In Chicago, upbeat and defiantly convenient
Rallying the troops during the Ace Fall Convention and Exhibits, chairman Dave Ziegler showed the early morning general session audience a video clip of Ace COO John Venhuizen wielding a Home Channel News magazine.
In the magazine was a quote from a Home Depot executive about leading the industry in convenience and service. Venhuizen responded by channeling defiant former NRA spokesman Charlton Heston: Ace will relinquish the title of most convenient “when they can peel it out of our cold dead hands.”
There was more than heavy rhetoric at the Chicago general session.
CEO Ray Griffith shared numbers showing year-to-date Ace sales are up 4.5%, ahead of the budgeted 4.0%. The company opened 78 new stores so far, with a goal of 179 in North America.
The CEO laid out the rationale behind a refinancing deal that led to a one-time expense in the co-op’s recent quarter, but “will save $15 million a year for four years beginning in 2013.”
Griffith said the co-op’s same-store sales are up 3.8% year to date, and transactions are up 1.5% year to date. “I think it reflects the strength of the home improvement market,” he said.
Beacon lights up acquisition scene, again
Beacon added two new companies to its roster in July: Structural Materials Co. in Southern California and Contractors Roofing & Supply Co. in St. Louis.
The appetite for acquisition remains unsated.
“We are confident that we will add other quality companies in the near future that fit our target acquisition profile,” said CEO Paul Isabella during Beacon’s third-quarter earnings call.
If the past is any indicator, that profile includes such companies as Cassady Pierce, Fowler & Peth and Nova Scotia-based The Roofing Connection, acquired in May 2012, November 2011 and October 2011, respectively.
Beacon’s third-quarter sales of $560.5 million — although up 3.7% — were hurt by lower non-residential roofing activity and less residential roofing activity in the markets affected by last spring’s hail storms, partially offset by the benefit of higher average selling prices.
Following up: Fenton Hord takes stock of LBM industry
Fenton Hord had a huge run at the helm of Stock Building Supply.
In 1987 he oversaw a seven-unit, $98 million pro dealer. When Hord retired in 2007, Stock was a 350-location, $5 billion “North American Super Power.”
Of course, when the housing starts dried up, Stock remained in the headlines with a well-documented run of bankruptcy and reorganization.
Even today Horde is optimistic about the LBM business. And that’s exactly where his latest venture is looking to put its money.
Late last month, Investors Management Corp., of which Hord is a board member, formed Cornerstone Building Alliance, with former Stock COO Steve Short at the helm. The investment company will target distributors, manufacturers and installers in the $10 million to $100 million-plus range.
“We know the business, we like the business, and we’re excited about the prospects Cornerstone brings to the industry,” Hord said.
The investment strategy calls for a majority position, with management teams to retain minority ownership. “This allows our partners to financially participate in the recovery of the market and the success of the business,” Short said.
The newly formed company’s next acquisition will be its first. “Stay tuned,” Short said.