determined that they are reasonably certain of exercise based on an analysis of the relevant facts and circumstances. As the implicit rate of return of our lease agreements is usually not readily determinable, we generally use our incremental borrowing rate in determining the present value of lease payments. We determine our incremental borrowing rate based on information available to us at the lease commencement date. Certain of our lease arrangements contain lease and non-lease components. We have elected to account for non-lease components as a part of the related lease components for all of our leases. Leases with an initial term of 12 months or less are not recognized on our balance sheet. We recognize the expense for these leases on a straight-line basis over the lease term.
We have certain lease agreements that are subject to changes based on the Consumer Price Index or another referenced index. In the event of changes to the relevant index, lease liabilities are not remeasured, and incremental costs are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred.
Long-Lived Assets
We evaluate our long-lived assets, other than goodwill, for impairment when events or changes in circumstances indicate, in our judgment, that the carrying amount of such assets may not be recoverable. The determination of whether or not impairment exists is based on our estimate of undiscounted future cash flows before interest attributable to the assets as compared to the net carrying amount of the assets. If impairment is indicated, the amount of the impairment recognized is determined by estimating the fair value of the assets based on estimated discounted future cash flows and recording a provision for loss if the carrying amount is greater than estimated fair value. The net carrying amount of assets identified to be disposed of in the future is compared to their estimated fair value, usually the quoted market price obtained from an independent third-party less the cost to sell, to determine if impairment exists. Until the assets are disposed of, an estimate of the fair value is reassessed when related events or circumstances change.
Insurance
We have established insurance programs to cover certain insurable risks consisting primarily of physical loss to property, business interruptions resulting from such loss, workers’ compensation, employee healthcare, and comprehensive general and auto liability. Third-party insurance coverage is obtained for exposures above predetermined deductibles as well as for those risks required to be insured by law or contract. On a quarterly basis, we engage an external actuarial professional to independently assess and estimate the total liability outstanding. Provisions for losses are developed from these valuations which rely upon our past claims experience, which considers both the frequency and settlement of claims. The legal costs associated with these claims are included in these developed provisions. We discount our workers’ compensation, general liability, and auto liability insurance reserves based upon estimated future payment streams at our risk-free rate. Our total insurance reserve balances were $ 216.6 million and $ 206.3 million as of December 31, 2025, and 2024, respectively. Of these balances, $ 121.4 million and $ 103.4 million were recorded as other long-term liabilities as of December 31, 2025, and 2024, respectively. Included in these reserve balances as of December 31, 2025, and 2024, were $ 25.9 million and $ 17.1 million , respectively, of that exceeded stop- limits and are expected to be recovered under insurance policies which are also recorded as other receivables and other assets, net in the accompanying consolidated balance sheets.
Net Income per Common Share
Net income per common share, or earnings per share (“EPS”), is calculated in accordance with the Earnings per Share topic of the Codification, which requires the presentation of basic and diluted EPS. Basic EPS is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common shares.
The table below presents the calculation of basic and diluted EPS for the years ended December 31:
Years Ended December 31,
(in thousands, except per share amounts)
Numerator:
Net income
Denominator:
Weighted average shares outstanding, basic
Dilutive effect of options and RSUs
Weighted average shares outstanding, diluted
Net income per share:
Basic
Diluted
Antidilutive and contingent RSUs excluded from diluted EPS
Goodwill and Other Intangible Assets
Intangibles subject to amortization
We recognize an acquired intangible asset apart from goodwill whenever the intangible asset arises from contractual or other legal rights, or whenever it can be separated or divided from the acquired entity and sold, transferred, licensed, rented, or exchanged, either individually or in combination with a related contract, asset or liability. Impairment losses are recognized if the carrying amounts of an intangible asset subject to amortization is not recoverable from expected future cash flows and its carrying amount exceeds its estimated fair value.
Goodwill
We recognize goodwill as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is tested for impairment on an annual basis and between annual tests whenever impairment is indicated. This annual test takes place as of December 31 each year. Impairment losses are recognized whenever the carrying amount of a reporting unit exceeds its fair value.
Stock-based Compensation
Under our stock-based employee compensation plan, we issue new common stock upon exercises of stock options and vesting of restricted stock units (“RSU”). We recognize the effect of pre-vesting forfeitures in the period they actually occur. Our stock-based employee compensation plan is described more fully in Note 10.
The fair value of RSU awards which are subject to or contain market conditions is estimated on the date of grant using the Monte Carlo simulation model with the following weighted average assumptions for the years ended December 31:
Expected volatility (company)
Expected volatility (peer group median)
Correlation between the company and peer group median
Expected dividend yield
Risk-free rate
The expected volatilities and correlation are based on the historical daily returns of our common stock and the common stocks of the constituents of the Company’s peer group over the most recent period equal to the measurement period. The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention to not pay regular dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant and has a term equal to the measurement period.
Fair Value
The Fair Value Measurements and Disclosures topic of the Codification provides a framework for measuring the fair value of assets and liabilities and establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy can be summarized as follows:
Level 1 — unadjusted quoted prices for identical assets or liabilities in active markets accessible by us
Level 2 — inputs that are observable in the marketplace other than those inputs classified as Level 1
Level 3 — inputs that are unobservable in the marketplace and significant to the valuation
If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation.
As of December 31, 2025, and 2024 , the Company does not have any material financial instruments which are measured at fair value on a recurring basis. We have elected to report the value of our 4.25 % 2032 notes, 6.375 % 2034 notes, 6.75 % 2035 notes, 6.375 % 2032 notes, 5.00 % 2030 notes , and Revolving Facility at amortized cost. The fair values of the 4.25 % 2032 notes, 6.375 % 2034 notes, 6.75 % 2035 notes, 6.375 % 2032 notes, and 5.00 % 2030 notes at December 31, 2025, were $ 1,236.6 million , $ 1,038.8 million , $ 785.6 million , $ 726.3 million , and $ 548.6 million , respectively, and were determined using Level 2 inputs based on market prices.
Comprehensive Income
Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It consists of net income and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income. Comprehensive income is equal to net income for the years ended December 31, 2025, 2024 and 2023 .
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application and early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU 2025-06 are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods, with early adoption permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
3. 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, (ii) O.C. Cluss, (iii) Truckee Tahoe, (iv) St. George Truss, (v) Stately Las Vegas, (vi) Rystin, (vii) Lengefeld Lumber, and (viii) Pleasant Valley.
Alpine Lumber was the largest independently operated supplier of building materials in Colorado and northern New Mexico. Alpine Lumber serves the Colorado Front Range, western Colorado and northern New Mexico, providing a broad product range which includes prefabricated trusses and wall panels, and millwork. O.C. Cluss is a supplier of lumber and building materials to southwestern Pennsylvania, western Maryland and northern West Virginia. Truckee Tahoe is a supplier of lumber and building materials in the northern California and northwestern Nevada markets. St. George Truss manufactures trusses, serving builders in southern Utah and southern Nevada. Stately Las Vegas and Rystin provide turnkey door and trim solutions to customers in the Las Vegas area. Lengefeld Lumber supplies lumber and building materials to builders in central Texas, while Pleasant Valley Homes is a wholesale manufacturer of factory-built housing, selling HUD-compliant manufactured homes and semi-custom modular homes to land lease community developers, retailers and home builders across ten northeastern states.
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. 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. (“High Mountain”), (xii) Douglas Lumber, Kitchens and Home Center (“Douglas Lumber”), and (xiii) Kleet Lumber (“Kleet Lumber”).
These acquisitions were funded with a combination of cash on hand and borrowings under our Revolving Facility. These transactions were accounted for using the acquisition method, and accordingly the results of operations have been included in the Company’s consolidated financial statements from the acquisition date. The purchase price was allocated to the assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the net assets acquired recorded as goodwill.
Pro forma financial information for the acquisitions discussed above for 2025 and 2024 are not presented as these acquisitions did not have a material impact on our results of operations, individually or in the aggregate for each respective period.
The following table summarizes the aggregate fair values of the assets acquired and liabilities assumed for acquisitions during the years ended December 31, 2025, and 2024:
Total Acquisitions
(in thousands)
Cash and cash equivalents
Accounts receivable
Other receivables
Inventories
Contract assets
Other current assets
Property, plant and equipment
Operating lease right-of-use assets
Finance lease right-of-use assets
Intangible assets
Other assets
Total assets
Accounts payable
Accrued liabilities
Contract liabilities
Operating lease liabilities
Finance lease liabilities
Total liabilities
Goodwill
Total purchase consideration
Accrued contingent consideration and purchase price adjustments
Less: cash acquired
Total cash consideration
4 . Property, Plant and Equipment
Property, plant and equipment consisted of the following at December 31:
(in thousands)
Land and improvements
Buildings and improvements
Machinery and equipment
Information technology, furniture and fixtures
Construction in progress
Finance lease right-of-use assets
Property, plant and equipment
Less: accumulated depreciation
Property, plant and equipment, net
Depreciation expense was $ 294.2 million , $ 256.5 million and $ 222.6 million , of which $ 87.6 million , $ 78.7 million , and $ 63.5 million was included in cost of sales, for the years ended December 31, 2025, 2024 and 2023, respectively.
Included in property, plant and equipment are certain assets held under other finance obligations. These assets are recorded at the present value of the lease payments and include land, buildings and equipment. Amortization charges associated with assets held under other finance obligations are included in depreciation expense.
The following balances held under other finance obligations are included in the accompanying consolidated balance sheet as of December 31:
(in thousands)
Land and improvements
Buildings and improvements
Assets held under other finance obligations
Less: accumulated amortization
Assets held under other finance obligations, net
5. Goodwill
The following table sets forth the changes in the carrying amount of goodwill for the years ended December 31, 2025, and 2024:
(in thousands)
Balance as of December 31, 2023 (1)
Acquisitions
Balance as of December 31, 2024 (1)
Acquisitions
Balance as of December 31, 2025 (1)
(1) Goodwill is presented net of accumulated impairment losses of $ 44.6 million.
The change in the carrying amount of goodwill during 2025 is attributable to acquisitions. The amount allocated to goodwill is attributable to the assembled workforces acquired, expected synergies, and expected growth from the new markets which the Company has entered. The $ 458.9 million of goodwill recognized from the current year acquisitions is expected to be deductible an d amortized ratably over a 15 -year period for tax purposes.
We closely monitor trends in economic factors and their effects on operating results to determine if an impairment trigger was present that would warrant a reassessment of the recoverability of the carrying amount of goodwill prior to the required annual impairment test in accordance with the Intangibles – Goodwill and Other topic of the Codification.
In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If it is concluded that it is more likely than not that the fair value of the reporting unit is not less than its carrying value, then no further testing of the goodwill is required. However, if we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we perform a quantitative goodwill impairment test. This test identifies both the existence of and the amount of goodwill impairment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount goodwill is not impaired. If the carrying amount of a reporting unit exceeds its fair value an impairment loss is recognized in an amount equal to that excess, limited to the amount of goodwill allocated to that reporting unit.
The process of evaluating goodwill for impairment involves the determination of the fair value of our reporting units. Our reporting units are aligned with our three geographic operating segments. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including our interpretation of current economic indicators and market valuations and assumptions about our strategic plans with regard to our operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates resulting in further impairment of goodwill.
In evaluating goodwill for impairment at December 31, 2025 , we developed the fair value using a discounted cash flow methodology. The discounted cash flow methodology establishes fair value by estimating the present value of the projected future cash flows to be generated from the reporting unit. The discount rate applied to the projected future cash flows to arrive at the present value is intended to reflect all risks of ownership and the associated risks of realizing the stream of projected future cash flows. The discounted cash flow methodology uses our projections of financial performance for a five-year period. The significant assumptions used in the discounted cash flow methodology are the discount rate, the terminal value and the expected future revenues and profitability.
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. Expected future profitability reflects current headcount levels and cost structure and are flexed in future years based upon historical trends at various revenue levels. Long-term growth was based on terminal value EBITDA multiples to reflect the relevant expected acquisition prices. 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. Factors that could negatively impact the estimated fair value of our reporting units and potentially trigger impairment include, but are not limited to, unexpected competition, lower than expected housing starts, an increase in market participant weighted average cost of capital, increases in material or labor cost, and/or significant declines in our market capitalization. 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 recorded no goodwill impairment charges in 2025, 2024 or 2023 .
6. Intangible Assets
The following table presents intangible assets as of December 31:
Gross
Carrying Amount
Accumulated Amortization
Gross
Carrying Amount
Accumulated Amortization
(in thousands)
Customer relationships
Developed technology
Trade names
Non-compete agreements
Total intangible assets
During the years ended December 31, 2025, 2024 and 2023, we recorded amortization expense in relation to the above-listed intangible assets of $ 297.2 million , $ 305.4 million and $ 335.7 million , respectively. We recorded no intangible asset impairment charges for those same years.
In connection with the current year acquisitions, we recorded intangible assets of $ 377.4 million , which includes $ 366.9 million of customer relationships and $ 10.5 million of trade names. The weighted average useful life of the current year acquired intangible assets is 10.3 years in total, 10.5 years for customer relationships and 3.3 years for trade names. The fair value of acquired customer relationships intangible assets was primarily estimated by applying the multiperiod excess earnings method, which involved the use of significant estimates and assumptions primarily related to forecasted revenue growth rates, gross margin, contributory asset charges, customer attrition rates, and market-participant discount rates. These measures are based on significant Level 3 inputs not observable in the market. Key assumptions developed based on the Company’s historical experience, future projections and comparable market data include future cash flows, long-term growth rates, attrition rates and discount rates.
The following table presents the estimated amortization expense for intangible assets for the years ending December 31:
(in thousands)
Thereafter
Total future net intangible amortization expense
7. Accrued Liabilities
Accrued liabilities consisted of the following:
December 31,
December 31,
(in thousands)
Accrued payroll and other employee related expenses
Self-insurance reserves
Accrued business and other taxes
Accrued interest
Accrued rebates payable
Accrued professional service fees
Other
Total accrued liabilities
8. Long-Term Debt
Long-term debt consisted of the following:
December 31,
December 31,
(in thousands)
Revolving credit facility
4.25 % 2032 notes
6.375 % 2034 notes
6.75 % 2035 notes
6.375 % 2032 notes
5.00 % 2030 notes
Other finance obligations
Finance lease obligations
Unamortized debt discount/premium and debt issuance costs
Less: current maturities of long-term debt
Long-term debt, net of current maturities, discounts and issuance costs
2024 Debt Transactions
On February 29, 2024, the Company completed a private offering of $ 1.0 billion in aggregate principal amount of the 6.375 % 2034 notes at an issue price equal to 100 % of par value. The net proceeds from the offering were used to repay indebtedness outstanding under the Revolving Facility and for general corporate purposes.
In connection with the issuance of the 6.375 % 2034 notes, we incurred $ 12.8 million of various third-party fees and expenses. These costs have been recorded as a reduction to long-term debt and are being amortized over the contractual life of the 6.375 % 2034 notes using the effective interest method.
2025 Debt Transactions
Notes Offering Transaction
On May 8, 2025, the Company completed a private offering of $ 750.0 million in aggregate principal amount of 6.75 % 2035 notes at an issue price equal to 100 % of par value. The net proceeds from the offering were used to repay indebtedness outstanding under the Revolving Facility.
In connection with the issuance of the 6.75 % 2035 notes, we incurred $ 11.1 million of various third-party fees and expenses. These costs have been recorded as a reduction to long-term debt and are being amortized over the contractual life of the 6.75 % 2035 notes using the effective interest method.
Revolving Credit Facility Amendment
On May 20, 2025, the Company amended the Revolving Facility to, among other things, replace 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 .
In connection with this amendment, we expensed approximately $ 0.2 million of unamortized debt issuance costs related to an exiting lender to interest expense, and we incurred approximately $ 8.7 million of new debt issuance costs which, together with the previous unamortized debt issuance costs, have been deferred and will be amortized over the remaining contractual life.
Revolving Credit Facility
As of December 31, 2025, the Revolving Facility provides for a $ 2.2 billion revolving credit line to be used for working capital, general corporate purposes and funding capital expenditures and growth opportunities. In addition, we may use the Revolving Facility to facilitate debt repayment and consolidation. The available borrowing capacity, or borrowing base, is derived from a percentage of the Company’s eligible receivables and inventory, as defined by the agreement, subject to certain reserves. As of December 31, 2025 , we had no outstanding borrowings under our Revolving Facility, and our net excess borrowing availability wa s $ 1.5 billion after being reduced by outstanding letters of credit of $ 79.6 million .
As of December 31, 2025 , borrowings under the Revolving Facility bear interest, at our option, at either the SOFR or a base rate, plus, in each case, an applicable margin. The applicable margin ranges from 1.00 % to 1.25 % per annum in the case of term SOFR loans and 0.00 % to 0.25 % per annum in the case of base rate loans. A commitment fee, currently 0.20 % per annum, is charged on the unused amount of the Revolving Facility based on quarterly average loan utilization. Letters of credit under the Revolving Facility are assessed at a rate equal to 1.00 % or 1.25 %, based on the average excess availability, as well as a fronting fee at a rate of 0.125 % per annum. These fees are payable quarterly in arrears at the beginning of January, April, July, and October.
All obligations under the Revolving Facility are guaranteed jointly and severally by the Company and all other subsidiaries that guarantee our 5.00 % 2030 notes, our 4.25 % 2032 notes, our 6.375 % 2032 notes, our 6.375 % 2034 notes, and our 6.75 % 2035 notes (such subsidiaries, the “Debt Guarantors”). All obligations and the guarantees of those obligations are secured by substantially all of the assets of the Company and the Debt Guarantors, subject to certain exceptions and permitted liens, including, with respect to the Revolving Facility, a first-priority security interest in such assets that constitute Revolving Collateral (as defined in the Revolving Facility) and a second-priority security interest in such assets that constitute Notes Collateral (as defined in the Revolving Facility).
The Revolving Facility contains negative covenants which, among other things, limit the Company’s ability to incur additional indebtedness, incur liens, engage in mergers or other fundamental changes, sell certain assets, pay dividends, make acquisitions or investments, prepay certain indebtedness, change the nature of our business, and engage in certain transactions with affiliates. In addition, the Revolving Facility also contains a financial covenant requiring the satisfaction of a minimum fixed charge coverage 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 wa s $ 160.7 million as of December 31, 2025 .
Senior Unsecured Notes
The following table presents details of the components of our senior unsecured notes:
December 31,
December 31,
Tranche
Interest payable
Principal Amount
(in thousands)
Carrying Amount
(in thousands)
4.25 % notes due February 2032
Semi-annually
$ 300,000 and 1,000,000
6.375 % notes due March 2034
Semi-annually
6.75 % notes due May 2035
Semi-annually
6.375 % notes due June 2032
Semi-annually
5.00 % notes due March 2030
Semi-annually
The terms of the senior unsecured notes, subject to certain exceptions, are guaranteed, jointly and severally, on a senior unsecured basis, by the Debt Guarantors. Subject to certain exceptions, future subsidiaries that guarantee the Revolving Facility or certain other indebtedness will also guarantee the senior unsecured notes.
Each tranche of the senior unsecured notes constitutes a senior unsecured obligation of the Company and the Debt Guarantors, pari passu in right of payment with all of the existing and future senior indebtedness of the Company, including indebtedness under the Revolving Facility, and the senior unsecured notes. The senior unsecured notes are also (i) effectively subordinated to all existing and future secured indebtedness of the Company and the Debt Guarantors to the extent of the value of the assets securing such indebtedness, (ii) senior to all of the future subordinated indebtedness of the Company and the Debt Guarantors, and (iii) structurally subordinated to any existing and future indebtedness and other liabilities, including preferred stock, of the Company’s subsidiaries that do not guarantee the senior unsecured notes.
At any time on or after March 1, 2025, the Company may redeem the 5.00% 2030 notes at the redemption prices set forth in the applicable indenture, plus accrued and unpaid interest, if any, to the redemption date. If the Company experiences certain change of control events, holders of the 5.00% 2030 notes may require it to repurchase all or part of their 5.00% 2030 notes at 101 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.
The Company may redeem the other tranches of senior unsecured notes within five years from the date of issuance of each such tranche of notes, in whole or in part, at a redemption price equal to 100 % of the principal amount of each such tranche of notes plus the “applicable premium” set forth in the applicable indenture. After the five-year period from original issuance, the Company may redeem each such tranche of notes at the redemption prices set forth in the applicable indenture, plus accrued and unpaid interest, if any, to the redemption date. If the Company experiences certain change of control triggering events, holders of each such tranche of notes may require it to repurchase all or part of their notes at 101 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.
Each of the indentures relating to the senior unsecured notes contains negative covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, incur additional debt or issue preferred stock, create liens, create restrictions on the Company’s subsidiaries’ ability to make payments to the Company, pay dividends and make other distributions in respect of the Company’s and its subsidiaries’ capital stock, make certain investments or certain other restricted payments, guarantee indebtedness, designate unrestricted subsidiaries, sell certain kinds of assets, enter into certain types of transactions with affiliates, and effect mergers and consolidations.
As of December 31, 2025, we were not in violation of any covenants or restrictions imposed by any of our debt agreements.
Future maturities of long-term debt as of December 31, 2025, were as follows:
(in thousands)
Thereafter
Total long-term debt
9. Leases and Other Finance Obligations
Right-of-use assets and lease liabilities consisted of the following as of December 31:
(in thousands)
Assets
Operating lease right-of-use assets, net
Finance lease right-of-use assets , net (included in property, plant and equipment, net)
Total right-of-use assets
Liabilities
Current
Current portion of operating lease liabilities
Current portion of finance lease liabilities (included in current maturities of long-term debt)
Noncurrent
Noncurrent portion of operating lease liabilities
Noncurrent portion of finance lease liabilities (included in long-term debt, net of current maturities)
Total lease liabilities
Total lease costs consisted of the following for the years ended December 31:
(in thousands)
Operating lease costs (1)
Finance lease costs:
Amortization of finance lease right-of-use assets
Interest on finance lease liabilities
Variable lease costs
Total lease costs
(1) Includes short-term lease costs and sublease income which were not material for all periods presented.
Future maturities of lease liabilities as of December 31, 2025, were as follows:
Finance
Leases
Operating
Leases
(in thousands)
Thereafter
Total lease payments
Less: amount representing interest
Present value of lease liabilities
Less: current portion
Long-term lease liabilities, net of current portion
Weighted average lease terms and discount rates as of December 31 were as follows:
Weighted average remaining lease term (years)
Operating leases
Finance leases
Weighted average discount rate
Operating leases
Finance leases
The following table presents cash paid for amounts included in the measurement of lease liabilities for the years ended December 31:
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases
Our lease agreements do not impose any significant restrictions or covenants on us. As of December 31, 2025, we do not have any material leases that have been signed but have not yet commenced and are not reflected on our consolidated balance sheet. Leases with related parties are not significant as of and for the years ended December 31, 2025, 2024 and 2023.
Other Finance Obligations
In addition to the operating and finance lease arrangements described above, the Company is party to 110 individual property lease agreements with a single lessor as of December 31, 2025 . These lease agreements had initial terms ranging from nine to 15 years with renewal options in five-year increments providing for up to approximately 30 -year total lease terms. A related agreement between the lessor and the Company gives the Company the right to acquire a limited number of the leased facilities at fair market value. These purchase rights represent a form of continuing involvement with these properties, which precluded sale-leaseback accounting. As a result, the Company treats all of the properties that it leases from this lessor as a financing arrangement.
We were deemed the owner of certain of our facilities during their construction period based on an evaluation made in accordance with the Leases topic of the Codification. Effectively, a sale and leaseback of these facilities occurred when construction was completed and the lease term began. These transactions did not qualify for sale-leaseback accounting. As a result, the Company treats the lease of these facilities as a financing arrangement.
As of December 31, 2025, other finance obligations consist of $ 183.9 million and cash payments made of $ 20.0 million for the year ended December 31, 2025. These other finance obligations are included on the consolidated balance sheets as part of long-term debt. The related assets are recorded as components of property, plant, and equipment on the consolidated balance sheets.
Future maturities for other finance obligations as of December 31, 2025, were as follows:
(in thousands)
Thereafter
Total
10. Employee Stock-Based Compensation
2014 Incentive Plan
Under our 2014 Incentive Plan (“2014 Plan”), as amended, the Company is authorized to grant awards in the form of incentive stock options, non-qualified stock options, restricted stock shares, restricted stock units, other common stock-based awards and cash-based awards. As of December 31, 2025, the Company had reserved 15.1 million shares of common stock for the grant of awards under the 2014 Plan, subject to adjustment as provided by the 2014 Plan. All shares under the Plan may be made subject to options, stock appreciation rights (“SARs”), or stock-based awards. Stock options and SARs granted under the 2014 Plan may not have a term exceeding 10 years from the date of grant. The 2014 Plan also provides that all awards will become fully vested and/or exercisable upon a change in control (as defined in the 2014 Plan) if those awards (i) are not assumed or equitably substituted by the surviving entity or (ii) have been assumed or equitably substituted by the surviving entity, and the grantee’s employment is terminated under certain circumstances. Other specific terms for awards granted under the 2014 Plan shall be determined by our Compensation Committee (or the board of directors if so determined by the board of directors). Awards granted under the 2014 Plan generally vest ratably over a three to four-year period or cliff vest after a period of three to four years . As of December 31, 2025, 7.1 million shares were available for issuance under the 2014 Plan. If it is assumed that shares will be issued at the target vesting amount for outstanding RSUs with variable payout provisions, an additional 0.4 million shares would be included in the shares available for future issuance under the 2014 Plan.
Stock Options
The following table summarizes our stock option activity:
Weighted
Weighted
Average
Average
Exercise
Remaining
Aggregate
Options
Price
Years
Intrinsic Value
(in thousands)
(in thousands)
Outstanding at December 31, 2024
Exercised
Forfeited
Outstanding at December 31, 2025
Exercisable at December 31, 2025
The outstanding options at December 31, 2025 , are options granted under the 2014 plan and are exercisable. There were no options granted and no options vested during the years ended December 31, 2025, 2024 or 2023. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 were $ 2.3 million, $ 5.4 million and $ 9.0 million, respectively.
Restricted Stock Units
The total outstanding RSUs at December 31, 2025, include 1.1 million units granted under the 2014 Plan.
Time Based Restricted Stock Unit Grants
The Company grants RSUs to employees under our 2014 Incentive Plan for which vesting is based solely on continuous employment over the requisite service period. The following table summarizes activity for RSUs subject solely to service conditions for the year ended December 31, 2025:
Weighted
Average Grant
Shares
Date Fair Value
(in thousands)
Nonvested at December 31, 2024
Granted
Vested
Forfeited
Nonvested at December 31, 2025
The weighted average grant date fair value of RSUs for which vesting is subject solely to service conditions granted during the years ended December 31, 2025, 2024 and 2023 was $ 125.65 , $ 186.61 , and $ 87.05 , respectively.
Performance, Market and Service Condition Based Restricted Stock Unit Grants
The Company grants RSUs to employees under our 2014 Incentive Plan, that generally vest based on the Company’s level of achievement of performance goals relating to return on invested capital over a three-year period (“performance condition”) as well as continued employment during the performance period (“service condition”). The total number of shares of common stock that may be earned from the performance condition ranges from zero to 200 % of the RSUs granted. The number of shares earned from the performance condition may be further increased or decreased by 10 % based on the Company’s total shareholder return relative to a peer group during the performance period (“market condition”). The following table summarizes activity for these RSUs for the year ended December 31, 2025:
Weighted
Average Grant
Shares
Date Fair Value
(in thousands)
Nonvested at December 31, 2024
Granted
Performance & market achievement adjustment (1)
Vested
Forfeited
Nonvested at December 31, 2025
(1) Represents RSUs granted prior to 2025 for which the performance and market achievement period was completed in 2025, resulting in incremental unit awards granted. These incremental awards are also included in the amount vested in 2025 .
The weighted average grant date fair value of RSUs for which vesting is subject to performance, market and service conditions granted during the years ended December 31, 2025, 2024 and 2023 was $ 129.03 , $ 201.97 and $ 88.48 , respectively.
Our results of operations include stock compensation expense of $ 53.5 million, $ 63.1 million and $ 48.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. We recognized excess tax benefits for stock options exercised and RSUs vested of $ 6.0 million, $ 27.6 million and $ 16.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. The total fair value of RSUs vested during the years ended December 31, 2025, 2024 and 2023 was $ 59.1 million, $ 53.6 million and $ 37.6 million, respectively.
As of December 31, 2025, there was $ 72.0 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average period of 2.0 years.
11. Income Taxes
The components of income tax expense (benefit) were as follows for the years ended December 31:
(in thousands)
Current:
Federal
State
Total current tax expense
Deferred:
Federal
State
Total deferred tax expense (benefit)
Total
Federal
State
Total income tax expense
Temporary differences, which give rise to deferred tax assets and liabilities, were as follows as of December 31:
(in thousands)
Deferred tax assets related to:
Operating lease liabilities
Operating loss and credit carryforwards
Insurance reserves
Accrued expenses
Stock-based compensation expense
Accounts receivable
Inventories
Other
Total deferred tax assets
Deferred tax liabilities related to:
Property, plant and equipment
Goodwill and other intangible assets
Operating lease right-of-use assets
Prepaid expenses
Total deferred tax liabilities
Net deferred tax liability
A reconciliation of the statutory federal income tax rate to our effective rate is provided below for the years ended December 31:
($ amounts in thousands)
U.S. federal statutory tax rate
State and local income taxes, net of federal income tax effect (1)
Tax credits
Research and development tax credits
Other
Nontaxable or nondeductible items
Share-based payment awards
Other
Changes in unrecognized tax benefits
Other adjustments
Effective tax rate
(1) State taxes in California, Florida, and Texas made up the majority (greater than 50 percent) of the tax effect in this category.
The total income taxes paid, net of refunds, were as follows for the years ended December 31:
(in thousands)
Federal
State
Texas
California
Other
Total State
Total Taxes Paid
We have $ 278.6 million of state net operating loss carryforwards and $ 4.9 million of state tax credit carryforwards expiring at various dates through 2055 . We also have $ 177.2 million of federal net operating loss carryforwards and $ 65.4 million of federal tax credit carryforwards, the majority of which have no expiration date. We evaluate our deferred tax assets on a quarterly basis to determine whether a valuation allowance is required. In accordance with the Income Taxes topic of the Codification, we assess
whether it is more likely than not that some or all of our deferred tax assets will not be realized. Significant judgment is required in estimating valuation allowances for deferred tax assets, and in making this determination, we consider all available positive and negative evidence and make certain assumptions. The realization of a deferred tax asset ultimately depends on the existence of sufficient taxable income in the applicable carryforward period. Changes in our estimates of future taxable income and tax planning strategies will affect our estimate of the realization of the tax benefits of these tax carryforwards. As of December 31, 2025, or 2024 , we carried no valuation allowances against our net deferred tax assets.
We base our estimate of deferred tax assets and liabilities on current tax laws and rates. In certain cases, we also base our estimate on business plan forecasts and other expectations about future outcomes. Changes in existing tax laws or rates could affect our actual tax results, and future business results may affect the amount of our deferred tax liabilities or the valuation of our deferred tax assets over time. Due to uncertainties in the estimation process, particularly with respect to changes in facts and circumstances in future reporting periods, as well as the residential homebuilding industry’s cyclicality and sensitivity to changes in economic conditions, it is possible that actual results could differ from the estimates used in previous analyses.
The balance for uncertain tax positions, excluding penalties and interest, was $ 20.3 million and $ 19.7 million as of December 31, 2025, and 2024 , respectively, with $ 0.6 million, $ 0.5 million and $ 2.9 million re corded in the Company’s consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023, respectively. We accrue interest and penalties on our uncertain tax positions as a component of our provision for income taxes. We accrued no significant interest and penalties in 2025, 2024 or 2023.
We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions and in very limited situations, foreign jurisdictions. Based on completed examinations and the expiration of statutes of limitations, we have concluded all U.S. federal income tax matters for years through 2018 . We are currently under IRS audit for various aspects of our 2019, 2020, and 2021 tax years. We report income-based tax in 42 states with various years open to examination.
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released Model Global Anti-Base Erosion rules under Pillar Two. These rules provide for the taxation of large multinational corporations at a minimum rate of 15 %, calculated on a jurisdictional basis. Countries in which we operate enacted legislation to implement aspects of the Pillar Two rules beginning in 2024, with certain remaining impacts effective from January 1, 2025. Pillar Two did not have a material impact on our consolidated financial statements.
On July 4, 2025, H.R.1 - One Big Beautiful Bill was enacted into law (the “Act”). The Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100 % bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The Company’s deferred income tax liabilities as of December 31, 2025 and 2024 were $ 178.0 million and $ 148.2 million , respectively. The increase was primarily due to the bonus depreciation and domestic research cost expensing elements of the Act. The Act did not have a material impact on our income tax expense for the year ending December 31, 2025 . The Act has multiple effective dates, with certain provisions effective in the Company’s fiscal 2025 and others becoming effective in fiscal 2026. With further guidance from the U.S. Treasury and IRS expected, the Company is continuing to analyze the full impact of the Act on the Company’s financial statements and related disclosures. We anticipate the Act to have a material impact on our future financial results including cash flows. The permanent extension of 100 % bonus depreciation and reinstating the expensing of domestic research costs has reduced our cash tax payments in the current year, and is anticipated to reduce our cash tax payments and increase our operating cash flows in future years.
12. Employee Benefit Plans
We maintain active defined contribution 401(k) plans under which our employees are eligible to participate in the plan, subject to certain employment eligibility provisions. Participants can contribute up to 75 % of their annual compensation, subject to federally mandated maximums. Participants are immediately vested in their own contributions. We match a certain percentage of the contributions made by participating employees, subject to IRS limitations. Our matching contributions are subject to a pro-rata five-year vesting schedule. We recognized expense of $ 38.1 million , $ 37.6 million and $ 36.5 million in 2025, 2024 and 2023, respectively, for contributions to the plan.
The Company contributes to multiple collectively bargained union retirement plans including multiemployer plans. The Company does not administer the multiemployer plans, and contributions are determined in accordance with the provisions of negotiated labor contracts and subject to the normal risks of participating in these types of plans, including potentially being required to pay that plan an amount to stop participating (“withdrawal liability”). Contributions to the plans for the years ended December 31, 2025, 2024 and 2023 were not material.
13. Commitments and Contingencies
As of December 31, 2025, we had outstanding letters of credit totaling $ 79.6 million under our Revolving Facility that principally support our self-insurance programs.
The Company has a number of known and threatened construction defect legal 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. Although the Company cannot estimate a reasonable range of loss based on currently available information, the resolution of these matters could have a material adverse effect on the Company's financial position, results of operations or cash flows.
In addition, we are involved in various other claims and lawsuits incidental to the conduct of our business in the ordinary course. We carry insurance coverage in such amounts in excess of our self-insured retention as we believe to be reasonable under the circumstances and that may or may not cover any or all of our liabilities in respect of such claims and lawsuits. Although the ultimate disposition of these other proceedings cannot be predicted with certainty, management believes the outcome of any such claims that are pending or threatened, either individually or on a combined basis, will not have a material adverse effect on our consolidated financial position, cash flows or results of operations. However, there can be no assurances that future adverse judgments and costs would not be material to our results of operations or liquidity for a particular period.
14. Significant Segment Expenses
The accounting policies of our reportable segment are consistent with the accounting policies described in Note 2 to these consolidated financial statements. The primary measures regularly provided to the CODM, including revenue, gross margin and income before income taxes, are shown in these consolidated financial statements. The CODM uses these measures to assess performance for the reportable segment and to decide how to allocate resources. Gross margin and income before income taxes are driven by the segment’s significant expense items of cost of sales and compensation and benefits, as well as other segment items. Cost of sales is shown in these consolidated financial statements. Compensation and benefits were $ 2.2 billion , $ 2.3 billion and $ 2.3 billion for the years ended December 31, 2025, 2024 and 2023, respectively, a nd are reported within selling, general, and administrative expenses in these consolidated financial statements. Other segment items are substantially all the remaining selling, general, and administrative expenses reported in these consolidated financial statements. The measure of segment assets is reported on the balance sheet as total consolidated assets.
15. Subsequent Events
Business Combination
On January 2, 2026 , we completed the acquisition of Premium Building, a truss and wall panel products supplier, serving customers in eastern New York.
The accounting for this business combination has not been completed at the date of this filing given the proximity of the acquisition date.
I tem 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
I tem 9A. Controls and Procedures
Disclosure Controls Evaluation and Related CEO and CFO Certifications. Our management, with the participation of our CEO and principal financial officer (“CFO”) conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this annual report.
Certifications of our CEO and our CFO, which are required in accordance with Rule 13a-14 of the Exchange Act, are attached as exhibits to this annual report. This “Controls and Procedures” section includes the information concerning the controls evaluation referred to in the certifications, and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.
Limitations on the Effectiveness of Controls. We do not expect that our disclosure controls and procedures will prevent all errors and all fraud. A system of controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Because of the limitations in all such systems, no evaluation can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Furthermore, the design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how unlikely. Because of these inherent limitations in a cost-effective system of controls and procedures, misstatements or omissions due to or may occur and not be detected.
Scope of the Controls Evaluation. The evaluation of our disclosure controls and procedures included a review of their objectives and design, the Company’s implementation of the controls and procedures and the effect of the controls and procedures on the information generated for use in this annual report. In the course of the evaluation, we sought to identify whether we had any data errors, control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were being undertaken if needed. This type of evaluation is performed on a quarterly basis so that conclusions concerning the effectiveness of our disclosure controls and procedures can be reported in our quarterly reports on Form 10-Q and in our annual report on Form 10-K. Many of the components of our disclosure controls and procedures are also evaluated by our internal audit department, our legal department and by personnel in our finance organization. The overall goals of these various evaluation activities are to monitor our disclosure controls and procedures on an ongoing basis, and to maintain them as dynamic systems that change as conditions warrant.
Conclusions regarding Disclosure Controls. Based on the required evaluation of our disclosure controls and procedures, our CEO and CFO have concluded that, as of December 31, 2025, we maintained disclosure controls and procedures that were effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with existing policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control — Integrated Framework (2013 ) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework set forth in Internal Control — Integrated Framework (2013) , our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control over Financial Reporting. In July 2025, we began deploying a new ERP system. We have made changes to our internal control over financial reporting to address the related processes and systems. We believe our new ERP system will facilitate better transactional reporting and oversight, security, and enhance our internal control over financial reporting. We will continue to evaluate any further changes in our internal control over financial reporting over the course of the implementation of the new ERP system, which is scheduled to occur in phases over the next several years.
Item 9B. Othe r Information
None .
Item 9C. Disclosure Regarding Foreign J urisdictions That Prevent Inspections
Not applicable.
P ART III
I tem 10. Directors, Executive Officers and Corporate Governance
The information required by this item, other than the information regarding the Code of Business Conduct and Ethics and Insider Trading Policy set forth below, appears in our definitive proxy statement for our annual meeting of stockholders to be held May 14, 2026 under the captions “Proposal 1 — Election of Directors,” “Continuing Directors,” “Information Regarding the Board and Its Committees,” “Corporate Governance,” “Delinquent Section 16(a) Reports,” and “Executive Officers of the Registrant,” which information is incorporated herein by reference.
Code of Business Conduct and Ethics
Builders FirstSource, Inc. and its subsidiaries endeavor to do business according to the highest ethical and legal standards, complying with both the letter and spirit of the law. Our board of directors approved a Code of Business Conduct and Ethics that applies to our directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees. Our Code of Business Conduct and Ethics is administered by a compliance committee made up of representatives from our legal, human resources, finance and internal audit departments.
Our employees are encouraged to report any suspected violations of laws, regulations and the Code of Business Conduct and Ethics, and all unethical business practices. We provide continuously monitored hotlines for anonymous reporting by employees.
Our board of directors has also approved a Supplemental Code of Ethics for the Chief Executive Officer, President, and Senior Financial Officers of Builders FirstSource, Inc., which is administered by our general counsel.
Both of these policies are listed as exhibits to this annual report on Form 10-K and can be found in the “Investors” section of our corporate website at: www.bldr.com.
Stockholders may request a free copy of these policies by contacting the Corporate Secretary, Builders FirstSource, Inc., 6031 Connection Drive, Suite 400, Irving, Texas 75309, United States of America.
In addition, within four business days of:
Any amendment to a provision of our Code of Business Conduct and Ethics or our Supplemental Code of Ethics for Chief Executive Officer, President and Senior Financial Officers of Builders FirstSource, Inc. that applies to our chief executive officer, chief financial officer or chief accounting officer as it relates to one or more of the items set forth in Item 406(b) of Regulation S-K; or
The grant of any waiver, including an implicit waiver, from a provision of one of these policies to one of these officers that relates to one or more of the items set forth in Item 406(b) of Regulation S-K,
We will provide information regarding any such amendment or waiver (including the nature of any waiver, the name of the person to whom the waiver was granted and the date of the waiver) on our website at the Internet address above, and such information will be available on our website for at least a 12-month period. In addition, we will disclose on our website at the Internet address above any amendments and waivers to our Code of Business Conduct and Ethics or our Supplemental Code of Ethics for Chief Executive Officer, President and Senior Financial Officers of Builders FirstSource, Inc. that relate to any element of the definition of “code of ethics” enumerated in Item 406(b) of Regulation S-K under the Exchange Act.
Insider Trading Policy
We have an Insider Trading Policy governing the purchase, sale and other dispositions of our securities that applies to all of our personnel, including directors, officers and employees and other covered persons. The Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, as well as applicable listing standards. A copy of the Insider Trading Policy is filed as Exhibit 19.1 to this report.
I tem 11. Executive Compensation
The information required by this item appears in our definitive proxy statement for our annual meeting of stockholders to be held May 14, 2026, under the captions “Executive Compensation and Other Information,” “Director Compensation — Compensation of Directors,” and “Compensation Committee Interlocks and Insider Participation,” which information is incorporated herein by reference.
I tem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item appears in our definitive proxy statement for our annual meeting of stockholders to be held on May 14, 2026, under the caption “Securities Owned by Directors, Executive Officers, and Certain Beneficial Owners” and “Equity Compensation Plan Information,” which information is incorporated herein by reference.
I tem 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item appears in our definitive proxy statement for our annual meeting of stockholders to be held May 14, 2026, under the caption “Election of Directors and Management Information,” “Information Regarding the Board and its Committees,” and “Certain Relationships and Related Party Transactions,” which information is incorporated herein by reference.
I tem 14. Principal Accountant Fees and Services
The information required by this item appears in our definitive proxy statement for our annual meeting of stockholders to be held May 14, 2026, under the caption “Ratification of Selection of Independent Registered Public Accounting Firm — Fees Paid to PricewaterhouseCoopers LLP,” which information is incorporated herein by reference.
P ART IV
Item 15. Exhibits and Fina ncial Statement Schedules
(a) (1) See the index to consolidated financial statements provided in Item 8 for a list of the financial statements filed as part of this report.
(2) Financial statement schedules are omitted because they are either not applicable or not material.
(3) The following documents are filed, furnished or incorporated by reference as exhibits to this report as required by Item 601 of Regulation S-K.
Exhibit
Number
Description
Amended and Restated Certificate of Incorporation of Builders FirstSource, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report of Form 8-K, filed with the Securities and Exchange Commission on May 27, 2025, File Number 001-40620)
Amended and Restated By-Laws of Builders FirstSource, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 27, 2025, File Number 001-40620)
Indenture, dated as of February 11, 2020, among the Company, the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 11, 2020, File Number 0-51357)
Indenture, dated as of July 23, 2021, among Builders FirstSource, Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 23, 2021, File Number 001-40620)
Second Supplemental Indenture, dated as of January 21, 2022, among Builders FirstSource, Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee (form of Note included therein) (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 21, 2022, File Number 001-40620)
Indenture, dated as of June 15, 2022, among Builders FirstSource, Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 16, 2022, File Number 001-40620)
Indenture, dated as of February 29, 2024, among Builders FirstSource, Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 29, 2024, File Number 001-40620)
Indenture, dated as of May 8, 2025, among Builders FirstSource, Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 8, 2025, File Number 001-40620)
Description of Capital Stock
Amended and Restated ABL Credit Agreement, dated as of July 31, 2015, among Builders FirstSource, Inc., SunTrust Bank, as administrative agent and collateral agent, and the lenders and financial institutions party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Securities Exchange Commission on August 6, 2015, File Number 0-51357)
Amendment No. 1 to Credit Agreement, dated as of March 22, 2017, among Builders FirstSource, Inc., SunTrust Bank, as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 28, 2017, File Number 0-51357)
Amendment No. 2 to Credit Agreement, dated as of April 24, 2019, among Builders FirstSource, Inc., Truist Bank (as successor by merger to SunTrust Bank), as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 30, 2019, File Number 0-51357)
Amendment No. 3 to Credit Agreement, dated as of January 29, 2021, among Builders FirstSource, Inc., SunTrust Bank, as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 3 2021, File Number 0-51357)
Amendment No. 4 to Credit Agreement, dated as of December 17, 2021, among the Company, Truist Bank (as successor by merger to SunTrust Bank), as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 22, 2021, File Number 001-40620)
Amendment No. 5 to Credit Agreement, dated as of February 4, 2022, among the Company, Truist Bank (as successor by merger to SunTrust Bank), as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 8, 2022, File Number 001-40620)
Amendment No. 6 to Credit Agreement, dated as of January 17, 2023, among the Company, Truist Bank (as successor by merger to SunTrust Bank), as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 23, 2023, File Number 001-40620)
Amendment No. 7 to Credit Agreement, dated as of April 3, 2023, among the Company, Truist Bank (as successor by merger to SunTrust Bank), as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 3, 2023, File Number 001-40620)
Amendment No. 8 to Credit Agreement, dated as of May 20, 2025, among the Company, Bank of America, N.A., as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-k, filed with the Securities and Exchange Commission on May 22, 2025, File Number 001-40620)
ABL/Bond Intercreditor Agreement, dated as of May 29, 2013, among Builders FirstSource, Inc. and certain of its subsidiaries, as grantors, SunTrust Bank, as ABL agent, and Wilmington Trust, National Association, as notes collateral agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Securities Exchange Commission on June 3, 2013, File Number 0-51357)
Amended and Restated ABL Collateral Agreement, dated as of July 31, 2015, among the Company, certain of its subsidiaries, and SunTrust Bank (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed with the Securities Exchange Commission on August 6, 2015, File Number 0-51357)
Notes Collateral Agreement, dated as of May 30, 2019, among Builders FirstSource, Inc., certain of its subsidiaries, and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 31, 2019, File Number 0-51357)
Amended and Restated ABL Guarantee Agreement, dated as of July 31, 2015, among the Guarantors (as defined therein) and SunTrust Bank (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K, filed with the Securities Exchange Commission on August 6, 2015, File Number 0-51357)
Lease and Master Agreement Guaranty, dated as of July 31, 2015, by the Company in favor of LN Real Estate LLC (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission on November 9, 2015, File Number 0-51357)
Builders FirstSource, Inc. 2014 Incentive Plan (incorporated herein by reference to Appendix A of the Company’s Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on April 11, 2014, File Number 0-51357)
Amendment to the Builders FirstSource, Inc. 2014 Incentive Plan (incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on April 14, 2016, File Number 0-51357)
Second Amendment to the Builders FirstSource, Inc. 2014 Incentive Plan (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 26, 2021, File Number 0-51351)
2019 Form of Builders FirstSource, Inc. 2014 Incentive Plan Restricted Stock Unit Award Certificate (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, filed with the Securities and Exchange Commission on May 3, 2019, File Number 0-51357)
Builders FirstSource, Inc. Director Compensation Policy (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 22, 2024, File Number 001-40620)
Builders FirstSource, Inc. Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.13 to Amendment No. 3 to the Registration Statement of the Company on Form S-1, filed with the Securities and Exchange Commission on May 26, 2005, File Number 333-122788)
Builders FirstSource, Inc. Executive and Key Employee Severance Plan (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 28, 2023, File Number 001-40620)
Builders FirstSource, Inc. Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 1, 2022, File Number 001-40620)
Builders FirstSource, Inc. Supplemental Code of Ethics (incorporated by reference to Exhibit 14.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission on March 13, 2006, File Number 0-51357)
Insider Trading Policy
Subsidiaries of the Registrant
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
Power of Attorney (included as part of signature page)
Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Peter M. Jackson as Chief Executive Officer
Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Pete Beckmann as Chief Financial Officer
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Peter M. Jackson as Chief Executive Officer and Pete Beckmann as Chief Financial Officer
Compensation Recoupment Policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 22, 2024, File Number 001-40620)
The following financial information from Builders FirstSource, Inc.’s Form 10-K filed on February 17, 2026, formatted in Inline eXtensible Business Reporting Language (“Inline XBRL”): (i) Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2025, 2024 and 2023, (ii) Consolidated Balance Sheets at December 31, 2025 and 2024, (iii) Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023, (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023, and (v) the Notes to Consolidated Financial Statements.
The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, has been formatted in Inline XBRL.
* Filed herewith
** Builders FirstSource, Inc. is furnishing, but not filing, the written statement pursuant to Title 18 United States Code 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, of Peter M. Jackson, our Chief Executive Officer, and Pete R. Beckmann, our Chief Financial Officer.
+ Indicates a management contract or compensatory plan or arrangement
(b) A list of exhibits filed, furnished or incorporated by reference with this Form 10-K is provided above under Item 15(a)(3) of this report. Builders FirstSource, Inc. will furnish a copy of any exhibit listed above to any stockholder without charge upon written request to the Corporate Secretary, 6031 Connection Drive, Suite 400, Irving, Texas 75039.
(c) Not applicable
Item 16. Form 10-K Summary
None.
SIGNAT URES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 17, 2026
BUILDERS FIRSTSOURCE, INC.
/s/ PETER M. JACKSON
Peter M. Jackson
Chief Executive Officer and Director
The undersigned hereby constitute and appoint Minator Azemi and his substitutes our true and lawful attorneys-in-fact with full power to execute in our name and behalf in the capacities indicated below any and all amendments to this report and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and hereby ratify and confirm all that such attorney-in-fact or his substitutes shall lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ PETER M. JACKSON
Chief Executive Officer and Director
February 17, 2026
Peter M. Jackson
(Principal Executive Officer)
/s/ PETE R. BECKMANN
Executive Vice President and Chief Financial Officer
February 17, 2026
Pete R. Beckmann
(Principal Financial Officer)
/s/ MATTHEW TRESTER
Vice President and Controller
February 17, 2026
Matthew Trester
(Principal Accounting Officer)
/s/ PAUL S. LEVY
Chairman and Director
February 17, 2026
Paul S. Levy
/s/ MARK ALEXANDER
Director
February 17, 2026
Mark Alexander
/s/ CORY J. BOYDSTON
Director
February 17, 2026
Cory J. Boydston
/s/ DIRKSON R. CHARLES
Director
February 17, 2026
Dirkson R. Charles
/s/ CLEVELAND A. CHRISTOPHE
Director
February 17, 2026
Cleveland A. Christophe
/s/ WILLIAM B. HAYES
Director
February 17, 2026
William B. Hayes
/s/ BRETT N. MILGRIM
Director
February 17, 2026
Brett N. Milgrim
/s/ JAMES O’LEARY
Director
February 17, 2026
James O’Leary
/s/ CRAIG A. STEINKE
Director
February 17, 2026
Craig A. Steinke
/s/ DAVE E. RUSH
Director
February 17, 2026
Dave E. Rush
/s/ CHERYL AINOA
Director
February 17, 2026
Cheryl Ainoa
/s/ MARIA REINZ
Director
February 17, 2026
Maria Renz
