BMHC obtains loan waiver
Building Materials Holding Corp. (BMHC), which defaulted on one of its loans at the end of July, has secured a temporary waiver of certain covenants from its lender. The waiver, announced late on Friday, allows the San Francisco pro dealer to borrow up to $60 million through Sept. 30 while it seeks to permanently change the terms of its credit facility to better reflect market conditions.
As of July 28, 2008, the company had $29 million outstanding on a revolving loan and $340 million on a term loan.
BMHC announced on July 29 that, based on preliminary second-quarter results, the company was out of compliance with financial covenants relating to minimum net worth and minimum earnings before interest, tax, depreciation and amortization. As a result, the lenders under the credit facility had the option to stop further borrowings and require BMHC to repay borrowed amounts immediately.
The company said it is in still the process of finalizing its financial statements for the second quarter of 2008. These results are scheduled to be released on Aug. 14.
PRO Group makes key promotions
Denver-based PRO Group has promoted Brendan Sullivan to director of merchandising, a new position, according to the company.
Sullivan is a 21-year industry veteran who has served in various merchandising and business development positions for Servistar/Coast To Coast and True Value prior to joining PRO Group in 2005.
“Brendan Sullivan’s experience and work style makes him ideally suited to a merchandising director role,” said Steve Synnott, president and CEO of PRO Group, in a statement. “Brendan has worked as a buyer and merchandise manager, and since he joined our company three years ago he has taken a leading role in providing progressive ideas and programs on the merchandising side.”
In addition, PRO Group managing director for the PRO Hardware and GardenMaster divisions, Shari Kalbach, has been named managing director for the company’s Farm Mart division, which supplies independent farm supply retailers.
Kalbach joined PRO Group in 1997 and is responsible for all of the Group’s distributor relationships.
“Shari Kalbach has a proven track record as a highly effective executive working with PRO Group distributor members,” Synnott said. “Adding Farm Mart to Shari Kalbach’s scope of work is a natural progression of her role. She excels working closely with our distributor members.”
Design Within Reach narrows losses
Design Within Reach, the San Francisco-based specialty home decor retailer with around 70 locations nationwide, saw net losses of $159 million, narrower than the $575 million in losses recorded in the same period last year.
Net sales for the second quarter decreased 3.7 percent to $47.3 million, compared with $49.1 million recorded in the year-ago period.
Still, the retailer saw an improvement in gross margin, a measurement of earnings that takes production and service costs into consideration — gross margin improved to 46.4 percent in the second quarter, compared with 44.3 percent in the same period last year.
In-store sales were $32.6 million, up 2.2 percent from last year. Sales from phone and the dwr.com Web site decreased 17.5 percent to $10.4 million.
DWR also said it predicted that “in light of the challenging economic environment, the company believes revenue will be flat year over year.”