BMHC sells off equipment, properties to stem losses
Building Materials Holding Corp. (BMHC), the industry’s fifth largest pro dealer, has reported a $45.2 million loss for its third quarter, which ended on Sept. 30, 2008. Sales were $364 million, a 39 percent drop from sales of $594 million a year ago.
So far this fiscal year, the company has lost $111 million on sales of $1.1 billion. In fiscal 2007, BMHC posted a profit of $18.6 million on sales of $1.8 billion for the first nine months.
In a conference call with analysts, Robert Mellor, BMHC’s chairman and CEO, listed a number of steps the company has taken to preserve liquidity. In addition to negotiating a permanent amendment to its credit facility, BMHC has sold off $4.2 million in excess vehicles and equipment as well as properties it owns.
Costs are also being cut through closings and consolidations. A Northern California location in Dixon that provided concrete services is in the process of winding down, Mellor said. In Southern California, in the city of Colton, BMHC is negotiating to sell its concrete services. If the sale falls through, the operation will close, according to Mellor. A reload center in Southern California, in Mira Loma, will close in the next 30 days and be put up for sale.
In Colorado, a door shop and millwork facility in Fort Collins and a wall panel plant in Greeley will be moved to other BMHC facilities. A Puget Sound, Wash., distribution center is being relocated.
The sale of these and other surplus properties is expected to generate $45 million in the next 24 months, Mellor said.
Some of these closings are part of BMHC’s restructuring of its two former divisions, SelectBuild and BMC West, into one organization. In a question and answer session with analysts, company president and chief operating officer Stan Wilson said the company will be looking at SelectBuild’s wide array of construction services — for example, plumbing, electrical and other related trades — with an eye toward profitability.
“They need to be contributing to income, or we will be exiting those,” Wilson said. SelectBuild is also becoming a more “sales oriented” operation rather than an “order taking operation,” Wilson said, adding, “It’s a major difference than the way we used to operate.”
CEO Mellor, commenting on the company’s delisting from the New York Stock Exchange last week, said: “We were disappointed that the New York Stock Exchange did not follow the lead of NASDAQ in suspending the trading requirements during these economically turbulent times.” BMHC’s move to over-the-counter trading would have no effect on the company’s credit agreement, he noted.
True Value exec honored
True Value announced that Susan Katz, the co-op’s director of corporate events, is the recipient of the Professional Convention Management Association’s 2008 Distinguished Meeting Professional of the Year Award.
This award is given each year to individuals in the meeting and hospitality industry who excel professionally, personally and within the community, True Value said.
Katz, who has more than 30 years of industry experience, joined True Value in 2004, leading a team of professionals responsible for coordinating more than 75 corporate events and meetings each year in Chicago and nationwide. These include three annual conventions where True Value store owners purchase products and learn about the latest trends in retailing. These shows encompass an average of 500,000 gross square feet of exhibit space and 50 training sessions and demonstrations.
Prior to joining True Value, Katz worked for several non-profit organizations, including the National Safety Council and the American Dental Association. PCMA will formally recognize Katz at its 53rd annual meeting, to be held in New Orleans in January 2009.
Lancaster to anchor new paint area at National Hardware Show
Lancaster, a leading paint sundries distributor, has teamed with the National Hardware Show to create a new area supporting dealers, retailers and participating exhibitors at the 2009 event, to be held May 5 to 7 in Las Vegas, the Spartanburg, S.C.-based company announced.
The new National Hardware Show Paint & Accessories Area will be anchored by Lancaster, which will offer show specials as well as the ability to purchase smaller quantities on-the-spot from exhibitors that have distribution at Lancaster.
“We are honored Lancaster has chosen the National Hardware Show to create this special area,” said Ed Several, group vp-National Hardware Show. “In challenging economic times, our goal is to create the most valuable three days for the entire home improvement industry — especially the paint and accessories category — and this program offers a great solution.”
In related news, Lancaster will host its first “Open to Buy” day at the 2009 National Hardware Show, where Lancaster associates will review manufacturers’ products for consideration in the company’s inventory mix.
In addition, show organizers will work with the Paint and Decorating Retailer’s Association (PDRA) to offer educational seminars to help retailers discover best practices and innovative ideas to grow their business. PDRA is an Official Industry Association of the National Hardware Show.
“We are excited to partner with the National Hardware Show and their participating vendors to create a unique buying opportunity for retailers,” said Geff Lynch,vp-marketing for Lancaster.