LANGLEY, BC - Hardwoods Distribution Inc.'s purchase of Frank Paxton Lumber in September is being hailed as "one of the highlights of the year," by Lance Blanco, president and CEO of HDI.
HDI saw revenue increase 37.7% in the fourth quarter of 2011 compared to that of 2010. Paxton Lumber, a re-manufacturer and distributor of hardwood lumber, millwork and architectural sheet goods contributed $13.6 million in revenues during the 15-week period HDI operated it in 2011. Paxton has locations in Chicago, Cincinnati, Denver, Kansas City and San Antonio. Paxton contributed "a new positive EBITDA contribution of $0.2 million even after accounting for $0.2 million of transaction cotst we incurred to acquire the business," Blanco said.
The strong fourth-quarter sales surge, due largely to the purchase of Paxton Lumber, helped HDI achieve a 16.4% revenue increase for the full year ended Dec. 31. The company's full year profit was $6.1 million.
"We achieved profitable growth in 2011 as we pursued our business strategy, investing in high-performing new operations, products and sales personnel, and strengthening results from our existing distribution centers," said Lance Blanco , President and CEO of Hardwoods.
Reflecting on 2011 market conditions, Blanco said, "In the U.S. market, home building, remodeling and commercial construction activity all fell short of forecaster's expectations, resulting in continued closures and production cutbacks among secondary manufacturers, including some of the largest component and cabinet manufacturers in the U,S. In Canada , market demand remained relatively flat, with modest growth in residential housing starts partially offset by weak demand from secondary manufacturers."
In light of a continued weak market for its hardwood lumber and related sheet good products, Blanco said the company launched three broad market initiatives last year, including:
1. Opening up more accounts in the commercial construction sector.
2. Expanding the sales and importation of "high-quality, proprietary products" including "adding new vendors and improved freight routes."
3. "Making our move into three large North American urban centers where we previously had little or no representation. Thanks to the Paxton acquisition we have gained a strong presence in Kansas City, Cincinnati and Chicago , all of which hold significant potential for us, and we expanded our presence in San Antonio and Denver," Blanco said.
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