May 5, 2010

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Latest ProSales 100 Is Out: Sales Fell an Average 24.1% in ’09; Only Seven Dealers Boosted Revenue

Revenue at America's biggest construction supply companies fell an average 24.1% in 2009, a year that saw them lay off thousands more workers and close another 250 facilities, the 2010 ProSales 100 released today reveals. ProSales 100 companies sold a total of $22.97 billion worth of goods last year. Ninety of the companies reported declines in revenue, and for 39 of them the drop exceeded 25%. Only seven of the 100 companies posted an increase in total sales, two held steady, and one dealer was brand new. The ProSales 100 survey also reveals how America’s biggest dealers are adjusting their product mix, installed sales plans, and component operations.
ProSales 100 Web Story and Charts
Digital Magazine Version of Story
ProSales 100 List Sortable by Rank, Name or Percent Sales Change
Downloadable PDF of the ProSales 100 List
News Release Version of ProSales 100 Story
ProSales 100 Top 10 Lists Since 1991

EPA Lead Rule Costing Sales at 25% of Dealers, Survey Finds

One out of four building material dealers responding to a survey on the Environmental Protection Agency's (EPA) just-enacted rule on lead-based paint say remodelers and renovators have canceled work on a project because they lack the certification needed under the new rule, a new ProSales/National Lumber and Building Material Dealers Association (NLBMDA) survey found. And one out of 20 respondents said remodelers and renovators have returned materials because of the rule.
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Buyer, Analysts Challenge Forecast That Lumber Prices Will Fall

The national forest and panel products purchasing manager for Allied Building Products Corp. took issue with a ProSales article in which veteran timber economist Paul Jannke said lumber prices are near their peak and likely will begin dropping "fairly sharply" in May or June. “Prices only move lower when mills and office wholesalers and other secondaries do not have an audience for their production,” Joseph Glitman wrote. “Clearly at this time… that is not the case.” Glitman wasn’t the only expert to take issue with Jannke. Pricing consultant Fred Ashman wrote last night that “there are still no definitive signs that mills are poised to lower prices. … We could find ourselves right back on an upward track.” And RISI published a chart (above) tracking western spruce prices and suggesting the recent price hikes might take the same track as they did in 1982-1983. In that case, prices stayed high through the summer and didn’t begin to moderate until demand dropped in the fall.
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Deals Roundup: Meek’s, E.C. Barton, East Haven Builders, Edward Hines, Garris Evans, New Bern Building Supply, Stock, Cook & Boardman, Hammond

The flurry of deals in the LBM world shows no signs of slowing from April’s torrid pace. Six transactions have been announced in the past week:
• The Midwest division of Meek's Lumber will acquire seven of E.C. Barton & Co.'s retail building material stores in southwest Missouri effective Friday. Story
• US LBM Holdings' East Haven (Conn.) Builders Supply acquired and opened a truss manufacturing operation while US LBM's Edward Hines Lumber Co. took over the Wille Lumber location in Alsip, Ill.. Meanwhile, Garris Evans Lumber Co. of Greenville, N.C., confirmed it has acquired the two-unit New Bern (N.C.) Building Supply. Story
• Stock Building Supply sold its commercial door and hardware division to the Cook & Boardman Group LLC of North Carolina, in part so that Stock can concentrate more on the residential market. Story
• Hammond Lumber Co. acquired Downeast Building Supply and Kitchen Center and will convert the Brunswick, Maine, facility into Hammond's ninth lumberyard. Story
ProSales' Deals Database
Previous ProSales Deals Articles

May’s ProSales Profiles the Most Important Dealer You Probably Don’t Know

US LBM isn’t even a year old yet, but this holding company, led by president and CEO L.T. Gibson (shown on May’s cover), already operates several dozen lumberyards in six states and is on track to post annual sales of $325 million. That would put it at roughly 15th place on this year’s ProSales 100. Equally important, US LBM seeks to grow through local initiatives rather than through centralized efficiencies. Born largely from cast-off parts of Stock Building Supply when Stock reorganized last year, US LBM aims to run an extremely lean central office and give as much authority as possible to its operating units.
Website Version of Story
Digital Magazine Version of Story

Also in Our Latest Issue: ABC Supply’s Plans, Thermal Bridging, and Building the Perfect LBM Operation

There’s plenty more to read in this month’s issue of ProSales. Click here to get the digital version of the magazine, or click any of the links below for the web version:
• Back To the Future--ABC Supply takes a first step toward big growth by going back and rededicating itself to its founder's values. Story
• Handle (Once) With Care--Affordable, reliable scanning machines and optical character recognition software are helping automate the office. Story
• Build It Right: A Bridge Too Far--Creating an effective thermal break requires builders and suppliers to rethink wood-frame construction. Story
• Product Monitor: Underdog--Manufacturers recently have introduced a variety of synthetic roof underlayments that they argue are better than felt. Story
• May’s Hot Product Finds--Featuring DuPont Corian Solid Surfaces, Liquid Nails Adhesive, ODL Doorglass, Cadsoft, and Mastic Home Exteriors. Story
• My Yardsticks: Greg Forsythe--Running an LBM center next door to Yellowstone National Park creates special challenges for this dealer. Profile
• Ground Zero--Consultant Jim Enter believes the best way to build the Perfect LBM Dealer is to think small — really small. Commentary
• New Dimensions: Wise Guys—Mike Butts suggests that your path to success might just depend on doing a few things very, very well. Commentary
• Sell Sheet: Choice Words--Use your e-newsletter to tell non-customers how you can deliver a specific good, Rick Davis recommends. Commentary
• Editor's Notes: All About/Not About You—Dealers have strongly different opinions on how important it is for the boss to be seen by all his workers. Which philosophy should you embrace? That depends. Editorial

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Big Builders Accumulate Land with Abandon

Without question, as land prices have come down, more builders are pursuing land deals, some with a vengeance. In the first quarter of its latest fiscal year, Lennar spent $154 million to acquire 3,300 homesites. During the three months ended March 31, Standard Pacific spent $50.8 million on land, versus only $3.7 million in the same quarter in 2009. A few days ago, the Irvine, Calif.-based StanPac purchased 63 lakefront lots in the Rough Hollow community in West Austin, Texas, where it intends to build 2,200- to 3,200-square-foot homes. (BUILDER)
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WebbThreads

• The Western Wood Products Association has released a new Lumber DesignEasy Joist/Rafter Spans application for the iPhone and iPad. This app enables architects, engineers, building code officials and other design professionals to quickly calculate simple joist and rafter spans for Western lumber structural grades. Lumber products sized from 2x4 to 3x16 can be selected. Its price: 99 cents.
• A recently closed Chevrolet dealership in Pasadena, Calif. has been purchased by Ganahl Lumber Co. and will be converted by the Anaheim-based company into a new store, the Los Angeles Times reports. Story
• The Wichita (Kan.) Eagle checked in recently with Star Lumber and the changes that have taken place there in recent years. “Gone are the wholesale delivery routes and the fireplace sales and installation crew,” the newspaper said. “In their place is a renewed emphasis on ‘face time,’ getting Star experts in front of customers, such as sending supply trailers to construction sites.” Those changes also include Pat Goebel taking over as president from Chris Goebel. Story
• The Environmental Protection Agency is inviting small businesses to nominate representatives to participate in a Small Business Advocacy Review Panel to help it develop fine particle emission limits for new residential wood heaters and other burning devices, such as wood stoves and hydronic heaters. Details
• The Southern Pine Council has published an updated edition of its popular booklet, Maximum Spans for Joists & Rafters. It features 46 span tables covering the most common grades of MSR, MEL and visually graded lumber. Visit www.southernpine.com to download a PDF.
• Huttig Building Products launched an updated website. It now includes a dealer locator, localized pages for each of Huttig’s locations, and a customer connections section.
• American demand for siding will grow 6.8% annually between 2009 and 2014 to reach 101.5 million squares worth $11.1 billion, the Freedonia Group forecast today. Story

Industry/Product Briefs

• Cadsoft Corp. and MiTek Industries worked together to release the Sapphire Structure Integration Module for Cadsoft’s Envisioneer software. The module enables designers, builders, and LBM dealers who use Envisioneer to communicate and collaborate with component manufacturers who use MiTek Sapphire Structure whole house design software.
• Trex, the decking and railing manufacturer, this morning reported its first quarter 2010 net loss widened to $4.6 million from a net loss of $3.1 million in the first quarter 2009. Story
• Fortune Brands--the conglomerate whose home products include such names as Moen faucets, Aristokraft and Kitchen Craft cabinets, Therma-Tru doors and Simonton windows--announced its home and security unit swung to a $22.4 million operating profit in the first quarter from a $54.9 million loss the year earlier. Sales in the unit rose 15.3% to $698.4 million. Story
• WeatherGuard has introduced a new, all-steel, low-profile saddle box that fits just above a truck’s bed rail and keeps rear sightlines open.
• CertainTeed unveiled the AcquaBead corner bad. Using a water-activated pre-applied adhesive, AquaBead can be installed without the hammering and fasteners of conventional metal or plastic corner beads, the company says.
• Roseburg said it has been accepted as a shipper/transport partner in the Environmental Protection Agency’s SmartWay Transport Partnership.
• Marvin Windows and Doors was named “Family Business of the Year” by the University of St. Thomas’s Opus College of Business.
• Versatex created www.versatex/green to spell out its green policies, stances and outlooks for the industry. Versatex says it has “reclaimed, reused and recycled in every corner of its Pittsburgh operation since its inception in 2003.”
• Sto Corp. upgraded its sample product program for 2010 by changing the substrate material used for its 8” x 8” samples, and 2” x 8” retain stick samples to a 100% recycled plastic.
• Simonton introduced a completely redesigned extruded screen frame that is now standard on select replacement and new construction windows

Do you have a question, a tip, or a sage piece of wisdom? Feel free to contact ProSales' editor, Craig Webb, at cwebb@hanleywood.com.

And don't forget you can find previous ProSales Business Updates online!