Stock Building Supply income statement returned to the red in the third quarter of 2013 with a net loss of nearly $3 million following the second quarter’s net profit $242 million.
The Raleigh, N.C., building supply company, which launched an initial public offering in August, reported net sales of $328.5 million in the third quarter, a 28.4% increase over year-ago net sales of $255.8 million.
The IPO raised $98 million, offering 7 million shares at $14 a share, well below the initial $16 to $18 range the company earlier hoped to receive for its offering. The company said costs related to the IPO negatively impacted net income for the quarter.
Stock officials say 23.4% of the increase in sales was volume related and 5% due to increased selling prices. The increases were driven largely by a rise in single-family housing starts and rising repair and remodeling demand.
"In the third quarter, our business performance continued its positive trend of strong revenue growth,” CEO Jeff Rea said. “Additionally we completed our transition to a public company with a successful IPO on Aug. 14 which helped improve our liquidity and strengthen our balance sheet,”
“We believe our growth rate continues to outperform our industry benchmarks as revenues from new single-family construction increased approximately 31%, while repair and remodel revenues increased 28% compared to third quarter 2012,” he said.
Gross profit for the third quarter totaled $75.4 million, up $16.9 million, or 28.8%, compared to $58.5 million in the third quarter of 2012, primarily as a result of increased sales volumes. The gross margin percentage of 22.9% was unchanged compared to the prior year period.
The company’s third quarter net loss was affected by $9.3 million in IPO transaction-related costs, which included a $9 million fee for terminating our management services agreement with The Gores Group.
Rea said, "While we expect the normal seasonal and weather related slow-down in our business as we enter the winter months, we believe macroeconomic trends remain favorable for year-over-year improvement in our core markets.”