Ace Hardware sales down in first quarter
Ace Hardware released its first-quarter results, reporting net income of $10.8 million, down 23 percent from the $14.1 million reported last year.
Total revenues for the Oak Brook, Ill.-based co-op were down 7.2 percent to $872.1 million, while total continuing merchandise sales declined 6.4 percent and retail service revenues declined 13.1 percent.
“Our first-quarter revenues were challenged by a very difficult environment overall at retail and a delay in the transition to spring weather in many parts of the country,” said Ace president and CEO Ray Griffith. “We are hopeful that the current economic stimulus efforts will boost consumer confidence and drive improved selling conditions at retail.”
Merchandise sales from Ace’s international business continued to be strong and contributed $7.8 million in incremental sales, up 22.4 percent compared with 2007. This number was driven by increased sales to existing stores in the Middle East, sales to new stores in the Caribbean and sales growth from foreign-to-foreign wholesale operations located in Shanghai, China, the company said.
Ace added 27 new stores and cancelled 41 stores in the first quarter, which brought the company’s total store count to 4,616, compared to 4,630 at the end of fiscal year 2007.
Ace also saw a $13.3 million decrease in operating expenses, due to a variety of factors, including a reduction in incentive compensation and profit sharing expenses; as well as a decrease in national advertising expenses, savings from the exit if company-owned stores and savings associated with the discontinuation of Ace’s Vision 21 achievement award program.
Still, the company did take a $5.6 million hit due to various debt restructuring activities associated with an accounting error announced in 2007. The $154 million shortfall was identified when an internal review of the company’s financial documents found that its inventory total was less than its general ledger balance.
“In light of the current economic conditions, we are aggressively taking action to focus on expense controls given the difficult sales trends that we are experiencing,” said Griffith. “We are prudently reviewing our cost structure and making the necessary changes that will help us maintain strong profitability without sacrificing our ability to drive continued long-term growth.”
Weyerhaeuser to sell Australian mills
Following a $148 million first-quarter loss, Federal Way, Wash.- based Weyerhaeuser has announced plans to sell its Australian sawmills to Auckland-based Carter Holt Harvey.
The deal will add five additional mills to Carter Holt, which currently runs plants and mills throughout the country.
Assets to be sold include the selling and distribution operations of Pine Solutions Australia, including an export chip business operated out of Portland, Victoria; as well as sawmills owned under the Weyerhaeuser Australia name. Additionally, the sale includes Green Triangle Forest Products and its associated sawmills, export chip business and Pine Mouldings operation.
Weyerhaeuser is also in discussions on a potential simultaneous sale of its 50 percent interest of the Green Triangle Forest Products timberlands business to a timber investment fund, according to the company. Those timberlands include approximately 50,000 acres of plantation pine forest in Australia.
“The Australian businesses will continue to focus on meeting customer needs during the sale process and will work with the potential buyer to ensure a smooth transition,” said Craig Neeser, Weyerhaeuser senior vp-International Group. “It is also important to note that the employees and contractors working for the Weyerhaeuser Australia Group have made significant contributions to its success and will be an asset to any potential buyer.”
Terms of the Carter Holt deal were not disclosed. The deal is still subject to regulatory approval.
84 Lumber gains FSC certification for 26 yards
Pro dealer 84 Lumber has received Forest Stewardship Council (FSC) certification for 26 of its lumberyards, the company announced.
The locations are: Bridgeville, Mars, Grove City, Clarion and Eighty Four, Pa.; Moundsville, W.Va.; North Eaton (Columbia Station), Painesville, Macedonia and Massillon, Ohio; Rochester, Middletown, Ithaca, Elma, Watertown and Riverhead, N.Y.; Wyoming (Grand Rapids), Mich.; Karns (Knoxville), Tenn.; Mount Airy, Md.; Ft. Myers, Fla.; Gurnee, Ill.; Las Vegas; Henderson, Colo.; Chandler, Ariz.; and Beaumont and Hesperia, Calif.
The chain of custody designation enables these stores to sell FSC-certified lumber and building materials, which can earn points in Leadership in Energy and Environmental Design (LEED) projects, NAHB’s Model Green Home Building Guidelines, and other green certification programs.
“FSC-certified products are a value-added service for our increasingly environmentally conscience customers,” said Kathleen Mannas, green products manager at 84 Lumber. “The FSC supports healthy forests and communities, and 84 Lumber is a strong proponent of this initiative.”