Select Interior Concepts Announces 2019 Third Quarter Financial Results
Atlanta -- Select Interior Concepts, Inc. announced its financial results for the third quarter ending Sept. 30, 2019.
“Our team achieved overall positive results for the quarter despite market softness experienced in our RDS segment in Southern California and changes to our supply chain in our ASG segment," said Tyrone Johnson, CEO of Select Interior Concepts. "We remain focused on driving greater efficiencies and accelerating the integration of acquisitions onto our platform. While we expect continued softness in Southern California, we are optimistic that recent increases in year-over-year housing starts and improving builder sentiment will translate into increased activity for our company in 2020.”
Net sales for the third quarter of 2019 increased by 25.0% to $159.4 million, compared to net sales of $127.6 million for the third quarter of 2018. Residential Design Services (RDS) segment sales increased 42.2% and Architectural Surfaces Group (ASG) segment sales increased 5.4%, compared to the third quarter of 2018. Net sales increased on an organic basis by $2.7 million, or 2.1%, primarily driven by growth in ASG. Overall higher volume more than offset unfavorable price/mix. Acquisitions added $29.1 million to net sales, primarily in the RDS segment.
Gross profit for the third quarter of 2019 increased by 16.1% to $42.3 million, compared to $36.5 million for the third quarter of 2018. Gross margin for the third quarter of 2019 was 26.6%, compared to 28.6% for the third quarter of 2018. The increase in gross profit is primarily due to higher net sales from acquisitions. The decrease in gross margin is primarily due to an unfavorable shift in product mix and increased costs. In the RDS segment, gross margin decreased 1.1% to 26.7% in the third quarter of 2019, from 27.8% in the third quarter of 2018, primarily due to an unfavorable product mix resulting from entry- to mid-level home building comprising a larger share of project activity in the company's markets. In the ASG segment, gross margin for the third quarter of 2019 decreased 3.1% to 26.1%, compared to 29.2% for the third quarter of 2018, primarily as a result of higher freight and labor costs predominantly due to changes to the supply chain, and increased lease expense.
For the third quarter of 2019, net income was $2.5 million, or $0.10 per share, compared to $0.8 million, or $0.03 per share for the third quarter of 2018. Net income for the third quarter of 2019 includes $2.0 million of other income, which primarily results from a change in the fair value of earnout liabilities for completed acquisitions.
EBITDA for the third quarter of 2019 increased 64.0% to $14.3 million, compared to EBITDA of $8.7 million for the third quarter of 2018. Adjusted EBITDA, which excludes the impact of equity compensation and certain non-recurring costs, for the third quarter of 2019 increased by 12.9% to $17.0 million, compared to $15.1 million for the third quarter of 2018. For the third quarter of 2019, Adjusted EBITDA as a percentage of net sales was 10.7%, compared to 11.8% for the third quarter of 2018, primarily as a result of the factors discussed above in gross margin.
For more information, visit www.selectinteriorconcepts.com.