The latest version of one of the year's best surveys on the state of independent dealers finds those LBM operations boosted their gross margins slightly and recorded increased sales, but they didn't make major improvements to their bottom lines.
The Building Materials Operations Comparison (BMOC) report, released recently, found that roughly 170 dealers located in 23 states posted an average gross margin of 26.84% on average sales of $30.4 million in 2014. That compares with the 25.94% gross margin on an average of $16 million in sales in 2013 that was reported by 150 dealers from 20 states. It's not clear how much sales growth came from the 150 dealers who took part last year (and, historically, take part every year) and how much came from the addition of 20 more dealers. Sales for members of the ProSales 100 rose an average 10.3% in 2014.
Last year, companies in the BMOC reported their operating income amounted to just 1.01% of sales while "other income" from sources like finance charges totaled 1.19% of sales. This year, things returned to a more customary arrangement: dealers' operating income in 2014 was 1.99% of sales while "other income" was 0.86%.
Pretax income as a percent of sales grew to 2.85% from 2013's 2.2%. EBITDA--earnings before interest, taxes, depreciation, and amortization--climbed to 4.11% of sales from 3.67%.
While better, several management experts who reviewed the numbers said they would have thought these dealers would have generated bigger profits in 2014. They speculated that one reason why might be because a number of the participating dealers hail from rural areas or metro markets in Southeastern and Northeastern areas that haven't enjoyed the home construction speedup witnessed in places like Texas. Anecdotal evidence suggests results should be better this year, they told ProSales.
The BMOC report is produced by the Construction Suppliers Association, an association for dealers from Georgia to Louisiana. It's available for purchase for $500 by
or by calling (678) 674-1860.