Joe Appelmann, chief executive officer of Stock Building Supply, has left the company effective immediately, Stock board chairman Tim Meyer said in an e-mail to employees this morning. A new CEO has been identified and will be announced later this week, the company added.
The change at the top of America's fourth-biggest LBM operation came about seven weeks after Wolseley Plc., Stock's minority owner, reported that the investment vehicle that took control of Stock Building Supply in May 2009 incurred an after-tax loss of $45.5 million on revenue of $949.9 million in the fiscal year ended July 31. Wolseley also said it was writing off the carrying value of its investment--roughly $64.4 million--in Saturn Acquisition Holdings LLC because the firm continued to post losses in the past fiscal year and Wolseley wasn't sure whether Saturn would post dividends or other returns on investment in the future. Stock replied in a statement that same day that the company had "substantially stemmed losses from the prior year to levels at or better than similar companies" but wouldn't reveal its profit/loss situation.
Appelmann, a native of the Cincinnati area, spent more than 20 years at Stock, mainly in financial roles before moving into general management positions. He was senior vice president of operations in August 2007 when he succeeded Fenton Hord as CEO. During his 20-year tenure at Stock, Hord helped the company grow from seven yards in North Carolina with sales of $113 million to America's biggest LBM operation, with 310 locations in 34 states with $5.3 billion in sales. That growth was powered in part by Wolseley, which had purchased Stock and eagerly was acquiring lumberyards across the country.
But Appelmann's time at the helm also corresponded with America's worst housing recession in decades. Stock began bleeding red ink and Wolseley began feeling pressure from shareholders to dump Stock. In spring 2009, Wolseley sold a 51% stake in the company to the Gores Group, an investment fund based in Los Angeles. At the same time, Stock filed for protection from creditors under Chapter 11 of the federal bankruptcy code and reorganized itself. Stock emerged July 1, 2009, from Chapter 11 with roughly half its previous number of locations and a focus on just 19 markets nationwide.
By the time it had finished reorganizing, Stock was reporting 2009 sales of $1.43 billion, nearly 54% less than in 2008 and far below its peak of $5.3 billion, according to the latest ProSales 100. It ranks fifth nationally on that lists, but a merger earlier this year between then-No. 2 ABC Supply and No. 4 Bradco Supply moved Stock back to fourth place.
"Joe had a tremendous career at Stock for over 22 years and held many key posts including vice president of finance, senior vice president of logistics and chief operating officer," Meyer said in the e-mail to staff. "Joe became CEO in 2007 during the heart of the housing crisis and led the company exceptionally well through its sale to Gores and a rapid restructuring.
"No other organizational announcements are planned at this time," Meyer added. "The new CEO of Stock has been identified and will join us this week to begin his responsibilities. I look forward to making that announcement and introducing him to the organization. In the meantime, the most important priority is to focus on providing exceptional service to all of our customers."
The announcement also included a statement from Appelmann. "Stock is an exceptional place to work with a bright future," he said. "I would like to thank every associate for the courtesy and loyalty they extended to me during my tenure. My sincere hope is they will provide the same support to my successor."
In a September 2009 interview with ProSales at Stock's headquarters near Raleigh, N.C., Appelmann reflected on the challenges of leading a business during hard times.
"It just amazes me that people say, 'Gosh, I feel bad for you. You took the company over a hard time,'" he said then. "And I say, "This has always been my dream job. You don't really get to pick your spots if you're lucky enough to get the job you want. And I tell people, "You know, I don't lose a lot of sleep over when I got the company, because I know the commitment of the associates. I've got a wonderful management team, super smart. It's a good organization. As hard as all these decisions are--and some ended up on a personal, emotional level (regarding) some of the folks that have had to leave the business; that's the kind of thing you lose sleep over--I still like getting up in the morning. I still love the industry. The business is going to come back."