Cabinet companies in the FDM 300 record sales gains in 2012 and are optimistic about 2013.
What goes down can come back – but it may take a while. The cabinet companies in the FDM 300 have endured the biggest business decline ever, but are moving cautiously ahead in 2013.
Overall sales of the FDM 300 companies, of a group of 30 selected cabinet manufacturers within the FDM 300, and an important industry survey were all on the positive side in 2012.
After five years of declines in annual sales, the overall FDM 300 recorded a sales gain in 2012. We estimated sales for this group of 300 companies in the United States and Canada to be $37.632 in 2012, an increase of 4 percent over sales for this group in 2011, which was $36.167 billion.
The FDM 300 is a group of the 300 largest cabinet, furniture, millwork, store fixture, office/contract and component producers in North America. Additional information can be found at www.cabinetmakerfdm.com by clicking on the FDM 300 tab or searching for a specific company.
KCMA survey: 7.3 percent gain
According to the Kitchen Cabinet Manufacturers Association’s monthly Trend of Business Survey, participating cabinet manufacturers reported sales of $4.7 billion in 2012, up 7.3 percent compared to 2011. Stock sales increased 11.7 percent; semi-custom sales were up 4.5 percent; and custom sales ended the year slightly (0.1 percent) higher for 2012.
December 2012 monthly sales were up 15.2 percent compared to December 2011. Stock sales rose 21.5 percent; semi-custom sales were up 10.3 percent; custom sales were up. 9.0 percent compared to December 2011.
Survey participants include stock, semi-custom and custom companies whose combined sales represent more than two-thirds of the fragmented U.S. cabinet market. All major U.S. cabinet manufacturing companies belong to KCMA, but 63 percent of KCMA cabinet manufacturer members report sales under $10 million annually.
In our own group of 30 selected cabinet companies within the FDM 300, sales reached $12.34 billion, an increase of about 3 percent over 2011 sales of $11.97 billion for this same group.
Mostly gains in top 10
1. MasterBrand Cabinets, the Fortune Brands Home and Security’s kitchen and bath cabinetry segment, recorded sales gains through the first three quarters of 2012. The figure here, $1.315 billion, is based on those three quarters. MasterBrand announced the closing of its Martinsville, Va., in August.
2. Masco Corp.’s figure here is based on the year-to-date sales for the cabinet and related products segment (nine months) and was down 5 percent from the same period in 2011. Our figure of $1.2 billion is based on 3rd quarter cabinet segment sales and company information. The Atkins, Va., plant was to close in 2012.
3. American Woodmark’s figure of $515.8 million is based on the company’s 2012 fiscal year. Sales increased. Hazard (Chavies) and West Virginia plants closed in 2012. Sales increased from $452 million in 2011.
4. RSI Home Products bought Continental Cabinets in Texas, in 2010. Half of RSI was bought by Onex Corp., Canada in 2011. We did not receive information from the company and the $300 million in 2012 is our estimate.
5. The Norcraft Companies figure of $290 million was based on third quarter sales and reflects an increase.
6. The Elkay sales number of $250 million is our estimate. The company provided a full update except sales.
7. WoodCrafters Home Products, LLC reported continued sales growth. Sales reported from the company increased from $209 million to $220 million in 2012.
8. U.S. Home Systems, Inc., was purchased by Home Depot in October. The company makes kitchen cabinets and countertops exclusively for the retailer. U.S. Home Systems is based in Lewisville, Texas, and operates a cabinet plant in Charles City, Va.
9. For Armstrong Cabinet Products our estimate is $145 million. ACProducts, Inc. purchased and now operates the cabinet manufacturing division of Armstrong World Industries. ACProducts. is a wholly-owned subsidiary of American Industrial Partners, a private equity firm. It was incorporated in August 2012 and is headquartered in The Colony, Texas, and has 750 employees.
10. Cardell Cabinetry LLC provided an update, but no sales figure. Our estimate is $125 million.
We had 11 companies leave the FDM 300 list in 2012, but only one cabinet company: Regal Kitchens LLC. Regal reportedly closed its Medley, Fla., cabinet factory last year. An auction was held in October. The company has employed 150 people making stock cabinets, closet systems and countertops. Annual sales were $20 million several years ago.
Top line views
“Our top line in the third quarter benefitted from the increase in new home construction activity in North America, new product introductions, and from selling price increases,” said Masco’s CEO, Tim Wadhams, in a statement. “We are encouraged by the continued strength in new home construction activity, driven by the stabilization and improvement of home prices in many areas of the U.S., increasing affordability and demographic trends. These factors should continue to drive demand for new homes over the next several years.
“Our industry continues to be highly competitive, with significant discounting and sales promotions,” commented Norcraft Companies, L.P. president and CEO, Mark Buller. “However, we are optimistic about these early signs of recovery in the new home construction and home improvement markets and our ability to leverage the growth into improved profitability. As such, we continue to introduce new products and cost reduction initiatives.”
“We had broad strength in our businesses as expected (after the third quarter), with sales growth in each of our segments," said Chris Klein, chief executive officer, Fortune Brands Home & Security, Inc. "We achieved this success as the market for our products continued to improve, with double-digit growth in new housing construction and moderate improvement in spending for home repairs and remodeling."
"Our cabinet sales grew nicely in the quarter, and our continued discipline on promotions coupled with our improving supply chain efficiencies resulted in a sharp year-over-year increase in operating income before charges/gains.”
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