Stock Building Supply CEO Joe Appelmann clarified Sunday a published report in which he had said last week that the LBM giant was losing $1 million a day prior to its filing for bankruptcy, telling ProSales in an interview that he was referring to losses per business, not calendar, day.
Appelmann added in his e-mail to ProSales that he had been referring to the company's financial straits in April, a few weeks before Raleigh, N.C.-based Stock's British parent, sold a 51% stake in stock to a private equity group and Stock filed for protection from creditors under Chapter 11 of the federal bankruptcy code. A reorganized, slimmed-down Stock announced its emergence from Chapter 11 on July 1 and has been touting its relative financial stability.
Appelmann's comments were reported by Home Channel News as part of its coverage of Appelmann's participation Thursday in a conference in New York sponsored by two merger and acquisition firms.
Had he been referring to calendar days, the financial conditions at Stock--America's No. 2 LBM operation, according to the 2009 ProSales 100, would have been worse than previously reported. But with the clarification, the state of Stock's losses, while severe, weren't unknown.
For instance, in a Sept. 9 ProSales story based on an interview with Appelmann, it was noted that Stock had said in Chapter 11 filings that it had incurred $744 million in losses in the fiscal year ended July 31, 2008, of which $246 million were on operations and at least $430 million were restructuring and impairment provisions. There are roughly 250 business days each year, so the $246 million in operating losses works out to about $1 million per day.
Since emerging from Chapter 11, Appelmann has said Stock expects to be EBITDA positive in its current fiscal year, which June 30, 2010. EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization. It measures much of a company's core operations, particularly its cash flow.