LUMBERYARDS

Beacon sees strong start, soft finish in Q1

BY HBSDEALER Staff

Herndon, Va.-based Beacon Roofing Supply celebrated solid top-line growth during a quarter that started fast and finished with some tough weather conditions.

The company posted first-quarter sales of $552.1 million, up 7.5% from $513.7 million in the same quarter last year. Net income slipped to $15.0 million, down from $18.2 million in the year-ago quarter.

“We started the quarter exceptionally strong, but ended the month of December on a soft note as a result of some very challenging weather conditions in our Northern regions,” said president and CEO Paul Isabella.

The company reported a strong rebound in commercial roofing, but also a “challenging pricing environment” that continued to drive down gross margins in the quarter. 

Beacon also said it expects to exceed its expansion plans and roll out as many as 25 branches in the current fiscal year.

“We believe market pricing will improve in 2014 as demand increases as we exit the winter months, and we intend to continue to leverage our operating expenses as we grow our revenue base,” Isabella said.

The distributor of roofing materials and complementary building products currently operates 240 branches in 39 states in the United States and six provinces in Canada.

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Snavely rolls out plans for Perennial Wood transition

BY HBSDEALER Staff

Pittsburgh-based Snavely Forest Products said it’s not going to let the “modified” lumber movement lose its momentum.

In response to Eastman Chemical’s recent announcement that it would cease the manufacturing of Perennial Wood products — the trade name for acetylated wood — Snavely Forest Products announced today that it will continue to market the high-performance decking product.  

Snavely Forest Products has been actively marketing Perennial Wood, acetylated wood products, with launches in North and South Carolina in 2012 and Maryland, Virginia, Pennsylvania and Delaware in 2013. 

“I have never seen a product launch as successful as Perennial Wood,” said Clark Spitzer, VP marketing for Snavely. “The market is ready for this new technology, and we believe that acetylated wood is the next big thing in our product line.”

Spitzer said Snavely will continue to supply the market with Perennial Wood through the first quarter of 2014. There is sufficient acetylated wood in the channel to supply the market well beyond that time frame. The company added that it is confident that it will execute its plan to transition from Perennial Wood to a new supply without any significant disruption to the dealer network.

“We have no intention of abandoning this new technology and have opened discussions with a world leader in the development and commercialization of acetylated wood products,” Spitzer added. 

As previously reported, Eastman said its Perennial Wood was well received in the market, but strategic and financial decisions factored into the decision to discontinue it.

“The product was performing well, and we had growing adoption in the marketplace,” said Tim Dell, VP innovation, marketing and sales at Eastman. “The decision to exit the business was not made because of product performance or market acceptance. When it came down to really understanding the costs associated with production, the economics were challenging and it was going to take too long to see meaningful earnings for our shareholders.” 

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At Eastman, full speed ahead for LBM

BY HBSDEALER Staff

Las Vegas — While Eastman discontinued its decking entrant called Perennial Wood, the company says it’s in full-steam-ahead mode in the building and construction material industry. 

A visit to the company’s booth here at the International Builders’ Show in Las Vegas showcased some of the products leading the parade. Eastman brands LLumar window film, Heat Mirror insulating glass, EnerLogic film and Finished Elegance molding and trim were highlighted at the booth. The last product is powered by Eastman Cerfis (pronounced "surface") technology designed to bring durability, precision and quality to coated products. 

According to Tim Dell, VP innovation, marketing and strategic sales, said the company’s sales are about 15% of the chemical company’s overall sales, or about $1.5 billion of business. 

Energy efficiency is one of the home trends driving innovation at Eastman, which says it is embracing "cleaner, greener and easier-to-use building products." The company promoted the use of its Heat Mirror product as part of the retrofit of the 6,514 windows in the Empire State Building in New York City. 

“We are dedicated to the building and construction industry, especially in the development of innovative material solutions that solve the market’s most challenging problems,” said Dell. “Our businesses at the Builders’ Show provide just a snapshot into the exceptional performance, quality and durability for which Eastman products are known.” 

Regarding the discontinuation of Eastman’s Perennial Wood, introduced to the building market two years ago here in Las Vegas, Dell described the decision to pull the product as difficult. The company will continue to honor warranties and service existing customers.

"The choice to exit the business was a financial decision," he said, adding that  Eastman appreciated the efforts of distributors Boston Cedar and Snavely Forest Products. However, he added: "The decking category is a very crowded category."

Meanwhile, Snavely Forest Products announced that it will contine to market Perennial Wood as it works with other developers to build on the momentum of acetylated wood, the technical and generic term for Eastman’s Perennial Wood product. Acetylated wood gets its name from the process that removes acid during a "modification" process. 

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