BMC sales growth hits double digits
Recent acquisitions and labor-saving solutions combined to propel BMC Stock Holdings to a double-digit sales gain in the second quarter ended June 30.
The Atlanta-based dealer reported sales of $886.4 million in the quarter, up 11.1% from the same quarter last year. Net income declined slightly from $18.0 million to $17.6 million, as merger and integration costs increased by about $3 million.
CEO Peter Alexander pointed to the continuation of solid top-line growth. He also singled out the success of the Ready-Frame whole-house solution, which delivered $45 million in revenue in the quarter. “This whole-house solution continues to gain significant traction as we provide builders a way to effectively navigate a tough labor environment, save money and shorten cash conversion cycle times,” he said.
Recent acquisitions added $19.2 million to the topline, he said. In April, BMC acquired Texas Plywood & Lumber Co. in Dallas and Code Plus Components in the Washington, D.C. market.
“We continue to pursue additional opportunities to further drive profitable growth,” Alexander said.
Meanwhile, the LBM dealer described price volatility that is expected to extend into the third quarter. Executive VP and CFO Jim Major said the company anticipates gross margin percentage to improve
“Our team remains intently focused on driving growth in our value-added product offerings and higher-margin customer categories while, at the same time, executing initiatives to further rationalize our cost structure and improve our operating results,” he said.
The BMC merger with Stock merger continues to play out in the company’s books. BMC realized an additional $2.8 million of merger-related synergies in the quarter. The revised estimate of total annualized merger-related cost savings is set at $48 million to $52 million by the end of 2017.
“During the second quarter, we realized an additional $2.8 million of merger-related cost synergies, primarily within cost of sales, and have refined our estimate of total annualized merger-related cost savings to $48 million to $52 million by the end of 2017.”
84 Lumber builds in North Carolina
Greensboro, North Carolina – home of the Greensboro grasshoppers, the Carolina Dynamo and the Greensboro Swarm (teams that play, respectively, baseball, soccer and basketball) – is now home to the state’s newest 84 Lumber location.
The Pennsylvania-based lumberyard company calls Greensboro an “ideal location.” The store, to be the company’s 12th in North Carolina, is located near three major interstates. With more than 8,000 square feet, Greensboro will build on an existing footprint which includes Raleigh, North Charlotte, and Fayetteville.
“With the opening of new stores in both Durham and Greensboro in 2017, we’re elevating 84 Lumber’s visibility in the North Carolina market,” said 84 Lumber’s chief operating officer Frank Cicero. “This is a great opportunity for us to connect with new customers and positively impact the marketplace.”
The store will also include an 84 Lumber Kitchen and Bath Design Studio complete with a full spectrum of design services for renovators and DIYers.
A three-day grand opening celebration at the new Greensboro store is slates for Aug. 10-12. The company's most recent previous new-opening announcement was for a store in Ruskin, Florida.
US LBM Holding’s IPO prep work
An early version of the prospectus filed by Buffalo Grove, Illinois-based US LBM Holdings paints the picture of a company that intends to continue to shake up the lumber and building supply industry. But it also intends to respect its traditions
In one of the more colorful highlights of the US LBM S-1 filing to the Securities and Exchange Commission (a filing dated May 9, 2017), US LBM founder and CEO described the balance between innovation and tradition.
“Interestingly,” he wrote in letter to investors, “if you read the 1916 Edward Hines Lumber handbook on lumber delivery and replace ‘horse and buggy’ with ‘tractor trailer,’ you will quickly realize that not much has changed in this industry over the past 100 years. Our goal is to drive change and accelerate the speed at which our company and industry move forward, while always being mindful of the local nature of our business.’
Edward Hines, a Chicago-area lumber company, is one of the 30 different semi-autonomous brands of US LBM holdings.
Founded in 2009 with a footprint of 16 yards, US LBM is one of the most acquisition-oriented company in the LBM industry. In January, it acquired Ridout Lumber, a 12-unit dealer based in Searcy, Arkansas, bringing its presence to 29 states and 240 locations.
In the filing, the company pointed to a “robust acquisition pipeline that our management is continually cultivating.”
Other highlights from the filing:
• In 2016, the company generated $2.7 billion in net sales, and $187.0 million of adjusted EBITDA. while posting a net loss of $47.7 million.
• The company’s various business units have been operating an average of 70 years.
• From 2014 to 2016, the company’s mix of specialty products has grown from 69% to about 75% of total sales.
Also from his porspectus letter, Gibson wrote: "While going public is a transformative milestone in the history of our Company, it will not change our fundamental approach to the business."
See the US LBM S.E.C. filing here.