Recession-era fretting at Builders FirstSource (BFS) about sales and savings have been replaced by new, growth-era concerns about truck drivers, installed sales staffing, and using technology to serve increased demand, a ProSales visit with two top BFS executives found.
Morris Tolly, senior vice president of operations at the Dallas-based company, and Chad Crow, its SVP and chief financial officer, noted that BFS is adding an average of 350 new accounts each quarter.
“We’re definitely in a growth mode,” Tolly said earlier this month during an interview at BFS’ facility in Point of Rocks, Md.
Sales are increasing alongside concerns about truck-driver availability and installed-sales staffing, Builders FirstSource senior vice president of operations Morris Tolly (left) and senior vice president and chief financial officer Chad Crow told ProSales at the Dallas-based supplier's Point of Rocks, Md., facility earlier this month.
“We certainly feel like the worst is behind us,” Crow added, saying later: “We have had an increase in overtime because we were gushing [with businesss], like everyone else.”
The housing crash savaged BFS, shrinking it from $2.34 billion in revenue and 6,600 employees in 2006 to $700 million and 2,500 workers in 2010. Sales rose to $779 million last year, but it posted a loss from continuing operations of $64.6 million. Even with that revenue decline, it still ranked 8th on this year’s ProSales100.
Sales since then have continued to grow—they jumped 32% in the second quarter from the year-earlier period—and while operating losses remain, the executives are sanguine, particularly regarding how BFS stands versus its competitors.
“If you’re telling me that nobody else is losing money, I’d have trouble believing that,” Crow said. “Housing starts dropped 77% (during the crash), and a lot of companies haven’t survived that.” The investment funds that own a majority of BFS’ shares—primarily JLL Partners and Warburg Pincus—continue to support the company strongly, he said.
BFS’ growth pains often deal with personnel. For one thing, so many truckers have left that profession that “the competition for drivers is going to be tremendous” in much of the Southeast where BFS operates, Tolly said.
Crow said there are similar problems finding workers for installed sales projects. “We lost a lot of people [during the downturn],” he said. “Getting them back is going to be a challenge.” He sees similar issues finding field supervisors for projects that BFS manages on behalf of builders.
With people so busy, the company has sought ways to reduce needless work. One way it’s doing that is with web-enabled software that enables anyone with a computer (or more likely in the field, an iPad or similar tablet) to access the day’s tasks, update a project’s status, and even open up big documents like building plans. BFS staffers said the recently rolled-out programs already have improved workers’ efficiency because they no longer have to spend hours calling central office or each other to learn a project’s status or pass along news a task that was accomplished.
BFS often is regarded as a dealer that caters primarily to big builders. Indeed, its list of top 10 customers includes such giants as Beazer Homes, D.R. Horton, Lennar, Hovnanian, and PulteGroup—all firms that most other dealers wouldn’t touch. But Crow and Tolly stressed that only about 35% of BFS’ revenue comes from members of the Builder 100. The dealer also can be found in a number of small towns throughout Dixie where it does quite well.
“When you can have relations with the small builders and a 75% market share, you can survive in a downturn,” Crow said.