At the new BMC: "Playing offense"
In his first interview with Home Channel News since becoming CEO of BMC Select -- now called "BMC" -- Peter Alexander shared his enthusiasm for the prospects of the Boise, Idaho-based pro dealer, which emerged from reorganization in January. The firm is cash-flow positive, sitting on an untapped credit line of $40 million, and poised to make a full operational profit in 2011, he said.
With 50 locations in nine states, BMC is a chiseled-down version of its former self -- as BMHC, it had 182 units in 2006. But Alexander described today's game as about quality, not about size. And the new BMC is prepared to "play offense," he said.
Here's more from the interview:
• On the new BMC: "Bottom line is this: We are through the woods. We are going to be profitable next year, financially strong, operationally healthy, and we are playing offense. And it’s a whole lot of fun right now -- in a market that’s down -- to play offense. And it’s good to see our folks actually have a spring in their step."
• On the big four offerings: "The four major things we provide are LBM, truss, millwork and construction services. These are the four things we offer in every single market. We’re good at what we do by helping our customers become more successful. That’s our mission in life. Customer First with Services the Customers Need"
• On the new logo: "We’re dropping the 'Select' piece off the name, so it’s just BMC. It’s how we answer the phone. It’s how customers know us. It reflects a return to the core of what we did best over the years."
• On expansion: "We’re not looking at dots on the map. We’re looking at expanding markets where we think we can get better penetration to the customer and service them better than we’re doing today. … One thing I’m adamant about is I don’t care about being the largest footprint in the U.S., but we very much care about being the best-run company in the business and known for a high service level."
• On BMC's financial position: "We don't disclose our full financials because we're private. But I will say we have a $40 million line of credit that we have not tapped into, we have good cash levels, and our liquidity is very, very good. We are currently EBITDA positive and will have positive earnings next year.. And I think we may be the only one of the major players in the industry who can unquestionably make that claim."
• On the housing recovery: "We're looking out into 2011 and 2012 and for planning purposes and probably realistic purposes, we're expecting the markets to be pretty much flat with 2010. One -- that's just good conservative budgeting discipline. Two -- there are just so many imponderables that give us cause for concern regarding some of the more optimistic forecasts we see."
• On centralization: "You'll start to see a theme of centralized coordination much more of what we do and driving toward a single-company environment. We're still leaving some local leeway where it makes sense for the market. But centralized functions like finance, credit, purchasing, accounting, IT, human resources, risk management -- these will be completely centralized. But we'll still give the local guys the flexibility to do what they have to do on a local level."
• On "best practice councils": "We looked at millwork, truss, sales, administration, IT, credit, construction services and asked: 'Who in the individual branches performs the best across the company?' These people became our best practice participants and chairs. And we're driving everything so that there are common processes and consistent metrics across the board. We're eliminating the 'federation of BMC locations' approach and getting to a single-company approach. And we think that’s our key to success as we grow."