In its final report before a planned merger with BMC, Stock Building Supply today announced its net income climbed to $6 million in the third quarter, up 20% from the year-earlier period, on a 1.3% gain in net sales to $358.5 million.
"Decelerating macro conditions in certain Texas markets and extended residential construction cycle times constrained overall sales volume growth to approximately 5%, as compared to the prior year quarter," the Raleigh, N.C.-based firm reported, "while deflation in lumber and lumber sheet goods prices also restrained the year-over-year increase in net sales."
Stock, which for several years was America's biggest lumberyard (see timeline) and now ranks 10th on the ProSales 100, is slated during this quarter to merge with ninth-ranked BMC. Stock shareholders have scheduled a Dec. 1 meeting to vote on the merger, in which BMC will hold a majority stake.
Stock will bring to the merger an operation that posted gross profit of $89.1 million, up 5.6%, and a gross margin of 24.9% in the third quarter. That's a 1.1-point increase from the July-to-September 2014 quarter. The company credited higher margins on sales of structural components, which accounted for 14.2% of all sales, up from 13.9% a year earlier. Stock said it also collected a bigger share of net total sales from non-commodity products; the share of sales from lumber and sheet goods dropped to 32.7% from 34.8%.
Meanwhile, overhead expenses rose 2.2% to $75.3 million, and it incurred $1.2 million in merger-related costs.
Operating income grew to $9.6 million from a year-earlier $8.4 million.
Stock runs 69 facilities in 13 states, mainly in the Southeast, Texas, and Utah. See map showing its and BMC's locations.