ProBuild expects to post $3 billion in sales this year, one-third less than in 2008 and about half what it recorded at its peak, the chief executive officer for America's biggest building material dealers said Saturday.
But Paul Hylbert also signaled that the company is gearing up for better times ahead. He said ProBuild's employee count, which had shrunk from 21,500 at its peak to about 10,500 workers, is now back over 12,000, including more than 200 salespeople hired from competitors that had closed. "These people are adding a lot of volume to what we do," Hylbert told participants in Denver at the fall conference of the Mountain States Lumber and Building Material Dealers Association. He also noted that ProBuild has closed roughly 125 facilities since its peak; its most recent press releases say it has roughly 470 today.
Hylbert indicated that the decline in sales from last year's $4.4 billion and the 2006 peak of $6 billion is a direct result of the housing crash nationwide. Two-thirds of Denver-based ProBuild's sales come from top 100 markets, of which ProBuild is present in 80, he said, and times are tough in those places. For instance, building permits in the Naples, Fla., market are down 98% from their peak in 2005, he said. Meanwhile, outside metropolitan areas, the company is doing comparatively better and in some places will even record an increase in sales this year, he said.
As for 2010, "We want to be around to prosper, so we're going to be relatively conservative," Hylbert continued. He said that means gearing ProBuild for an environment in which there will be 575,000 to 600,000 housing starts in 2010--not much different than the annual rate recorded in August. He said that conservatism comes in part from concerns about how many bank-owned homes will be put up for sale and how many more homes will be foreclosed on. The unemployment rate, which hit 9.8% in September, is likely to go above 10%, he noted.
"There's a lot of stuff we have to work through" before a real turnaround begins, he said, and when that occurs the building material world will be different and dealers will have to be flexible. He did add one plus: ProBuild believes thousands of LBM facilities have closed in recent years, so there will be less competition.