SOURCE: Hanley Wood

May 07, 2008 10:38 ET

PROSALES Magazine's 2008 Top 100 List Reveals How Downturn Has Affected Lumberyards

WASHINGTON, DC--(Marketwire - May 7, 2008) - The worst home-building slump in 20 years has caused 84% of the companies on the 2008 PROSALES 100 to suffer an average 16% drop in sales revenue year over year.

The annual report, produced by Hanley Wood's PROSALES magazine each May, was released May 5, 2008. Sales for the PROSALES 100 companies totaled $34.1 billion in 2007 vs. $39.5 billion in 2006. Adding in the 16 dealers with flat sales, the average decline for all 100 companies was 13.6%.

"Comparing the 2008 PROSALES 100 with previous years reveals just how sharp the downturn has been," says PROSALES editor Craig Webb. For instance, the previous list reporting 2004 sales showed that all 100 companies had increased sales is from 2003, and 95 of them scored double-digit gains. This year's report shows only six companies with double-digit gains, while some dealers saw sales fall nearly 50%.

The PROSALES 100 -- compiled by the PROSALES staff and reported by senior editor Andy Carlo -- is the premier report on construction supply companies that garner more than half their revenues from professional builders. Large operations that cater primarily to retail customers, such as The Home Depot, Lowe's and Menards, are excluded, thus making it possible to examine more accurately the pro-oriented side of the lumber and building material industry. Collectively, the 2008 PROSALES 100 companies run 3,675 sales and production outlets across the country and employ just over 101,000 workers.

For the second straight year, Denver-based ProBuild tops the list, despite experiencing a decrease in sales of 16.7% to $5 billion. Ninety percent of ProBuild's sales are to construction professionals. Stock Building Supply, Raleigh, N.C., was second with $4.7 billion in overall sales (94% to pros) down 13.2%, while 84 Lumber Co., Eighty Four, Pa., remained in third place at $3.1 billion (97% to pros), a 20.9% decline. The top 10 dealers account for two-thirds of the total sales, number of facilities, and number of employees.

"These may be particularly hard times for lumber and building material dealers, but they remain, on the whole, optimistic," Webb said. "More than 70% plan to expand within their regions in the next five years, and more than half expect their installed sales and component manufacturing operations to grow as well by 2012."

Half the PROSALES 100 members currently install windows, but 13% more plan to do so. More than 10% of the list's members plan to begin doing installations involving such building materials as locksets and hardware, interior doors, millwork and molding, shelving, wall panels and stairs.

"Dealers also plan to increase the number of electronic services they offer," added Mark Taussig, PROSALES' publisher. "For instance, more than 50% of the companies on the list plan to begin offering online purchase orders, order tracking, and online payment, while more than 40% will get into such services as online inventory-checking, invoicing, and access to online customer accounts."

PROSALES magazine provides residential construction companies with information, insights and advice on improving sales and service. Data for the 2008 PROSALES 100 was collected by a mailing to approximately 230 companies with a baseline financial standing of approximately $40 million in gross sales. For more information on the magazine or PROSALES 100, visit www.prosalesmagazine.com.

About Hanley Wood

Hanley Wood, LLC, is the premier media and information company serving housing and construction. Through four operating divisions, the company produces award-winning magazines and Web sites, marquee trade shows and events, rich data and custom marketing solutions. The company also is North America's leading publisher of home plans. Hanley Wood Business Media (Washington, D.C.), publishes 36 award-winning residential and commercial construction titles, including BUILDER, REMODELING, ARCHITECT, CUSTOM HOME, CONCRETE CONSTRUCTION and RESIDENTIAL ARCHITECT. Hanley Wood Business Media also offers the construction industry's foremost collection of Web sites, including BUILDER ONLINE, REMODELING ONLINE, and ebuild, the comprehensive online guide to building products, as well as the largest collection of house plans online through eplans.com and Dream Home Source. Founded in 1976, Hanley Wood is a $250 million company owned by affiliates of JPMorgan Partners, LLC. CCMP Capital Advisors manages the Hanley Wood investment for JPMorgan Partners.