American Metals Supply grows and adapts

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American Metals Supply grows and adapts

BY DAVID BLANCHETTE

A Springfield-based company that has eight locations in six states began more than a half-century ago over a dinner table discussion.
“The business was started in 1962, and I remember sitting at the kitchen table with my dad and mom saying, ‘If this doesn’t work, we want to be able to keep the house.’ It was a big, big deal,” said Steve Hassebrock, the former CEO and current chief corporate strategy officer at American Metals Supply Co., Inc.
“At that time, my dad, mom, brother and myself were involved in the business. It was a true family business,” he said.
American Metals Supply is a leading wholesale distributor of sheet and coil steel, prefabricated ducts and fittings, and a complete line of heating, ventilation and air conditioning (HVAC) products. It began 56 years ago when Steve’s father, Al Hassebrock, left his sales job at a building materials distribution company in Springfield to begin his own sheet metal sales company.
Steve has been with the family-owned and operated company for 47 of those years and has seen American Metals Supply grow steadily over the decades.
“We started out on North Dirksen Parkway. We leased some space in a building, we grew a little more, leased more space, and that went on for a number of years,” Hassebrock said. “We were a single location until 1990, when we opened a second location in St. Louis.”
Following that first expansion, American Metals Supply has added another location every two to four years. They now have operations in Springfield, Illinois, their home base; St. Louis, Hazelwood and Springfield, Missouri; Indianapolis, Indiana; Lenexa, Kansas; Oklahoma City, Oklahoma; and the newest location that opened this year in Dallas, Texas. American Metals Supply trucks deliver products directly to customers within a 200-mile radius.
“One of the reasons we have had the geographic growth, instead of product growth, is we feel we can manage and do a decent job with a narrow, core group of products,” Hassebrock said. “We have fewer than 3,000 Stock Keeping Units (SKUs) and probably most of our competitors would have 40,000 to 50,000.”
“The growth has done nothing but strengthen the company. We are a stronger, more competitive company today than we would have been without the growth,” Hassebrock said. “My dad died in 1980; he was only 60 years old, and I wish he could see what the kitchen table talk has borne.”
Meanwhile, Hassebrock has transitioned out of the company leadership role and his daughter, Chrissy Nardini, became president in 2006.
“We plan to continue staying who we are, very focused and narrow, but to grow geographically to continue to help the company’s growth,” Nardini said. “We are advancing the American dream one life, one customer, one building at a time. That ties into my family history; my grandfather started this company with $7,000 and what it has grown to today is the American dream for our family.”
Nardini said one way American Metals Supply keeps the American dream from becoming a nightmare is by being adaptable in the often volatile construction market.
“We’ve become slightly more commercially focused, the commercial contractor versus the residential, and that started back in 2008-2009 when housing starts dropped significantly and we had to kind of pivot,” Nardini said. “We’re probably 60 percent to 40 percent commercial to residential, serving mechanical contractors for sheet metal HVAC needs.”
The Trump administration’s steel tariffs are another factor that plays a big role in American Metal Supply’s business plan.
“We had a foreshadowing that these tariffs were coming, so we started buying heavily in advance of the tariff and tried to advise our customers to do the same,” Nardini said. “We’ve had to buy at higher and higher prices and sell in higher and higher numbers to our customers. Our biggest risk now is if the tariffs get cut back and it starts to have a different impact on steel here domestically, overnight we could suddenly have our inventory way over-valued.”
American Metals Supply is also strategic when they expand. A company veteran, usually from the Springfield home office or the St. Louis operation, will join at least one person with industry experience and business relationships in the target location. This tactic combines corporate knowledge with a customer base in the new location so American Metals Supply can hit the ground running.
“Whether it’s new construction on ground that’s never been built on before or whether it’s rebuilding after a tornado, we’re usually a part of it,” Nardini said. “We had a whole hospital destroyed by a tornado outside of Springfield, Missouri, that we contributed to when they did the rebuild.”
American Metals Supply will continue to focus on growth and, for the short term, Nardini said, that means in Texas. She feels that state has more potential with construction, population movements and the Texas economy, which she said is much better than the Illinois economy.
“But we definitely have not forgotten where we came from and our core customers, whether it’s in Springfield or St. Louis,” Nardini said. “So staying close to them and remembering who brought us to the table is going to be important in the years to come, too. The Midwest roots make you feel a little more grounded; it’s the right mix of good values, a sense of urgency and hard work that a traditional Midwesterner has.”
All eight locations are also steeped in the company’s core values: Commitment to improving employees’ lives; best-in-class performance for all; being a partner to customers and vendors; and being disciplined and numbers-driven.
“When we defined our core values, we decided they had to be more than just something we post on the wall,” Nardini said. “We have to be willing to look for these values in the people we hire, and we have to be willing to fire the people who violate the core values. Otherwise, they aren’t true core values.”
The company’s narrow focus, sales success and core values have led to an enviable retention rate among its 105 employees – 35 percent of American Metals Supply’s workers have been with the company for more than 10 years, and 15 percent have been there for more than 20 years. There’s always some natural turnover in a business, but the company prides itself in taking care of its employees.
“We have a way-above-the-norm 401(K) plan, because we are trying to help our employees retire securely and have the American dream for their families,” said Nardini, who noted that several long-term warehouse and truck driving employees have been able to leave with a seven-figure retirement. “Turnover is expensive, and if we have good people, we try to keep them.”
American Metals Supply is looked upon as an industry leader and Nardini and Hassebrock have held leadership roles in Heating, Air Conditioning, Refrigeration Distributors International, or HARDI. That organization’s CEO, Talbot Gee, appreciates what father and daughter have brought to HARDI membership.
“Chrissy and her father, Steve, are one of just two family members to have both served as presidents of the predominant trade association for our industry across its more than 70 years of existence,” Gee said. “I have had the pleasure of benefiting from the wise counsel of Chrissy and Steve and witnessing the tremendous growth and development of American Metals Supply under their leadership.”
“Their shared commitment to constant improvement and doing business the right way has set a powerful standard for our industry well beyond just the markets they serve,” Gee said.
Former CEO Hassebrock has seen many industry changes during his nearly 50 years in the business.
“The volatility in the business continues to increase. The cycles get shorter, the magnitude from top to bottom gets greater,” Hassebrock said. “Steel is our biggest single commodity, and its price can move in three months today more than it moved in a decade just 20 years ago. When you’re on the wrong side of it, that it can be a real challenge.
“We are very susceptible to interest rates and the construction cycle because of our narrow focus. When construction goes to nothing, we feel it,” Hassebrock said. “But our sales per employee are high, our gross margin per employee is high, and we feel that is a result of the fact that we know what we are doing in the small arena in which we are really competing.”
Even though he isn’t at the helm any more, Hassebrock still looks forward to coming to work each day at the American Metals Supply main facility, located near the Wabash Avenue and interstate 72 interchange on Springfield’s southwest side.
“I get a sense of pride, it somewhat defines me,” Hassebrock said. “I enjoy being here when nobody is here, looking at stuff on the computer. I enjoy looking at our numbers. We always try to run the business by the numbers.”

By |October 30th, 2018|Categories: Articles, Featured Article|0 Comments

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