Builders FirstSource posts $19 million loss
Builders FirstSource reported a net loss of $18.9 million for its third quarter, which ended Sept. 30, 2008, an improvement over the previous quarter’s loss of $45.9 million. The net loss for the third quarter of 2007 was $12 million.
Sales for the third fiscal quarter were $288.3 million, a 30.3 percent drop from sales of $413.9 million in the same quarter last year.
The company said it closed two facilities during the third quarter, although it did not specify where. Last week, Builders FirstSource announced it had exited the New Jersey market by shuttering five facilities: a distribution center, a manufacturing facility and three showrooms. Altogether, these closures will add $5 million to $7 million in liquidity in 2009, according to the company.
“We are more than two years into the downturn, and our cash remains strong at $131.2 million,” said CEO Floyd Sherman in a prepared statement. “Accordingly, we believe we are well positioned to withstand the challenging conditions facing our industry.”
Ranked No. 9 on the Home Channel News Top 350 Pro Dealer List, Builders FirstSource operates 61 lumberyards in 11 states.
Stock cuts 86 locations
Stock Building Supply will close 86 facilities and reduce head count by some 3,000 associates, the Raleigh, N.C.-based division of Wolseley announced today.
Stock will exit 16 markets in six states, its parent company said. The company did not give specific locations.
The restructuring is a result of the declining housing market and followed Wolseley’s “fundamental review” of the business that was announced in September. Citing “unprecedented conditions in the global financial markets,” the U.K.-based corporation indicated that it was unable to find a buyer for Stock. Wolseley said it also considered closing down the entire U.S. building materials division.
The 86 branches represent 25 percent of Stock’s revenue and 28 percent of its head count, according to Wolseley. The closures will leave Stock with 209 locations in 27 states.
In a statement released this morning, Stock president Joe Appelmann said: “These are very painful decisions that affect loyal associates and their families. Without a doubt, we are facing unprecedented times in our industry. There is over capacity in an industry that was geared up to supply 2.3 million new housing starts two years ago; today the number is less than 1 million. The realities of the current market have changed the capacity of our industry and necessitated these actions.”
The specific facility closings will be announced later, along with the associated cost savings, according to the company.
Earlier this month, Wolseley reported annual revenues for Stock were $3.47 billion, down 24.5 percent from $4.59 billion in 2007. This reflects a 21 percent decline in same-store sales. Stock’s $246 million loss for fiscal 2008 compares to a profit of $86 million in fiscal 2007. This year’s loss includes $13 million in restructuring and severance costs. As of July 31, 2008, Stock had 285 branches, compared to 308 locations in 2007.
In an interview with Appelmann that appeared in the Feb. 11 issue of Home Channel News, the president maintained an optimistic view — “This is the ninth housing market downturn since World War II,” he told HCN. “There will be a tenth.”
Appelmann said the new size and footprint of the company is based on markets that will “bring us out of the downturn more quickly than others.”
“This is not just about cutting losses. If that were so, you wouldn’t see our commitment to markets such as Florida where our current losses are hurting us. Florida, for example, has great potential for rebounding, and we will be there to take advantage of the upswing.”
Chip Hornsby, Wolseley’s CEO, echoed these comments in an analyst conference call following today’s announcement. Stock will keep branches open in states like Florida and California regardless of the plunge in housing starts, he said, adding: “When the market does return, we will be well positioned [in these markets] to benefit as soon as possible.”
Lowe’s partners with Coinstar
Coinstar, the maker and operator of spare-change counting machines, has announced a deal with Lowe’s. Customers using Coinstar machines at 50,000 supermarkets and other locations can trade their spare change for a Lowe’s “eCertificate,” usable online and at Lowe’s stores.
According to Coinstar, the value of the average change jar can add up to a range of purchases at Lowe’s:
• 12 oz. jar — Kobalt 20-Piece Screwdriver Set ($19.98)
• 16 oz. jar — Valspar 1-Gal. Signature Colors Interior Paint ($29.98)
• 32 oz. jar — Harbor Breeze Bella Vista Ceiling Fan ($49)
• 1 gal. jar — BBQ Grillware Charcoal Grill ($199)