A newly completed survey of more than 150 dealers across much of the nation that was intended to provide operational benchmarks also reveals that the average respondent suffered an operating loss of $1.5 million last year on $26.5 million in net sales.
The average pretax loss was $1.3 million while average EBITDA--earnings before interest, taxes, depreciation, and amortization--was a negative $544,174, according to the 2010 Building Material Operations Comparison conducted by 15 regional LBM associations. The average gross margin was $6.8 million, or 27.5% of net sales, but the average operating expense was $8.3 million, or 30.83% of net sales.
The survey isn't truly representative of the entire United States because it didn't include any participants from New England, New York, or Indiana. But it does include dealers from all other parts of the country. The project was led by the Construction Suppliers Association, the trade group serving dealers in Georgia and Alabama.
Among the other key metrics revealed in the survey:
- Accounts Receivable days: 44
- Percentage of debts at least 90 days past due: 19.7%
- Turns per year: 7.11
- Total selling payroll as a percentage of net sales: 4.96%
- Salaries plus bonuses as a share of net sales: 15.25%
- Warehouse and delivery salaries as a share of net sales: 3.68%
- Company expenses (rent, utilities, telecom, etc.) as percentage of total sales: 3.29%
- Administrative salaries as a percentage of net sales: 2.63%
- Total employee costs as a percentage of total expenses: 61.78%
- Operating income/loss as percentage of sales: -3.37%
- Pretax income/loss as percentage of sales: -2.24%
More results, plus some regional breakdowns, are available in the full report. Contact your state's LBM association for details on how to buy one.