The company sells lumber material framing and dimensional lumber (20% of 2007 revenue), manufacturing building materials and sheet goods (20%), roofing materials (20%), bulk commodities such as concrete blocks and bricks (20%), plumbing and electrical supplies (15%), and hardware (5%).
With a customer base of hundreds of active customers, 95% of which are repeat customers, the Company generally serves residential contractors (60% of 2007 revenue), but also serves DIY customers (20%), commercial contractors (10%), and plumbing and electrical contractors (10%).
The Company ability to offer three-hour work-site delivery, superior customer service, and prices comparable to national competitors, make it a competitive force in the building materials and home improvement market.
Rising gross profit trend: From 2006 to 2007, in the face of a weakening residential construction market, the Company was able to grow gross profit from $765,000 to $971,000, representing an increase in the gross profit margin from 21.7% to 25.3%.
Strong net working capital: The Company demonstrated excellent liquidity with unadjusted net working capital of approximately $1,130,000, $909,000, and $903,000 for 2005, 2006, and 2007, respectively.
Integrated technology: The Company’s retail operations are entirely integrated into a computerized system powered by Activant Solutions, the nation’s largest and most frequently used lumber and building supply dealer software. This system includes stock replenishment and inventory management, paperless accounting of receivables, payables, and point-of-sale (POS) scanning technology.