2012 ProSales 100: Big Numbers

You could almost see chests puff out as dealers across the country handed in their ProSales 100 survey forms this year. Twelve months ago, when asked to list their major achievements, one out of every 10 responded with “We survived.” This year, they filled the survey with reports about new ventures launched, staffers hired, facilities opened, credit facilities renegotiated, deals made, and awards won.

And above all, as a group and often individually, they reported their highest sales since 2008.

This year’s ProSales 100 members collectively posted a 7.3% increase in gross sales in 2011 from their showing in 2010 to reach $26.24 billion. The group also ended 2011 with 5,387 facilities, 44 more than they had at the start of the year.

Seventy-two companies posted sales increases in 2011 from 2010, only 20 experienced a decline, and no company’s loss was greater than 20%. Contrast that with 2009, when only 10 firms grew, 90 companies reported sales declines, and 31 had sales drops exceeding 20%.

The ProSales 100 numbers also suggest that dealers held the line on staffing even as revenues rose. The 78 dealers that were on both this year’s and last year’s lists posted a 7.1% increase in sales but a 3% drop in employees. Of those 78 dealers, 33 added staff, 32 trimmed their worker count, and 13 reported no change.

ABC Supply held the top spot for the second year in a row while ProBuild, despite a 6% drop in gross sales, managed to hold onto the No. 2 position. The next four spots also were unchanged: Beacon Roofing Supply in third, Allied Building Products in fourth, 84 Lumber in fifth and L&W Supply in sixth. After that, though, Stock Building Supply slipped to ninth place from seventh, enabling two Dallas-based companies—Roofing Supply Group and Builders FirstSource—to climb to seventh and eighth places, respectively. As it did last year, BMC closed out the top 10.

The final 10 provided both the biggest percentage gain and the biggest loss. St. Petersburg, Fla.-based Tibbetts Lumber, founded by the late Linton Tibbetts—the same person who built Cox Lumber into Florida’s biggest LBM dealer—saw sales rise 2 1/2 times to $20.4 million, enabling it to enter the list in 93rd place. Meanwhile, No. 100-ranked Mentor (Ohio) Lumber & Supply—a former ProSales Dealer of the Year—recorded the biggest drop in gross sales, falling 16% to $13.9 million.

In keeping with this magazine’s focus, the ProSales 100 rankings are based on sales to professional builders and contractors only, not on gross sales. The average ProSales 100 member reported getting 85% of its revenue from pros.

As for employee counts, US LBM and SRS Acquisition, both of which also experienced the largest sales growths, added the most employees, combining for 50% of the people that started work at ProSales 100 stores in 2011. US LBM was tops with 554 employees hired, or a 61% increase in staff, while SRS Acquisition grew its workforce by 225, a 45% growth in workers. Beacon Roofing Supply was third with an additional 183 workers at the end of 2011.

ProBuild, meanwhile, cut the most employees by letting go of 1,192 people, or 11% of its 2010 workforce. ProBuild’s cuts most likely were tied to the 15 locations it closed in 2011 as well as its mid-summer reorganization that saw the Denver-based giant shut down its regional operations.

84 Lumber was next with 600 employees let go, a 15% decrease in its employee count, while ABC Supply ended 2011 with 458 fewer employees, or 7%, as it continued its merger with Bradco Supply, the specialty dealer it agreed to acquire in May 2010.

Some shifts are more noticeable when compared with numbers from when the housing market was red-hot. Take the breakdown of customers by market segment: For 2006, the ProSales 100 reported getting 38% of their revenue from single-family custom builders and another 26% from single-family production builders. By 2011, the share of revenue from custom builders taken in by this year’s ProSales 100 had dropped eight points, to 30%, while the share from single-family production builders had plummeted to just 8%. Meanwhile, the percentage of revenue attributed to remodelers jumped from 11% in 2006 to 17% in 2011.

Lumberyards with manufacturing capabilities accounted for 65% of the participants and 48% of all sales, while dealers without manufacturing capabilities made up 24% of the survey members but figured in only 6% of sales. Specialty dealers, by far the smallest group with 11 members, account for 46% of all sales. In fact, the biggest dealer without manufacturing capabilities—E.C. Barton & Co.—ranks only 16th on the entire ProSales 100 and is 20 times smaller than ABC Supply.

Some smaller dealers have feared the domination of their industry by the biggest players, and for years they had reason to do so. The share of the entire ProSales 100’s total sales represented by the top 10 rose from 55.1% in 2002 to 69% in 2006, while the top 10’s share of all ProSales 100 facilities climbed to 69.3% in 2006 from 61% four years before. But by 2011, the top 10 dealers’ share of the entire sales pie had declined to 65.6%, while their share of all facilities shrank to 59.1%.

The survey found information technology spending is on the rise. The number of dealers planning to spend 0.25% to 0.50% of sales on technology over the next year grew by six percentage points from last year to 49%. On the other hand, we asked participants a new question in the technology part of the survey regarding whether they use a customer relationship management system. Only 20% of respondents do, while 18% plan to buy a system. The other 62% had no plans to get one.

As for contractor services, 98% of respondents offered same-day delivery, making it the most common service offered. Showrooms were second, with 93% of the ProSales 100 members saying they had at least one. And volume discounts rounded out the top three, with 92% of respondents offering them.

Installed sales remains one of those areas that roughly half the ProSales 100 members embrace and the rest don’t want to get near. Windows were the No. 1 product that dealers will install, followed by cabinetry and entry doors.