The purpose of the ProSales 100 Issue is to help readers understand the financial health of the industry, business strategies that worked and didn’t, and emerging trends. This becomes even more crucial during challenging and uncertain times, like today. The novel coronavirus (COVID-19) has embroiled businesses of all stripes in a sudden and devastating health and economic crisis. For many LBM dealers, it has changed the nature of their business, but not their core value, which remains intact and essential. Fortunately, many dealers finished 2019 with record sales, putting them in a better position to take on the challenges associated with the coronavirus, but signs of weakness have emerged.
Collectively, the dealers on the 2020 ProSales 100 list grew their revenue for the 10th consecutive year, reaching $62.9 billion last year, besting 2018’s total by $1.48 billion. It’s an impressive feat, especially considering industry headwinds such as weather challenges, the trade war with China, commodity price deflation, and the ongoing industrywide labor shortage. Despite all of this, housing starts picked up in the second half of the year, soaring from a low of about 1.15 million in February to cap the year at about 1.6 million starts in December and enabling the ProSales 100 dealers to collectively inch their way toward growth.
Some of the dealers did more than their fair share of heavy lifting to raise the group’s total revenue. Starting at the top of the list, ABC Supply was a big contributor to the group’s success, soaring revenue by more than $1.1 billion to $11.68 billion last year. That increase alone is more than the entire revenue of the 12th ranked company. Opening 16 locations during the year certainly helped.
Beacon Building Products (formerly Beacon Roofing Supply) surpassed last year’s revenue by $217 million, a 3.1% increase, to break $7 billion in overall sales. This increase, combined with Builders FirstSource’s (BFS’s) 5.2% drop in revenue, enabled Beacon to overtake BFS for the No. 2 spot, representing the only change to the leaderboard among the top 10 dealers.
GMS had the highest annual percentage jump in revenue of the top 10 dealers with a 22.3% climb to $3.25 billion in revenue last year. The company’s success was driven largely by higher sales volumes and acquisitions—15 for the year. Because SRS Distribution also had a good year, increasing its annual revenue by 15.8% to $3.18 billion, it was able to keep GMS from claiming the 7th spot. Sales at SRS were helped by a string of greenfield openings and several acquisitions, including Travis Roofing Supply with 21 branches, Roofers Supply with six units, and Roofing Products & Building Supply with four locations.
Filling in the remaining top 10 spots are 84 Lumber, BMC, US LBM, Foundation Building Materials (FBM), and Carter Jones Lumber. The total revenue generated by the top 10 dealers was $48.3 billion, which accounts for a staggering 76.7% of all revenue generated by the entire PS100 list. It also marks the third consecutive year that the top 10 accounted for 70% of the overall revenue for the entire group and the first time they broke 75%, which clearly indicates that the concentration of wealth continues to rise to the top.
There were some notable revenue increases below the top 10, as well. Griffin Lumber and Hardware (No. 95), in Cordele, Ga., garnered the largest percentage increase when it catapulted its 2019 revenue 84% to $39.3 million. The company acquired Blake Builders Supply, in February 2019, which included a roof and floor truss manufacturing plant—a new area of business for Griffin. (See Griffin’s profile)
Simonson Lumber, based in St. Cloud, Minn., bolstered 2019 revenue 36% to $75 million, due to the acquisition of Mathew Hall Lumber and its truss manufacturing plant, also a new revenue source for the company. The acquisition placed the ProSales 100 newcomer at the 69th spot this year. (See Simonson’s profile.)
Collectively, acquisitions remained a popular growth strategy for dealers last year. At the ProSales 100 Conference (February 26–28, 2020), in Arlington, Texas, Michael Collins, a partner at Building Industry Advisors, stated 83 companies were acquired in 2019, up from 74 companies in 2018. Additionally, last year the industry “had a real surge in the number of greenfield openings,” he said, adding that there were 103 greenfield openings in which “roofing was a dominant category.”
