The CEO and CFO of Builders FirstSource told analysts today they aren't interested in pursuing a purchase of any or all parts of Stock Building Supply, but they might want to pick up some cheap inventory if Stock's U.K.-based parent decides to close the company.
"Our focus is on maintaining liquidity. We're not looking to be active in any [merger and acquisition] activity," Builders FirstSource (BFS) chief financial officer Charles Horn declared. And when BFS president Floyd Sherman was asked if he was interested in picking up any facilities given the large number of closures nationwide, her replied: "It won't happen anytime in the near future."
The leaders of the Dallas-based and top 10 ProSales 100 dealer were responding to financial analysts as part of their presentation of BFS' first-quarter results. Late Thursday, BFS announced its first-quarter net loss doubled to $30.6 million from a net loss of $15.8 million during the same period a year ago. It also reported that for the three-month period ended March 31, sales fell 37% to $163.8 million from $259.9 million.
Horn said he had no special insight into what has happened since Wolsely Plc of England revealed on March 6 that it is seeking a joint venture partner to run Stock, America's No. 2 LBM operation. Wolseley said that if it cannot find a partner by Aug. 1 it will shed Stock.
Sherman noted that Stock and BFS compete in a number of markets from the Washington, D.C., area down the Atlantic and Gulf coasts to Texas.
Horn said he sees two consequences if Wolseley cannot find a partner or buyer for Stock. Short-term, Stock could hurt BFS' earnings if it seeks to eliminate inventory by selling it at bargain-basement prices, Horn said, although he said that if the prices were truly great BFS might consider picking up some of that inventory. Long-term, Stock's demise would eliminate competitor and thus help BFS potentially increase its market share, he said.