Commercial sales grow at Builders FirstSource

Builders FirstSource, the Dallas-based network of lumberyards and component plants, has made some headway expanding its market share in the commercial and multi-family sector, executives told analysts at the company’s first-quarter earnings conference on April 24. Sales to builders of military housing, college dorms, hi-rise residential and low-rise office buildings now account for “slightly over” 10% of the pro dealer’s revenues, according to CEO Floyd Sherman.

“We’ve developed the infrastructure [and] the expertise, and we will look to expand over the coming quarters,” Sherman said.

Despite these gains, Builders FirstSource posted a $30.5 million loss for its first quarter of 2009, which ended on March 31. Sales dropped 37% compared to the same quarter last year. The company closed two facilities during the quarter, a lumberyard in Maryland and a regional administration office in South Carolina.

As for future closings, CFO Charles Horn said: “We want to keep our footprint as broad as possible. There are a few that we’re looking at, that if we cannot get turned around via head count reduction or sales expansion or gross margin expansions, then we will look to make a decision sometime during the second quarter.”

Neither executive was equivocal on the issue of mergers and acquisitions: they want to preserve their liquidity. Stock Building Supply, which shares a number of markets with Builder FirstSource and has been put up for sale, is only a temptation in terms of buying its inventory at reduced prices, Sherman said.