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At BMC, it’s first and 10

BY HBSDEALER Staff

Here’s the thumbnail sketch of football great Archie Manning’s presentation at the first-ever BMC National Sales meeting in Las Vegas last month: Competition can be fierce. Fate can be cruel. But for those who persevere, there are rewards to reap. 


Does it sound like a message for a lumberyard chain fighting through a housing downturn? “It was pitch perfect,” said BMC CEO Peter Alexander. “Plus, Archie stayed on to sign footballs for every participant.”


While Manning, the father of two current NFL quarterbacks, was a highlight of the three-day event, the real victory came from simply bringing Boise, Idaho-based BMC’s far-flung sales team under one roof, Alexander said. BMC has seen more than its fair share of plans, strategies and reorganizations in the last several years — including an emergence from Chapter 11 bankruptcy protection last year. But one thing it had not seen was a national sales meeting.


Until last month.


“Today, we have a clearer organization led by some of the very best, most ethical business leaders in the distribution space,” Alexander said. And while the 75-unit Western pro dealer anticipates flat sales in 2011, the privately held company also expects a profit. Keeping things simple is a key to Alexander’s BMC playbook. 


“We have 350 salesman, with one brand, one IT system and one commission program,” Alexander told HCN.


Anything else?


“It’s just blocking and tackling and execution,” he said.

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For BFS, declining sales, positive attitude

BY By Ken Clark

Builders FirstSource is a rarity among pro dealers: a publicly traded company that operates in a kind of SEC-regulated fish bowl. 


The industry was watching closely again last month, as the Dallas-based company spelled out its sales situation to investors during its fourth-quarter earnings call. The big picture was one of fourth-quarter sales in decline — but a decline not nearly as steep as that of residential construction in the southern markets served by Builders FirstSource.


Sales slipped 4.5% to $147.1 million in the quarter ended Dec. 31, 2010. But CEO Floyd Sherman pointed out that the U.S. Census Bureau’s figures for the South Region — encompassing the entire geographic footprint of the company — saw fourth-quarter single-family starts slip 9.3% from the prior-year quarter. 


The company estimates that sales increased 3.1% due to commodity inflation, but decreased approximately 7.6% due to volume and competitive pricing pressure.


“These sales results, even when adjusted for commodity inflation, would indicate we gained market share during the quarter,” Sherman told investors. “We look to continue this trend, but only where these gains are at acceptable margins.”


Speaking of sales, senior VP and CFO Chad Crow broke down fourth-quarter sales by product category: 


• Windows and doors: $36.8 million, up 1.3%;


• Lumber and sheet goods: $40.8 million, up. 3.0%; 


• Millwork category: $20.1 million, down 1.5%; 


• Prefabricated components: $26 million, down 11.0%; and


• Other building products and services: $26.8 million, down 16%.


The last category, which includes labor revenue on installed services, was negatively impacted by the quarter-over-quarter decline in the number of multi-family units under construction, which was down approximately 26% in the South Region, Crow said.


Meanwhile, Builders FirstSource said it is beginning to target smaller builders more than it has done in the past — particularly in the dealer’s larger markets. The company operates 69 yards in nine states from Texas to Maryland.


The first six months of 2011 may prove “difficult,” despite forecasts of improving housing conditions. The period will have a tough comparison with 2010, which benefited from the federal tax credit for first-time home buyers, he said.


Still, no earnings call would be complete without some good news, and Sherman was armed with observations from the field: “Recently, we have seen a return of certain customers that we had previously lost due to pricing,” the CEO said. 


When an analyst pressed for reasons why, Sherman said service, delivery and inventory all play a role. He added: “I think another reason as they look down the road, they are starting to say, ‘Who are going to be survivors in this business, and what’s their ability to handle us when business really starts to improve?’ That’s a concern I think that a lot of builders are beginning to have. Who is going to be around?”

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Goal: Understanding home improvement

BY HBSDEALER Staff

The Home Improvement Research Institute (HIRI) will enter its comfort zone April 13. That’s when the non-profit research organization hosts its 2011 HIRI Spring Conference at the Doubletree Hotel Crystal City in Arlington, Va.


The one-day event runs from 8:30 a.m. to 3:30 p.m. and will feature seven presentations connected to the theme of “Understanding Today’s Home Improvement Industry.”


Presenters include the Mortgage Bankers Association, IHS Global Insight, The NPD Group, Synovate, TNS and Itracks.


Early registration discounts are available to those who register by March 11. Visit the HIRI website at HIRI.org for more information.

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