84 Lumber Company Announces Aggressive Three Year Strategic Plan

Building Materials Supplier Aims for $10 Billion in Sales

Apr 04, 2006, 01:00 ET from 84 Lumber Company

    EIGHTY FOUR, Pa., April 4 /PRNewswire/ -- 84 Lumber Company, the nation's
 largest privately held supplier of building materials to professional
 contractors, today unveiled a strategic plan that will catapult the company to
 $10 billion in sales by the end of calendar year 2009.  The company posted
 nearly $4 billion in sales in 2005.
     Among the key initiatives of the three year plan; opening 125 new
 locations, adding 1,000 outside sales representatives, expanding the company's
 Installed Sales Services program, increasing manufacturing through 84
 Components, and increasing sales to large, national production builders.
     "Over the past three years, our sales have increased from $2 billion to
 nearly $4 billion. The fuel for this has been adding outside sales
 representatives and stores in high growth markets which allowed us to quickly
 gain greater sales and market share," said 84 Lumber Company President Maggie
 Hardy Magerko.  "However, as we continue to grow and move to increase sales by
 an average of $2 billion a year for the next three years, we need to ensure
 that we are managing our stores and investment in them to maximize our return
 on assets (ROA)."
     With more than 95 percent of sales coming from professional builders, the
 company can service customers in a much greater geographic area than a
 traditional consumer retailer.  A key component of the strategic plan is to
 redeploy company assets to focus on high growth markets by closing
 underperforming stores.
     "As we analyzed our ROA over 521 stores, we determined that we needed to
 make some tough decisions regarding underperforming stores and to close them
 so that we can better utilize our assets on a national basis," said Hardy
 Magerko.  "The stores we are closing are not performing to consistent levels
 required by our business model and are located in no-growth or rural markets
 that have either matured or never reached their projected potential from a
 housing start perspective.  Today, as we open new stores, our benchmark is a
 minimum of 3,000 housing starts annually.  The stores we are closing are
 located in markets that do not come close to reaching this bottom line housing
 start benchmark."
     As a result of this analysis, 84 Lumber will close 67 stores and redeploy
 those assets into markets where housing starts are high and the company is
 aggressively expanding so that each new and existing store can produce a much
 higher level of sales and ROA.
     In markets with multiple stores, sales staff and customers will be
 transferred from closed stores into other existing stores.
     "As we close and consolidate these stores, we are in the process of
 opening 50 new stores in 2006, and already have 42 new store locations slated
 for 2007," added Hardy Magerko.  "Looking ahead to 2008, we are actively
 reviewing more than 20 new store sites at this time."
     In addition to the new stores opening over the next three years, the
 company will expand its outside sales force by a minimum of 1,000
 professionals and will hire hundreds more to staff the new stores.  In
 addition, expansion of the Installed Sales Services, which includes products
 such as framing, doors and trim, windows and insulation, and the expansion of
 manufacturing through 84 Components will create thousands of additional jobs.
     "Our goal is to continue to grow, and grow responsibly, so that we are
 providing long term and stable career paths for our associates today and
 tomorrow," said Hardy Magerko.  "The implementation of this strategic plan
 will provide such an environment for continued growth for both the company and
 our associates."
     84 Lumber Company
     Celebrating its 50th anniversary, 84 Lumber Company was founded by Joe
 Hardy in 1956 in the town of Eighty Four, Pennsylvania, where the original
 store continues to operate today. 84 Lumber Company has risen to become the
 largest privately-held building materials supplier to professional contractors
 in the country posting 2005 sales of nearly $4 billion with 95 percent of
 sales to the professional market.  84 Lumber Company operates more than 450
 locations; plus 19 84 Components manufacturing facilities from coast to coast.
 With more than 10,000 associates nationwide, 84 Lumber Company provides
 professional, residential and commercial contractors and remodelers with
 quality building materials, supplies, expertise and services such as lending
 and insurance.  Please visit our web site: www.84lumber.com
     84 Components
     Founded in 1985, 84 Components is a subsidiary of the 84 Lumber Company.
 Based at the 84 Lumber corporate offices in Eighty Four, PA, 84 Components has
 offered unparalleled service, quality, technology and value to professional
 builders for over 20 years.  84 Components, which operates 19 plants
 nationwide, is designed to cater to the specific needs of professional
 builders. Each 84 Component plant utilizes the latest technology to design,
 layout, and produce building components such as floor and roof trusses and
 wall panels.
     84 Installed Sales
     At 84 Lumber we pride ourselves on our ability to adapt to our customers
 needs.  An example of this commitment is the continued expansion of our
 Installed Sales Services which relieves professional contractors from the
 everyday problems associated with the coordination of materials and reliable
 skilled labor.  84 Lumber Installed Sales Services handles installation of a
 variety of building materials including; framing, roofing, insulation,
 windows, siding, doors and trim.
                   84 Lumber Company Store Closing Locations
                                 April 4, 2006
      Pennsylvania             West Virginia                 Mississippi
      Ephrata                  Gallipolis Ferry              Pontotoc
      Bethel Park              New Martinsville
      Kane                     Wellsburg                     Michigan
      Hermitage                Logan                         Benton Harbor
      Woodland                                               Houghton Lake
      Northeast                                              Jackson
      Imperial                 Kentucky
      Homer City               Alexandria                    Wyoming
      Johnstown                Campbellsville                Rock Springs
      Moon Township            Morehead                      Gillette
      Washington                                             Arkansas
                               North Carolina                Clarksville
      Ohio                     Clinton
      South Columbus           Oxford                        Virginia
      Lima                                                   Blairs
      Mansfield                South Carolina
      Bucyrus                  Camden
      Hillsboro                Tennessee
      Newbury                  Kingsport
      North Lima               Oak Ridge
      Akron                    Clinton Highway
      North Canton             Union City
      Ashtabula                Shelbyville
      Alliance                 Lawrenceburg
      Brunswick                Decherd
      New York                 Commerce
      Olean                    Illinois
      Oswego                   Springfield
      Oneonta                  Alton
      New Jersey               Woodlawn
      Indiana                  Neosho
      Centerville              Camdenton
                   84 Lumber Company New Store Openings 2006
                           47 Locations as of 4/4/06
      Alabama                  Minnesota                     Tennessee
      Mobile                   Hugo                          Chattanooga
      Northport                Lakeville                     Hendersonville
      Arizona                  Mississippi
      Florence                 Moss Point
      Yuma                                                   Burleson
                               North Carolina                Georgetown
      California                                             Houston West
                               High Point                    Killeen
      Rialto                   Huntersville                  McKinney
      Visalia                                                San Antonio South
                               Nevada                        San Benito
                               Reno                          Utah
      Ft. Lauderdale           Oklahoma                      Spanish Fork
      Fort Pierce                                            West Jordan
      Haines City              Oklahoma City North
      Medley                                                 Virginia
      Jensen Beach             Oregon
      Miami Dade                                             Fredricksburg
      Riviera Beach            Forest Grove                  Winchester
      Idaho                                                  Wisconsin
      Meridian                                               Wrightstown
                               South Carolina
      Crystal Lake
      Minooka                  Lexington
      Ascension Parish

SOURCE 84 Lumber Company