BMC--the new name for what more recently was known as BMC Select and, before that, Building Materials Holding Corp. (BMHC)--has become cash-flow positive as of the third quarter and expects to turn an operating profit in 2011, the company's CEO said Thursday.

In an interview with ProSales, Peter Alexander said that report of financial strength was one of the points he stressed during a recent meeting with vendors. The Boise, Idaho-based firm also pushed how BMC has sharpened its focus and now operates as a single company rather than a collection of individual locations.

"We shared with them on a discrete basis our financial status, which impressed everyone," said Alexander, the former president of ORCO Construction and more recently a BMC Select board member who became BMC's CEO on Aug. 1. " ... For the first time, the vendors viewed BMC as a single company. We wanted them leaving with the legitimate impression that we're running as a single company, not a federation of companies acquired over time."

During its time as BMHC, the company operated as two different firms, one devoted to construction supply and the other to turnkey framing. BMHC spent the latter half of 2009 reorganizing while under Chapter 11 bankruptcy-law protection from creditors and emerged on Jan. 4 as BMC Select. With that change, it moved from a stockholder-owned public corporation to a private entity. Now it has decided to drop the "Select" and just call itself BMC.

Alexander said BMC now focuses on four offerings: lumber and building materials; truss and wall manufacturing; custom millwork and trim; and construction services. It serves 11 states and 16 markets, all of them in western states except for a small operation in North Carolina. Alexander said the company plans to expand its operations in three markets soon. "In our view, it's a great time to invest," he said.

According to the latest ProSales 100, it reported revenues of $700 million last year, 95% of it to pros. That put it ninth on the latest list, although recent consolidations further up the ProSales 100 have since moved it into the No. 8 spot.

The meeting with vendors also featured a review of BMC's markets. "We indicated to them that we don't anticipate any significant recovery in 2011 in terms of the market and we're more pessimistic than most about 2012 as well," Alexander said.

He said BMC believes the key to success in the future will be to provide sterling service to customers, such as making certain orders are delivered on time and with complete accuracy. Alexander said the company's creation of best practice councils have helped it identify and spread to all branches the optimal ways to run good lumberyards. The company also has streamlined processes, established common metrics, and invested more in information technology to reduce the possibility of human errors.

"We haven't done any tremendous magic, but we've done blocking and tackling," he said.

Peter Alexander
Peter Alexander

Alexander didn't elaborate on his report of BMC going cash-flow positive this year and operationally positive in 2011. He did say the vendors "left feeling good about our financial strength," in part because they're looking for stable partners.

"They were impressed with the focus and the single-company approach," Alexander added. "Frankly, as a vendor it's hard to figure out how to deal with 50-plus locations. I think the branding is a good jump-start."

While BMHC was regarded as a company that pursued big builders, Alexander said BMC's customer base includes builders of all sizes plus multifamily builders and larger remodelers.

He said he has spent much of his tenure since last August visiting employees in every part of the company, learning from them and helping formulate a strategy. Even the last board meeting took place in the back of a warehouse in Denver, he said.

"The people in our branches have to be crystal clear about what we're about and what our mission is," he said.