Changes affecting Cornerstone Building Products

Part
01
of seven
Part
01

Cornerstone Building Brands Challenges

Cornerstone Building Brands is the by-product of the merging of PlyGem Building Products and NCI Building Systems. Synergies expected and experienced position them as large manufacturers of exterior building products on an expansive geographical scale across the US. Cornerstone offers both residential and commercial solutions. The newly-formed company has been experiencing challenges resulting from the merger and these will be assessed below.

Challenges

Challenge #1

  • Cornerstone has faced reputation challenges lately. Reviews on Indeed reveal how working conditions used to be great but, have been deteriorating with the company rating at 3.1 out 5 overall.
  • There are five categories in which the company is rated by which are Pay and Benefits, Management, Work-life Balance, Culture, Job Security and Advancement. The ratings per category which are all out of five, are 3.2, 2.7, 2.8, 2.9 and 2.8, respectively.
  • After rewinding to reviews from past years, all the way to 2014, it is clear that not much has changed in terms of the situation at Cornerstone and responses from Management. The numerical reviews are sporadic in distribution with written reviews still reflecting the dire state of the company. The issues keep revolving around advancement opportunities and how employees have to work overtime with little to no recognition.
  • To corroborate this information, reference was made to Glassdoor, which is another company review website. The overall rating out of 5 is 2.9, which is even less than that from Indeed. There are not many reviews on the site compared to Indeed's which also signals the deteriorating state of affairs at Cornerstone because with Indeed, it would mean that the average rating is being carried by reviews from 5 years ago and back. The responses by Management to complaints on Glassdoor do not show much being done to counteract the company issues besides what seems like damage control on a face value level. The impact of these reviews are leading to potential employees not choosing to work at Cornerstone.

Challenge #2


Challenge #3

Part
02
of seven
Part
02

Cornerstone Building Brands M&A

Mergers and acquisitions performed by Cornerstone Building Brands in the last five years include the merger of NCI Building Systems and Ply Gem (closed on November 16, 2018) and the acquisition of Environmental Materials (February 20, 2019).

Merger of NCI Building Systems and Ply Gem

  • The merger of NCI Building Systems and Ply Gem closed on November 16, 2018. The deal was first announced on July 17, 2018.
  • Under the terms of the merger agreement, shareholders of Ply Gem will receive around 58.7 million shares of NCI common stock worth about $1.2 billion. Shareholders of NCI will retain a 53% ownership of the merged entity's common equity, and shareholders of Ply Gem will own 47%.
  • The main reason behind the merger is to create a market-leading exterior building products platform in North America that can provide "new construction and repair & remodel solutions for commercial and residential applications." The merger will improve the company's ability to serve customers across a broader product portfolio in multiple end markets, create multiple avenues for growth, and share "strengths in advanced manufacturing, product innovation, and cost-efficiency."
  • On April 11, 2019, the merged entity became Cornerstone Building Brands.

Acquisition of Environmental Materials by NCI/PlyGem

  • Under the terms of the Unit Purchase Agreement, NCI paid approximately $187 million for "100% of the outstanding limited liability company interests of Environmental Stoneworks." The acquisition was financed through borrowings under NCI's asset-based revolving credit facility.

Research Strategy

To identify mergers and acquisitions performed by Cornerstone Building Brands in the last five years, we first examined the company's newsroom. The newsroom has provided articles published by Cornerstone Building Brands (created on April 11, 2019) and NCI (pre-merger) from May 2014 to the present. Based on the articles examined, only two mergers and acquisitions have closed over the last five years, which include the merger of NCI Building Systems and Ply Gem (November 16, 2018) and the acquisition of Environmental Materials (February 20, 2019).

To identify mergers and acquisitions performed by Ply Gem before its merger with NCI, we conducted a press search for articles published from February 2015 to November 2018 and examined Ply Gem's CrunchBase profile. The majority of the articles examined only talked about the company's product offerings. According to its CrunchBase profile, Ply Gem last acquired another company in July 2004 (MW Manufacturers) and was acquired by Clayton, Dubilier & Rice in January 2018. An examination of the CrunchBase profiles of Cornerstone Building Brands and NCI did not provide additional mergers and acquisitions activities conducted in the past five years. Before merging with Ply Gem, NCI last acquired a company in November 2014 (Centria).
Part
03
of seven
Part
03

Cornerstone Building Brands Financial Performance

Annual revenue for Cornerstone Building Brands for 2018, 2017, 2016, 2015, and 2014 were reported to be $2 billion USD, $1.77 billion USD, $1.68 billion USD, $1.56 billion USD, and $1.37 billion USD, respectively. Details of each year's financial performance have been provided below.

Annual Finacial Performance: 2018

  • In 2018 the company generated $2 billion USD in revenue with a gross profit of $462.7 million USD, net income of $63.1 million, and adjusted EBITDA of $201.6 million USD.
  • Consolidated revenue grew in 2018 by 13.0% compared to 2017. "The year-over-year improvement was primarily driven by continued commercial discipline in the pass-through of higher costs in a rising cost environment across each of our segments and underlying volume growth in the Engineered Building Systems and Insulated Metal Panel segments."
  • "Consolidated gross margin in fiscal 2018 decreased by 40 basis points from the prior fiscal year to 23.1%. Lower margins in the current period were driven primarily by higher freight and manufacturing costs, both of which experienced significant inflationary pressures during fiscal 2018. These were largely mitigated during the second half of the fiscal year through commercial discipline."
  • "Net income increased by $8.4 million to $63.1 million for fiscal 2018, compared to $54.7 million in the prior year. Diluted earnings per share was $0.94, while adjusted net income per diluted common share was $1.45. Adjusted EBITDA increased to $201.6 million representing an approximate 20.4% increase over the prior year. Net income was impacted by certain special items including a $21.9 million loss ($15.9 million, after taxes) on extinguishment of debt and a $6.7 million loss ($4.8 million, after taxes) on the sale of the China manufacturing facility associated with a reporting unit within the Insulated Metal Panels segment, offset by a $4.7 million gain ($3.4 million, after taxes) on insurance recovery.

Annual Finacial Performance: 2017

  • In 2017, the company generated an annual revenue of $1.77 billion USD with a gross profit of $416.1 million USD, net income of $54.7 million USD, and adjusted EBITDA of $167.5 million USD.
  • Consolidated revenue grew in 2017 by 5.1% compared to 2017. "The year-over-year improvement was primarily driven by continued commercial discipline in the pass-through of higher costs in a rising steel price environment predominantly in the Engineered Building Systems and Metal Components segments, despite lower tonnage volume."
  • "Consolidated gross margin in fiscal 2017 decreased by 190 basis points from the prior fiscal year to 23.5%. Lower margins in the current period were driven primarily by lower tonnage volumes in our Engineered Building Systems segment, leading to lower manufacturing cost leverage, offset by favorable product mix, particularly in IMP products."
  • "Net income increased by $3.7 million to $54.7 million for fiscal 2017, compared to $51.0 million in the prior year. Diluted earnings per share was $0.77, while adjusted net income per diluted common share was $0.80. Adjusted EBITDA increased to $167.5 million representing an approximate 0.8% increase over the prior year. Net income was impacted by certain special items including a $6 million ($3.7million, after taxes) impairment of goodwill associated with a reporting unit within the Metal Components segment, offset by a $9.7 million ($5.9 million) gain on insurance recovery."

Annual Finacial Performance: 2016

  • In 2016, the company generated an annual revenue of $1.68 billion USD with a net income of $51.0 million USD and adjusted EBITDA of $166.1 million USD.
  • "Consolidated revenues increased by approximately 7.8% from the prior fiscal year. The year-over-year improvement was primarily driven by tonnage volume growth across all operating segments. Revenue growth was lower than the underlying increase in volumes to the pass-through of lower steel cost."
  • "All operating segments achieved underlying gross margin growth through increased tonnage volume, commercial discipline and manufacturing efficiencies. Gross margin in fiscal 2016 increased by 160 basis points from the prior fiscal year to 25.4%. Engineering, selling, general and administrative expenses as a percentage of revenue decreased by 30 basis points to 18.0% compared to the prior fiscal year, as we executed on our strategic initiatives."
  • "Net income increased by $33.2 million to $51.0 million for fiscal 2016 compared to $17.8 million in the prior year. Diluted earnings per share was $0.70, while adjusted net income per diluted common share was $0.71. Adjusted EBITDA increased to $166.1 million, representing an approximately 27.7% increase over the prior year, as we took advantage of the operating leverage created by volume increases and realize benefits from our improvement initiatives."

Annual Finacial Performance: 2015

  • In 2015, the company generated an annual revenue of $1.56 billion USD with a gross profit of $372.3 million USD, net income of $17.8 million USD and adjusted EBITDA of $130.1 million USD.
  • "Gross margin, including the fair value adjustment of acquired inventory and gain on insurance recovery, was 23.8% for fiscal 2015 compared to 21.3% for the same period in the prior year. The increase in gross margin was the result of continued commercial discipline in both the metal components and engineered building systems segments and higher margin product mix as well as the inclusion of CENTRIA."
  • "Consolidated sales increased by 14.1%, or $193.2 million for fiscal 2015, compared to fiscal 2014. These results were driven by the inclusion of CENTRIA, which contributed $179.4 million of external sales since January 16, 2015, when CENTRIA was acquired. This increase also resulted from higher tonnage volumes in our metal components segment, specifically for our single-skin products. In general, this increase was partially offset by the continued decline in steel prices experienced during fiscal 2015, which has unfavorably impacted our consolidated sales."

Annual Finacial Performance: 2014

  • In 2015, the company generated an annual revenue of $1.37 billion USD with a gross profit of $291.8 million USD, net income of $11.2 million USD and adjusted EBITDA of $75.5 million USD.
  • "Consolidated sales increased by 4.7%, or $62.1 million for fiscal 2014, compared to fiscal 2013. This increase resulted from higher tonnage volumes in our metal coil coating and metal components segments for fiscal 2014 compared to the same period in 2013 which was driven primarily by improved demand in the end use sectors of the nonresidential construction industry that we serve compared to the prior year. These increases were partially offset by lower tonnage volumes in our engineered building systems segment during the current period."
  • "Gross margin, including the gain on insurance recovery, was 21.3% for fiscal 2014 compared to 21.1% for the same period in the prior year. The increase in gross margins was the result of higher sales prices due to value oriented pricing and higher tonnage volumes as noted above, partially offset by an unfavorable product mix in the metal components segment."
Part
04
of seven
Part
04

Cornerstone Building Brands Competitive Analysis (1)

Nine competitors of Cornerstone Building Brands are PGT Innovations, General Steel, Metallic Building Company, Star Building Systems, Allied Building Products, Builders FirstSource, Armstrong Steel, Morton Buildings, and American Buildings.

PGT Innovations

  • The website for PGT Innovations can be found here.
  • PGT Innovations' family of brands offers windows, doors, porches, and other architectural products for both residential and commercial purposes.

General Steel

Metallic Building Company

Star Building Systems

  • The website for Star Building Systems can be found here.
  • Star Building Systems offers roof panels, wall panels, insulated panels, and accessories for commercial building construction.

Allied Building Products

  • The website for Allied Building Products can be found here.
  • Allied Building Products provides gutter, roofing supplies, windows, doors, insulation, and more construction supplies for both residential and commercial purposes.

Builders FirstSource

  • The website for Builders FirstSource can be found here.
  • Builders FirstSource manufactures "roof and floor trusses, wall panels, stairs, vinyl windows, custom millwork and trim, and interior and exterior doors" for both residential and commercial purposes.

Armstrong Steel

Morton Buildings

  • The website for Morton Buildings can be found here.
  • Morton Buildings manufactures metal and steel buildings for both residential and commercial purposes.

American Buildings

  • The website for American Buildings can be found here.
  • American Buildings offers metal buildings, framing systems, wall panel systems, insulated metal panels, and skylights for both residential and commercial purposes.
Part
05
of seven
Part
05

Cornerstone Building Brands Competitive Analysis (2)

PGT Innovations makes and sells premium windows and doors across the repair/remodeling and new construction verticals. General Steel is a full-service construction company operating in the steel buildings segment serving a wide range of industries and Fortune 500 clients globally. Metallic Building Company produces custom-designed metal buildings to commercial and industrial clients in the U.S. and Canada. A competitive profile for each company has been provided below.

PGT Innovations

Product Overview:

  • PGT Innovations manufacturers and supplies "impact-resistant residential windows and doors."
  • The windows and doors PGT manufacturers are made of aluminum and vinyl.
  • The company's 2018 annual report states that their window and door product lines are specific to the high-end and luxury markets and are fully customizable.
  • They also manufacture custom windows and doors in mass.

Target Market:

Customer Perceptions:

  • There have been a total of 32 customer complaints lodged against this company with the Better Business Bureau. Of these complaints, 15 were related to issues with the company's guarantees/warranties, while 17 were related to problems with the product and service. No complaints were lodged in relation to advertising, sales, billing, or delivery issues.
  • A consumer forum which contains nearly 100 customer comments about this company is largely made up of PGT customers who are unhappy with the quality and durability of the windows they received from this company.

Supply Chain Issues:

  • PGT recently acquired Western Window Systems. The company notes in their 2018 annual report that any disruption caused by this acquisition can make it "more difficult to maintain relationships with customers or suppliers of Western Window Systems."
  • The company also notes in their 2018 annual report that they are dependent on only a "limited number of suppliers" for some of their key materials, which the company cites as a risk.
  • Another supplier issue noted by the company is that they have agreements with suppliers in which their suppliers can terminate the agreement with little notice. The company says that needing to transition to other suppliers would thus require them to complete additional testing and obtain certifications.

General Steel

Product Overview:

  • General Steel describes themselves as a "full-service construction project company" that is also known as a steel building supplier.
  • The company's primary services include I-beam metal buildings, c-channel steel buildings, and project consultations.
  • Their secondary offerings include pre-construction services, construction services (concrete, erection, etc.), and opportunities for dealerships/distributors.
  • General Steel provides buildings that are custom designed.

Target Market:

  • According to the company's website, they serve the following industries: agriculture, aerospace, automotive, breweries, car washes, garages, casinos, churches, commercial, residential and fitness centers.
  • The company serves the U.S. and international markets.
  • Some notable clients the company references are the White House, NASA, the NCAA, and Fortune 500 companies, such as Boeing, Disney, Dow Chemical, CAT, Walmart, and General Motors.

Customer Perceptions:

  • Based on the ConsumerAffairs website, the company has received a rating of about 4.75 out of 5 stars across 171 consumer reviews.
  • Customers who have left positive reviews have largely commended the company for their pricing, customer service, and product quality.
  • Customers who initially rated the company poorly have mostly all increased their ratings after General Steel worked to resolve their complaints. Their initial complaints revolved around faulty products, products being damaged upon arrival, and allegedly relying on unethical sales practices.

Supply Chain Issues:

  • The prices of steel (the primary material this company works with) can be volatile depending on a number of variables ranging from supply and demand, to trade tariffs, natural disasters, wars/political disruptions, and the overall state of the world economy. The company has reported that steel pricing has been historically difficult to predict.

Metallic Building Company

Product Overview:

  • Metallic Building Company (MBC) is a manufacturer of metal buildings that are custom-engineered.
  • MBC provides the following products related to metal buildings: primary framing, secondary framing, metal building accessories (canopies, facades, partitions, etc), roofing panels, wall panels, insulated metal panels, liner panels, and soffit panels.

Target Market:

  • MBC targets customers located in the U.S. and Canada.
  • They target commercial and industrial verticals.
  • The company serves the following industries: agriculture, automotive, aviation, craft beverage industry, education, government, healthcare, manufacturing and production, office space, recreation, retail, storage, warehouse and distribution, and worship facilities.

Customer Perceptions:

  • There does not appear to be very many consumer reviews of this company available online, as the company does not appear to have a profile with the BBB nor does the company appear to be mentioned in any consumer review forums or blogs.
  • On Facebook, the company has a customer review rating of 3.4 out of 5 stars, which was generated from five customer reviews. On Google Reviews, the company has a rating of 4 out of 5 stars, generated from four customer reviews.
  • On the plus side, customers have stated that they felt the company was very knowledgeable and the ordering process was fast and easy, however, other customers have complained about the overall speed of the company, as well as their customer service, pricing model, and product quality.

Supply Chain Issues:

  • The company acquires a number of their raw materials from third-party suppliers. For some materials, the company only has a single supplier (or a limited number of suppliers). In their 2018 annual report, they state that "the loss of, or substantial decrease in the availability of, products from [their] suppliers, or the loss of a key supplier, could adversely impact [the company's] financial condition and results of operations."
  • The company is also faced with the possibility of supply shortages due to labor disputes and weather conditions which could impact shipments and other facts that could cause interruptions in their supply chains.
  • Further, the company notes in their 2018 annual report that "some of [their] third-party suppliers may not be able to handle commodity cost volatility or changing volumes while still performing up to [the company's] specifications."

Research Strategy

Please note that during this research it was realized that Metallic Building Company is a subsidiary of NCI Building Systems (aka: Cornerstone Building Brands). NCI's annual report was referenced in an effort to understand the supply chain issues related to Metallic Building Company, as MBC does not publish their own individual report. It should be further noted here that information that pertains exclusively to MBC (as opposed to NCI as a whole) was largely omitted from the annual report. As such, any information related to the company's supply chain issues that could logically be assumed to be relevant to MBC's business has been included under the supply chain issues section for this company. Preliminary research for information pertaining directly to MBC's supply chains via professional organizations, trusted media sources, and company interviews did not return any insights on the company's supply chain issues.

For General Steel, it was discovered that this company is privately held and therefore, does not make their annual reports publicly available. As such, information on this company's supply chain and corresponding issues are scarce within the public domain. In attempts to locate this information outside of annual reports, we analyzed customer reviews in attempts to see if there was any obvious link between reported customer complaints and supply chains, however, no such link was apparent. Next, we attempted to locate interviews with company executives to see if there was any mention of supply chains within them, however, no such interviews were located after research into trusted media sources and via video content such as that published on YouTube. Despite this, we were able to conduct thorough research through the company's website which provided some insights regarding how issues in the general global steel supply chain can affect the company's pricing. This information has been provided above.
Part
06
of seven
Part
06

Cornerstone Building Brands Competitive Analysis (3)

Allied Building Products and Builders FirstSource provide building materials for the residential and commercial construction markets, while Star Building Systems' focus is on industrial and commercial building construction. The industry's changing economy, demand, and the service provided by its distributors are the main issues in the companies' supply chains.

Star Building Systems

  • Products: Star Building Systems offers roof panels, wall panels, insulated panels, accessories, and retrofit/nuroof in different materials, and styles including PBR, Double-Lok, BattenLok HS, SuperLok, Ultra-Dek, ShadowRib, AVP, etc.
  • Target Market: The company's target is commercial and industrial building construction.
  • Customer Perception: The company has received mostly positive reviews from its customers, earning 4.5/5 stars in Google reviews thanks to its fast delivery and customer service, and 4.3/5 on Facebook reviews, thanks to its customer service, quality, and price.
    • Examples of the feedback received: " I've made a delivery at this place yesterday... Very polite and very fast workers, stay as you are now" — Didzi Midji , Google Reviews.
    • "Star builds the best quality buildings for the best price!!!" — Emory Stewart, Facebook Reviews.
    • "When you need the best building at the best price Star Buildings is the only way to go!" — Lee McCoy, Facebook Reviews.
  • Supply Chain Issues: Most complaints received by Star Building Systems about its supply chain comes from troubles with their local distributors, such as a lack of accountability, follow up, and poor installation.
    • Feedback examples of these issues: "In late October I emailed and called my Star Rep in West Va. to request a quote for a new 24 x 24 building as well as some repairs needed on my existing buildings.. After no reply from several attempts I called the Corporate Office and low and behold the Rep did call me and put me in contact with Star's recommended contractor from Roanoke Va R. L." — Bill Craft, Facebook Reviews.
    • "Completed my 5th Star building in Aug 2016 and had numerous roof leaks. Star Rep George Aubin personally looked at the roof and said it needed a bit more caulking. Fast forward 2.5 years and the leaks are still there. I call George again and this time he tells me the roof was installed incorrectly and has multiple issues. Same Star Representative same roof. " — Louis Misto, Facebook Reviews.
    • "We bought a building kit from General Steel. Their sales tactics and customer service left much to be desired but it turns out that General Steel is just a marketing company [...] Star Building Systems customer service was wonderful. We did have a couple of problems with the kit but Mike Simons was there to rapidly resolve the issues. Fantastic service! Thanks guys." — Larry Dee Church, Facebook Reviews.

Allied Building Products

  • Products: Allied Building Products provides sidings, gutter, lumber, manufactured stone, garage, insulation, roofing, tiles, soffits, tools, accessories, trim coil, windows, skylights, and doors for residential construction. They also provide asphalt, pitch, cement, coatings, insulation, metal, roll roofing, bitumens, waterproofing, membranes, tiles, drywall, equipment, and solar products for commercial construction.
  • Target Market: The company focuses on residential and commercial construction.
  • Customer Perception: The feedback provided by the clients is mixed, depending on the location. Overall, the company's perception is good and has received mostly positive reviews, earning 4/5 stars on Yelp and 4.8/5 stars on Facebook Reviews, thanks to its prices, product variety, and customer service. However, in locations like Ohio, the company received a 3.9/5 score on Google Reviews due to its personnel, cleanliness in the store, and prices.
    • Examples of feedback: "Good place to check for roofing materials. Good products (Elastek for that local product connection!) and better prices than you'd find at Home Depot or other hardware stores. Friendly staff gets you in and out quickly and efficiently." — Eric G., Yelp Reviews.
    • "Excellent company! Great service! Always helpful and knowledgeable!" — Ashlynn Ledbetter, Facebook Reviews.
    • "Place was extremely dirty, staff was rude and not helpful to say the least. I’m never going here again." — Tommi Snelick, Google Reviews.
    • "Expensive and ignorant. Poorly trained hyster operators. Staff looked like bunch of junkies. Save yourself a trip and don’t ever go there." — Kody Steis, Google Reviews.
  • Supply Chain Issues: The company's CEO, Bob Feury Jr., explained in an interview with Best Supply Chain Practices that the biggest challenge the company's supply chain faces is the country's economy which has forced them to elevate their prices multiple times in the past years to maintain their quality and compete with other companies in the market. After hurricane Katrina in 2005; then in 2009, which was one of the hardest years for the construction industry; and in 2017, after Beacon Roofing Supply acquired the company.
    • Examples of reviews provided about the price changes after the acquisition: "good guys to bad there being purchased by a lesser company" — Dave Austad, Facebook Reviews.
    • "I used to like this place then they fiered everybody that was worth having and started to over charge and now a restock fee are you kiding me you lost my business boo to alied in howell mi boycott till they get rid of the ingrates." — Robert Ryan, Facebook Reviews.

Builders FirstSource

  • Products: Builders The company manufactures adhesives, sealants, cabinets, columns, decking materials, connectors, cultured stone, doors, drywall, engineered wood products, fireplaces, garage doors, hardware, house wrap, insulation, interior trim, mouldings, lumber, treated wood, railings, roofing materials, shingles, shutters, siding, stairs, steel, steel trusses, wall panel, windows, and wood trusses, among others.
  • Target Market: Builders FirstSource focuses on residential, multi-family, and commercial construction and remodeling. Based on the company's report, their clients are large production builders, light commercial contractors, small custom home builders, repair and remodeling contractors, and multi-family builders.
  • Customer Perception: The company's clients have an average perception of the company, showing it in a mix of positive and negative comments. They've received a 3/5 score on Yelp and TrustPilot due to bad customer service and product availability, a 3.3/5 score on Facebook Reviews, and 4.2/5 on Google Reviews for good customer service, prices, and products.
    • Examples of feedback: "You can always count on good quality products at a fair price sold by great people who know something about building. This is my go to place when working on our home. Please go and support these folks...they are worth every penny!" — Ben M., Yelp Reviews.
    • "Always have what we need in stock. Very friendly staff" — James Hartnet, Google Reviews.
    • "Highly recommend, great products, fast delivery highly knowledgeable staff been buying all my materials at bfs for a long time." — Dave and Stacy Winnie, Facebook Reviews.
    • "WOW! For builders first source to remove a post to cover up, how bad your Tallahassee, FL. store is it is pathetic. This store has the worst manager we ever had to deal with." — Capital Home Builders, TrustPilot Reviews.
    • "Unfriendly service and limited selection. " — Kevin H., Yelp Reviews.
    • "Nothing like being ignored and hung up on when you just want to ask a simple question. Won't ever go there again. Not professional at all." — Daniel Pennington, Facebook Reviews.
  • Supply Chain Issues: One of the challenges the company's supply chain faces is getting raw materials from socially responsible sources that don't use mining or smelting, don't use their revenue to finance armed conflict, and don't harm their local populations' economy and society.
    • Additionally, they consider that some risks and challenges their supply chain experiences comes from the US economy in the residential construction market, the cyclical pressures that the building supply industry puts in the market, the seasonality of the industry, the fluctuating demand, competitive prices, and fragmentation of the industry.

Research Strategy

To determine the supply chain issues these companies face, we looked through official statements and interviews with its executives on the company's website, newspapers, industry blogs, and magazines for the challenges in their supply chain, actions they are taking to address these challenges, etc.

If the information was not available through these sources, like in the case of Star Building Systems, we used the feedback provided by the clients to understand which concerns are generated from the company's supply chain practices, to determine the issues they face.
Part
07
of seven
Part
07

Cornerstone Building Brands Competitive Analysis (4)

Armstrong Steel, Mordor Buildings and American Buildings are well-established companies that have their headquarters in the United States. Armstrong Steel has a stronger online presence, with favorable comments from numerous customers. While Armstrong Steel and Mordor Buildings clearly state homeowners as part of the target markets, American Buildings does not mention residential buildings as part of their products. Other targets common to the three companies are business owners, institutions, and government offices.

Armstrong Steel

  • Armstrong Steel is a company located in the state of Colorado. It was founded by Ethan Chumley, who is the current owner and CEO. It now provides services at an international level, and it has over 120 employees. The mission of the company is to provide pre-enginereed steel building systems, with a "service first" culture that has become the motto of the company.
  • Armstrong Steel offers pre-engineered steel building systems for residential, industrial, institutional, and commercial purposes. Furthermore, they offer specialized structures for aviation, equestrian, storage, and agricultural purposes. They have added 23 colors to their options, which are energy efficient.
  • Armstrong Steel has an international market, with a focus in Central America, Canada, and the United States. Their targeted market is formed by government institutions, industrial companies, tech companies, corporate companies, and homeowners.
  • According to the testimonials offered by the company, its overall score among 180 customers who wrote a review is 4.9 out of 5. On third-party websites, this rating is 4.2 out of 120 reviews. Overall, customers find the prices offered by Armstrong Steel fair, and the customer service offers quick responses. Negative comments were made regarding insufficient information being offered before the purchase of the building.
  • China is the largest steel exporter in the world, and this country is one of the main determinants of steel prices. The current Coronavirus crisis could have an impact on the supply chain, affecting the price of steel.

Morton Buildings

  • Morton Buildings was founded in 1903 in the state of Illinois. The company went from focusing mainly on the farming industry to diversifying its products. Since 2017, the company is no longer family-owned, instead, Morton Buildings is now 100% owned by its employees. There are over 800 employees across the 100 construction centers and 8 manufacturing plants located in the United States. Their goal is to provide high-quality buildings with a beautiful aesthetic.
  • The company offers buildings for different purposes, including commercial, community, residential, and equestrian buildings. They also offer different insulation options.
  • Morton Buildings targets homeowners, business owners, storage businesses, farmers, and municipalities.
  • Testimonials provided by the company show great customer satisfaction with positive comments about the materials and the efficiency of the crew. Morton Buildings is not listed on other third-party review websites available to customers, and the most recent complaint found was a case in 2011.
  • Like other companies in the industry, Morton Buildings could be affected by the Coronavirus crisis taking place in 2020. However, the company states that it does its own steel sourcing, which could protect it from the impact of this worldwide crisis.

American Buildings

  • American Buildings was founded in 1947 in Georgia, but its current headquarters are located in Alabama. It has multiple locations across the United States as well as contractors in Canada, the Caribbean, and the Unites States. The company was acquired by Nucor in 2007, and it currently has over 200 employees. Their goal is to provide high-quality and sustainable systems.
  • American Buildings has segmented its products into steel building components, framing systems, roof panel systems, wall panel systems, and insulated metal panels. Furthermore, they offer prismatic skylights as well as additional accessories.
  • The target market of this company is focused on institutions that provide healthcare as well as correctional facilities. Other targets are business owners, municipalities looking to build recreation centers, companies that need office buildings, schools, and individuals or companies needing storage facilities.
  • There are no testimonials provided by the company, and only one review was found on a third-party website. In it, the customer complained about the lack of responsibility of the contractor provided by the company. However, researching employee reviews, it could be seen as a common theme a lack of sufficient work, which could point to a decline in customer preference for this company.
  • Unlike the aforementioned companies, American Buildings receives its steel supplies directly from its parent company, Nucor. This is one of the largest steel producers in the world, which provides American Buildings with greater stability.
  • The CEO of Nucor, John Ferriola stated in 2019 that steel tariffs imposed by president Donald Trump had a positive impact on the company and domestic steel production. This further guarantees the position of American Buildings in the industry.

Research Strategy

After we performed exhaustive searches on third-party websites such as Customer Affairs and Better Business Bureau, scarce results could be found for Morton Buildings and American Buildings. In the case of American Buildings, due to the lack of testimonials, we searched employee reviews that could provide a sense of the situation of the company and lead to an interpretation of what the customer perspective might be.

Sources
Sources

From Part 01
Quotes
  • "Hot and dark always getting vinyl cuts. Cant keep enough manpower, making it difficult to keep up with the line. Will always wake up in pain. Dead end job. If you can breathe your in. People don't last long."
  • "Worked here for 20 years. It used to be an awesome job. I was going to retire from here. Most managers and people are great. The current plant manager is running the people and the plant into the ground. The plant manager does not respect any of the hourly or salary employees that work there."
Quotes
  • "Management is incompetent they leave as they come in. I'm not sure how long this place will stay open"
  • "no opportunities for advancement and management is a complete joke. There is HR on sight but they barely know the laws in California. This company almost operates like a fly by night company. I would only work here if I couldn't get a job in fast food or retail. The pay is decent but all money isn't good money. Avoid Simonton if you can!!!"
  • "Go through a lot of HR managers and Plant managers and nothing seems to change for the better."
  • "This is the first job that I have worked that points you even with a doctor's note. Management are lazy and don't really work, and some have attitudes not willing to work with you. The heat is exhausting and not enough fans. The pay is ok but rarely given raises. The first raise in 4-7 years was just given this yr 2014. Advancement is hard to do because you have to wait for the job to become available which could be years unless someone is fired or quits."
Quotes
  • "Cornerstone Building Brands Response February 25, 2020 – Talent Community Manager Thank you for taking the time to express your concerns. We are sorry to hear that your experience with management was not completely positive. At Cornerstone Building Brands, our management teams continually strive to provide leadership that fosters individual and team growth. We believe that training and ongoing support from management are necessary to help our employees succeed. We appreciate your feedback as we continue to grow."
  • "Cornerstone Building Brands Response February 25, 2020 – Talent Community Manager Thank you for your feedback. Our employees are essential to our success and we believe in providing an environment in which everyone can contribute to our mutual success and grow in their careers. Your insight is appreciated as we continue to grow and improve"
From Part 07