LBM associations merge, again
The Georgia-based Construction Suppliers Association will merge with the Oklahoma Lumbermen’s Association in a move described as a strategy to maintain “critical mass” for the association to deliver more programs to member dealers.
CSA President Jim Moody announced the merger to members in a letter this morning. The combined group will use the CSA name and Tyrone, Georgia, headquarters. It will gain a field office in Oklahoma, and OLA’s executive director will join the CSA staff as Oklahoma regional director.
It’s the second major merger for CSA in three years. In 2014, CSA and the Mid South Building Material Dealers Association merged their organizations into the current CSA.
In his letter to members, Moody explained the reasoning for the plan to merger:
“First, we all recognize that the number of independent lumber dealers is shrinking,” he wrote. “That trend is unlikely to change, and it may get worse. Market forces are demanding consolidation, and the deck is always stacked against family businesses – which make up the majority of our membership – past the third generation. Adding Oklahoma dealers into our membership ensures that we have critical mass to serve members well into the future.
“Second, we believe that the growth will give us revenue to create new and innovative programs that will benefit members in all five states. We’ll see increased revenue from membership, participation in our programs, and greater support from associate members who will appreciate the larger marketplace CSA offers with five states. We believe this because we’ve seen it happen before. The addition of a staff position to help with workforce development and our partnership with Chris Rader to offer insight and programs related to IT are both possible because of the growth we’ve seen from our 2014 merger with MBMDA.”
Key programs and services provided by OLA, including a full government affairs program, will continue. Oklahoma dealers will also gain the ability to participate in CSA programs, such as roundtables, safety and DOT consulting, HR consulting, and other educational opportunities.
“We believe this merger opens new opportunities for Oklahoma dealers,” said Sean Stevens, president of OLA. “We honor the 70-year history of OLA by continuing all of the great services Oklahoma dealers have come to appreciate, while giving them access to some great new programs that can really make a difference in their profitability.”
The boards of both the CSA and the OLA agreed to the deal Aug. 15.
Moody thanked the Merger Task Force for their effort: From the CSA: David Huntington, Huntington Lumber, Hazlehurst, Mississippi; Turner Townsend, Townsend Building Materials, Enterprise, Alabama; Ida Ross Hicks, Swift Supply, Daphne, Alabama; and Will Lummus, Lummus Supply, Atlanta, Georgia. And from the OLA: Sean Stevens, M&M Lumber, Tulsa; Whitney McKellar-Stevens, M&M Lumber, Tulsa; Dan Etzkorn, Hughes Lumber, Muskogee; Henry Bockus, Gordon White Lumber, Oklahoma City; Jonathan Kennedy, T.H. Rogers Lumber, Edmond; Reid Colley, Colley & Company, Pauls Valley; and Bill VanSant, Oklahoma Home Center, Guthrie.
BlueLinx swings to profit in Q2
BlueLinx’s intitiative to deleverage the company, announced about a year ago, delivered the kind of the results the company had hoped for in the second quarter. The Atlanta-based building products distributor delivered the best second quarter since 2008, in terms of net income.
Net income swung to a positive $3.2 million, compared to a loss of $3.1 million in the same quarter last year.
Net sales declined to $474.0 million for the second quarter of fiscal 2017, compared to $509.0 million from the prior fiscal second quarter. But gross profit increased to $60.5 million during the fiscal second quarter, up $3.2 million from the prior fiscal second quarter.
Profits increased even as the company experienced pressure on commodity lumber prices during the period, the Atlanta-based company said.
[See the company press release here.]
“We continue to make progress in our local market and sales excellence emphasis, which coupled with our ongoing deleveraging efforts, enabled us to improve our financial performance while significantly reducing our debt from prior year levels,” said Mitch Lewis, president and CEO. “As we remain focused on our customers and markets, our team is energized and motivated to continue improving our operating results and garnering market share,”
In March of 2017, BlueLinx completed the sale of a non-operating facility in Allentown, Pennsylvania, as well as two sales-and-leaseback deals in Fort Worth, Texas and Miami, Florida.
Throwback Thursday: A Diamond in the rough
An article in the Sept. 7, 1987 issue of National Home Center News, the forerunner of HBSDealer, described the comeback attempt of Diamond Lumber, a Carrollton, Texas-based lumberyard chain that had filed for Chapter 11 bankruptcy protection a few months earlier.
Hopes were running high, as the company was seeking to improve vendor relations while luring back its core contractor customer.
Said President Jerald Grubstein: “We’re turning things around.”
A key player in the turnaround effort was Jim Schaffer, a former senior VP of merchandising at Moores, a division of Grossmans. He was described in the 1987 article as “an easy-going man with a ready grin.” Today, Schaffer is the principal of Schaffer Associates, an executive search firm specializing in the hardware and building supply industry.
In an e-mail to HBSDealer, Schaffer described Diamond's challenge, some of its successes, and its ultimate dissolution. He writes:
“When I joined Diamond Lumber, they were in Chapter 11 bankruptcy after prior management tried to convert traditional contractor yards built along railroad rights-of-way and in industrial settings to retail outlets competing for DIY dollars. And of course, in 1987 there were a few new retail operations just gaining traction in the DIY market – big boxes being built in prime locations.
“Well, we gave it a shot. We worked to turn Diamond back to the builder and in some cases we were successful. In others, they told us that we had abandoned them once, and they weren’t going to take the risk again. In any event, we built the business back to a profit, but unfortunately we had to sell off assets to pay our creditors — which we did. And that’s why many of the Diamond yards now fly other banners.”
One group that continues to survive and thrive, he said, is Diamond Pacific Lumber in Northern California, owned and operated by Pacific Coast Building Products.
Schaffer adds: “I had the chance to visit there two years ago and, just like the picture from 1987, it was truly a walk down memory lane.”
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Last week, Throwback Thursday featured an article about the 100th anniversary of Long-Lewis Hardware. Subsequently, this article appeared in Alabama.com, regarding the conversion of the distributor’s old headquarters into an office complex.