Credit quality for American Builders&Contractors Supply Co. Inc. (ABC) incorporates its solid position in the wholesale distribution of roofing products, its relatively stable product demand, and cash flow protection measures satisfactory for the rating. These positives are offset by highly competitive and fragmented markets, a narrow product line, low (albeit improved) distribution operating margins, and aggressive debt leverage. ABC is the largest wholesale distributor of roofing products and one of the largest distributors of vinyl siding in the U.S., primarily serving small and medium-size contractors supplying residential (55%-60% of total 2002 sales) and commercial markets (19%). Business strengths include broad geographic coverage through more than 255 company-owned distribution centers that are strongly customer service-focused, significant purchasing leverage--American Builders
