RALEIGH, NC -- Stock Building Supply Holdings, Inc., a diversified lumber and building materials distributor and solutions provider that sells primarily to new construction and remodeling contractors, reported net income of $6 million during the third quarter, on sales of $358.5 million.
Commenting on the Company's third quarter 2015 results, Jeff Rea, President and Chief Executive Officer, stated, "Residential construction activity and our sales volumes continued to improve at a gradual but steady pace in most of the markets we serve. Decelerating macro conditions in certain Texas markets and extended residential construction cycle times constrained overall sales volume growth to approximately 5%, as compared to the prior year quarter, while deflation in lumber and lumber sheet goods prices also restrained the year over year increase in net sales. Despite this challenging environment for sales growth, we built upon our consistent trend of profit improvement by increasing gross profit by nearly 6% and adjusted income from continued operations per diluted share by more than 38%, as compared to the prior year. These results once again illustrate the flexibility in our operating model, the focused execution of our operating teams and the value of our differentiated customer service capabilities supported by strategic eBusiness technology investments."
Jim Major, Executive Vice President and Chief Financial Officer, stated, "Consistent with recent quarters, our sales and operating teams leveraged top-line growth and improved the sales mix from our strategic product categories to further expand gross profit. Our gross margin percentage for the quarter improved 110 basis points to 24.9%, as compared to the prior year period. The combination of gross profit improvement and operating expense discipline resulted in adjusted EBITDA growth of nearly 25% and strong pull-through of incremental sales and gross profit dollars. As prevailing market conditions gradually improve, we plan to maintain investments in our business to drive additional sales growth and realize opportunities to further enhance operating results."
"The positive trends in employment expansion, consumer sentiment and builder confidence for the U.S. housing market provides a solid backdrop for the continued execution of our profitable growth strategy," stated Mr. Rea. "Our announced strategic merger with BMC, which significantly expands our operating footprint and adds more than $1.3 billion in annual net sales to the Company's historical financial results, remains on track to close in the fourth quarter of 2015. Furthermore, we are finalizing development and beginning the launch of our 24x7 eCommerce platform, which provides a customer portal into our ERP and eBusiness suite of services. This platform is expected to deliver meaningful improvements in customer and employee productivity. Once fully implemented across the Company, we expect that our integrated suite of eBusiness services will have a significant positive effect on our customer service, growth potential and productivity that will support continued expansion of our operating margins."