National Home Centers' sales drop to $96.6 million - Brief Article

Home Channel News, April 16, 2001 by Jason Gonzalez

SPRINGDALE, ARK. -- Eight unit pro dealer National Home Centers reported net income of $226,000 on sales of $96.6 million for the fiscal year ended Jan. 31, 2001.

While both figures were down considerably from the previous year -- when the dealer recorded net income of $1.1 million on sales of $110 million -- National did manage to post its second consecutive year of profits after losing money each of the four previous years.

In a prepared statement announcing the results, chairman and CEO Dwain Newman attributed the company's results to several external factors, including low commodity prices, a rise in fuel costs, higher interest rates and an overall slowdown in building and economic activity over the second half of 2000.

"Sales prices and costs for our two largest sales categories -- lumber and plywood -- have been down as much as 40 percent during the last half of the year, which in turn produced lower revenue even though we were selling the same or higher quantities of items," Newman stated. Comp-store sales dropped 12 percent for the year as well.

"In addition, we didn't sell as many of the larger multifamily construction projects during fiscal 2000 as we did the year before," Newman added. The decrease in sales to multiunit builders contributed to a small, somewhat surprising shift in National's revenue mix.

In 2000, 79 percent of the dealer's sales came from professional customers, down from 83 percent the year before despite a very public effort to distance itself from national big-box competitors by focusing on pro sales.

National's cash flow from operations took a small hit in 2000, falling to $3.0 million from $3.8 million in fiscal-year 1999.

STILL IN THE BLACK
National Home Centers' sales and income results for the past five years
Fiscal year    Net sales     Net income (loss)
2000         $96.6 million       $226,000
1999         $110.0 million    $1.1 million
1998         $104.7 million   ($2.9 million)
1997         $150.7 million   ($13.0 million)
1996         $177.0 million   ($3.1 million)