This excerpt taken from the BLG 10-Q filed May 5, 2005.
We compete in the homebuilding industry through two business segments: BMC West and BMC Construction. With locations in the western and southern states, BMC West distributes building products and manufactures building components for professional builders and contractors. BMC Construction provides construction services to high-volume production homebuilders through operations in key growth markets in western, southern and east coast states. These two business segments are subsidiaries of our holding company Building Materials Holding Corporation.
Our growth strategy focuses on improving market share by increasing construction services primarily through acquisitions as well as expanding our service offerings at existing operations. We believe production homebuilders are increasingly outsourcing the construction process to full-service providers offering both building products and construction services.
Construction activity remained strong for the quarter in most of our markets as building permit activity outpaced the prior year and exceeded national figures according to the U.S. Census Bureau. Additionally, annual single-family starts are projected at 1.5 million which is comparable with historically high levels.
From a broader perspective, the economy remains stable with interest rates expected to continue increasing gradually. Commodity wood product price levels in the first quarter of 2005 were also consistent with the prior year. Overall, industry and economic trends continue to support our positive outlook for the remainder of 2005.
We evaluate our results of operations including and excluding acquisitions. We believe a presentation of sales and income from operations excluding recent acquisitions enhances an understanding of the acquisitions as well as comparable operations for the respective periods. In the discussion for the three months ended March 31, 2005 and 2004, a reconciliation of sales and operating income before recent acquisitions has been provided.