Just over 100 construction supply companies nationwide reported an average operating loss of $228,882 and a pretax loss of $50,365 on sales of nearly $16.5 million in 2010, according to results released today from regional LBM associations' latest Cost of Doing Business survey.
Respondents' average gross margin was 26.16% of sales, or $4.2 million total, while the average operating expense was 27.97% of net sales, or $4.5 million, reported Jim Moody, president of the Construction Suppliers Association (CSA), the LBM industry group for Georgia and Alabama. Moody spearheaded the data-collection effort on behalf of regional LBM groups nationwide.
"The 2010 Operations Comparison survey reflects another year of dismal sales, but it also shows that dealers generally have done a lot of work to ensure the viability of their businesses," Moody told ProSales in an e-mail. "Fixed expenses are down, and so are employee costs. Dealers have improved collections and reduced their debt. We've been in this downward spiral long enough for the survivors to realize that hoping for better days is not a good business strategy. Given that sales are not picking up, dealers must reduce their costs to stay afloat, and the survey indicates they are doing the things that have to be done."
Conditions in 36 states were represented in the results from the more than 100 dealers that filled out the survey. Of those, roughly 60% also took part in last year's survey. Those 2009 results showed the average respondent suffered an operating loss of $1.5 million and a pretax loss of $1.3 million on $26.5 million in net sales.
A copy of the full report costs $500. Survey participants paid $200 and get faster and more substantial results. To buy a copy, contact your regional construction supply association or e-mail Moody at [email protected].