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BMHC may cut 2,000 jobs

BY HBSDEALER Staff

Shedding more light on its plans to consolidate operations, Building Materials Holding Corp. (BMHC) filed a document yesterday with the Securities and Exchange Commission that announced its intention to shut down an undisclosed number of underperforming units. These locations were divided into two groups: those identified for possible consolidation, representing aggregate sales of $435 million and operating income of $11 million in 2007; and units slated for potential shutdown, which brought in $120 million in sales last year but incurred operating losses of $12 million. The two groups employ 1,300 and 700 people, respectively.

No locations were given for the targeted closings and consolidations.

According to the SEC filing, BMHC is still evaluating its operations to resize the company. On Monday, the San Francisco-based pro dealer announced it was integrating its two business units, BMC West and SelectBuild, into one organization with combined back office functions. The company expects to realize $20 million to $25 million in savings from its streamlining efforts.

BMHC has also decided to realign its 13 regions into 7 regions. Missing from the list is the Mid-Atlantic, where SelectBuild entered the market through an acquisition in 2003 and provided framing services to home builders in Delaware, Maryland and Virginia. BMHC could not be reached for comment on its plans for the Mid-Atlantic region.

On a quarterly earnings conference call with analysts yesterday, company chairman and CEO Robert Mellor said the closures and consolidations will begin this week and probably finish within six months. “We’ve taken teams and put them in place [where] we’re winding down our business,” Mellor said. The industry’s 4th largest pro dealer reduced its work force by 20 percent during the last quarter of 2007, when it laid off 2,700 employees at SelectBuild and 300 people at BMC West, according to Mellor.

In addition, BMHC has announced plans to close two of its BMC West locations, in Merced and Bakersfield, Calif. The company will retain its existing sales force and continue to serve those markets from its BMC West units in Fresno and Modesto.

In a prepared statement, the company blamed the declining housing starts in California’s Central Valley as the reason for the consolidation.

The San Francisco-based dealer also announced it was closing its SelectBuild unit in Tucson as part of a company-wide integration of its two business units, BMC West and SelectBuild, into one organization. A number of underperforming units will be closed over the next six months as part of this consolidation, the company said, although the exact number and locations were not revealed.

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Green Building Conference underway in New Orleans

BY HBSDEALER Staff

New Orleans The National Association of Home Builders Green Building Conference is in full swing in New Orleans, with a host of education sessions and green vendor displays, and a special focus on green building in the Big Easy.

Education sessions dealt with the basic ins and outs of green building, from how to explain green to consumers to what big builders are doing to tackle the green movement.

Michael Strong of Houston-based remodeler Brothers Strong; Scott Sevon of Palatine, Ill.-based Sevvonco; and Tom Kelly of Neil Kelly Co. of Portland, Ore., discussed how remodelers can best “sell green” to consumers who might be overwhelmed with information.

Sevon said that showing consumers a real cost-savings, coupled with the use of materials that will stand the test of time, is the best way to get the point of “green” across. Statistics also help, he said, pointing out that “36 percent of our total energy use (nationwide) and 65 percent of electricity consumption comes from residential use.”

Strong noted that it is an advantageous time for remodelers and builders getting into green, because so many manufacturers are pushing their new products.

“There’re a lot more free products than ever before. When it comes to green, vendors and manufacturers are falling all over themselves giving this stuff away,” he said.

The Green Building Show also included tours of a number of green homes built in the New Orleans area. Toni Wendel of Olde World Builders showed off two home projects, currently under construction, that will meet newly adopted “Crescent City Green” criteria, developed by the Home Builders Association of Greater New Orleans. The primary energy-savings features of these homes have to do with, of course, cutting down on air conditioning costs by building a tight envelope and using energy-efficient windows, which were purchased at a special discount through Pella, Wendel said. But the homes also feature FSC-certified wood that is termite-resistant, water-saving plumbing fixtures and a host of other green features.

KC Contractors displayed a home, which was rebuilt after having been inundated by nearly seven feet of water. The home is just one example of how builders have fit energy-efficient homes into neighborhoods with an eye toward ensuring the home fits in with surrounding architecture.

Duplexes being built by Green Coast Enterprises, a third city builder, are set to include bamboo and tile floors, as well as other mold resistant building materials. Will Bradshaw of Green Coast Enterprises told HCN that he plans to move into one of the condominium units with his wife when the project is complete.

“New Orleans is ground zero for all of these issues coming together — sustainable building and affordable building,” he said.

This is the 10th annual Green Building Conference, but attendance numbers — both for vendors and attendees — are up well over last year, said Don Carr, program manager for the NAHB National Housing Quality Certified Home Builder program. The group is also awaiting the publication of a new national green building standard document, set for later this month, he said.

The Green Building Conference continues through today with further education sessions, including New Orleans-specific sessions on the Make it Right housing initiative and other green building projects that are tied into ongoing rebuilding from Hurricane Katrina. For more information, visit the HCN Green In Store blog at www.greeninstore.blogspot.com.

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Recycled mulch firm expands facility

BY HBSDEALER Staff

International Mulch, a firm that makes rubber mulch sold at Ace, True Value and Menards, has outgrown its 57,000-square-foot building and is moving to larger quarters, according to press reports. The St. Louis-based manufacturer, which makes its landscaping products from 100 percent recycled truck tires, has signed an agreement to purchase a 300,000-square-foot former machine shop in Godfrey, Ill., according to an article in The Telegraph.

The deal is expected to close by the end of July, with production beginning in August.

International Mulch also makes recycled rubber tree rings, edge border and playground mats.

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