Baseball fanatics have bickered over statistics practically since the game was invented. LBM’s followers can get into the same arguments, too, particularly this year: the 25th anniversary of the ProSales 100. Here are the numbers--and the perspectives--that we found most striking this year.
Who's On First?
This year’s ProSales 100 generated $49.36 billion in sales in 2016. In nominal terms, that’s a record performance, and it is 15.6% better than what this same top 100 collected in 2015.
But if you adjust the totals to reflect the dollar’s inflation through March, the PS100's sales for 2006 beat 2016, $54.03 billion to $50.79 billion. And after inflation, 2005 does better than any other year at $55.04 billion.
That said, consider this: Like baseball's steroid era, residential construction was pumped up between 2004 and 2007 by a housing mania that, in retrospect, never should have happened. In 2005 we had nearly 2.1 million housing starts. In 2016, there were just 1.2 million .
When you examine inflation-adjusted revenue per housing start, the current ProSales 100 did 64% better than in 2005 because last year, in today’s dollars, dealers generated $43,272 per start while they took in only $26,357 per start in 2005. Such a performance suggests today’s biggest dealers are operating with unmatched efficiency.
Growth All Around
The number of facilities managed by PS100 members grew 3.9% to 4,330, while the personnel count as of the start of this year climbed 10.2% to 101,891.
Specialty Dealers Dominate
Thanks in part to a new arrival in GMS, the drywall and steel studs dealer that went public last year and boasted $2.23 billion in revenue, specialty dealers continued their outsized influence: The 11 specialty dealers on the list comprised 42% of the entire group’s revenue. Specialty dealers ranked first, third, seventh, eighth, ninth, and 10th on the overall list.
Sixty percent of the entire PS100 consists of lumberyards with manufacturing units. Together they account for 51% of all revenue.
The 28 lumberyards without manufacturing brought in another 7%, and there’s one millwork specialist on the list—Texas Plywood & Lumber—that contributed 0.1% to the whole group’s revenue. (View top 10 rankings by firm type.)
Sales per Location and Per Facility
By these yardsticks, smaller and lumber specialty dealers often beat their bigger counterparts. Six of the top seven firms in terms of sales per location were in the bottom 50, and five ranked 74th and higher. As for sales per employee, the more wholesale-oriented firms like Shelter Products and Matheus Lumber led the way. Click here for the top 20 lists.
The Big 10
At $34.45 billion, the 10 biggest firms account for just under 70% of all 100’s revenues, and their 2,838 facilities are nearly 66% of that total. Compared with their year-earlier performance, the top 10 outpaced the next 90 on three major categories we follow: revenue growth (up 17.2% for the top 10, 11.9% for the other 90), facilities (up 3.9% vs. a 2.9% rise), and personnel (a 10.2% gain at the top 10 vs. a 7.9% increase for the rest).
Mainly Up
Ninety-one of the 100 companies reported revenue increases in 2016 over the year earlier, one was unchanged, seven posted declines, and L&W can’t be counted. Seven of the top 10 for growth were ranked 64th or higher, but keep in mind that the smaller you are, the bigger the percentage when sales rise. Two other leaders in percentage growth—Beacon Roofing and GMS—had lots of acquisitions. And then there’s American Builders Supply, which has been relatively under the radar since Bill Myrick, the former head of ProBuild, took it over a few years back. It grew 36.3% in 2016 to hit $131.5 million, good for 40th place. Multifamily was a big contributor to growth, the Florida-based company reported.
Who’s Hiring?
It’s natural that four of 2016’s most acquisition-minded companies occupied the top ranks in hiring growth. ABC Supply, Beacon Roofing, US LBM, and GMS brought in 6,641 new workers. That’s 70.5% of all 100 companies’ net increase.
It also makes sense that the biggest drop in employment involved a company whose major acquisitions took place in 2015: BMC. That company spent 2016 seeking efficiencies following its takeover of PS100 mainstays Stock Building Supply, VNS, and Robert Bowden Inc. Its employee count fell by 600, or 6.3%, to 9,000. No other PS100 member cut staff by more than 45, but a few companies had cuts that in percentage terms were more severe.
Revenue Sources
The share of revenue that a 2017 ProSales 100 dealer gets from single-family custom builders averaged 33.5%, while for single-family production homes it was 13.1% and for multifamily home builders it was 12.1%. That’s down from a decade ago for custom and production builders, but back then we didn’t ask for separate breakouts involving revenue from installed sales and component manufacturing. For the 79 dealers who gave us revenue percentages, those two categories accounted for 7.5% of overall income. Odds are, the vast majority of those revenues went to the home builders.
Manufacturing
Nearly two-thirds of PS100 dealers manufacture components now, most notably roof and floor trusses and pre-hung doors. Most plan to stick with what they are doing, except for the 13% of respondents who say they may start fabricating pre-built stairs and the 11% that envision building wall panels.
Prospects
Nearly 84% of the 85 companies answering this part of our survey said they expect revenues from new construction to grow in 2017. That’s more than remodeling, in which 64.7% predict growth, retail sales (45.9%), and multifamily business (44.7%). A slightly higher percentage of dealers expect multifamily to show no change, and “no change” topped “grow” on the forecast list for commercial sales, installed sales, and component manufacturing.
The only notable areas in which some dealers predicted shrinkage were in retail sales, with 5.9% expecting a downturn, and multifamily business, where 4.7% of dealers predicted declines.
What’s in the Inventory?
Visit a ProSales 100 dealer and there’s a 93% chance you’ll be able to buy interior and exterior doors. Windows and treated lumber are next, both findable at 92 of the 100 operations. Thirty-one of the 38 products that we specified in the survey can be found in the inventories of at least 40 of the 100 companies, and 19 of the 38 products were in at least 70% of the PS100.
Tech Plans
Dealers remain frugal about technology. Of the 74 dealers who disclosed their plans—a number that excludes several of the biggest firms—one-third expect to spend less than 33% of their sales revenue on technology while 39% plan to spend between a quarter and a half of a percentage point on tech.
Historic Contrasts
Our first ProSales 100, in 1992, kicks off with 84 Lumber as the leader at $848 million. Only 40 of the ProSales 100 companies got 90% or more of their revenues from pros, while this year, 64 do. And we wrote then that a good sales rep could bring in about $1.2 million; that’s nearly $2.2 million in today’s dollars. For most of the full-service lumberyards on the upper half of this year’s list, sales per outside rep regularly topped $3 million and sometimes skied as high as $9 million. (What happened to the original ProSales 100? Look here.)
