Builders FirstSource posts $46 million loss
Builders FirstSource reported a net loss of $45.9 million for the second quarter, which ended on June 30, 2008, swinging from net income of $8.4 million for the second quarter of 2007. The Dallas-based pro dealer posted $307.3 million in sales for its second quarter, a 34 percent decline from $465.1 million during the same period last year.
For the first six months of 2008, Builders FirstSource reported sales of $577.7 million, versus $876.2 million last year. The company lost $61.7 million during the first two quarters of the year. Last year, Builders FirstSource posted a profit of $8.6 million for the same period.
Commenting on the financial results, CEO Floyd Sherman said that housing starts in his company’s markets — primarily the eastern and southeastern United States — fell 43.1 percent in the second quarter of 2008 compared to the previous year. Builders FirstSource was able to offset the declines, he said, by gaining an estimated 8.2 percent of market share.
The company’s liquidity is “strong at over $210 million,” according to CFO Charles Horn.
In a prepared statement, the company said it “expects the difficult market conditions to negatively affect operating results throughout the remainder of 2008 and 2009.”
Report: Lowe’s pulls out of Northern California site
Lowe’s has opted to pull out of a plan to build a 138,000-square-foot store in Rocklin, Calif., according to a report in the Sacramento Bee.
“Increased costs” associated with architectural demands of the city’s planning commission were cited as a reason for the move, according to the report.
The developer of the property, Paul Petrovich, told the newspaper the requirements “busted the budget” associated with building the store. The retailer had earlier this month sent him a letter canceling plans on the site — a Lowe’s spokesperson told the newspaper that the retailer indeed had to “re-evaluate our plans” due to cost factors.
In related news, Lowe’s announced it would open a new store in north Nashville, Tenn., in the fourth quarter of 2008. The 117,000-square-foot location is set to include a 31,700-square-foot garden center.
LP posts $81 million loss
Louisiana-Pacific, one of the industry’s largest producers of oriented strand board (OSB) and other wood products, reported a second-quarter net loss of $81 million, compared to a net loss of $23 million in the second quarter of 2007.
Sales were $387 million for the second quarter, down 16 percent from $461.2 million in the year-ago period.
For the first six months, LP has recorded a loss of $127 million, wider than the $60.6 million loss during the first half of 2007.
The company took “significant curtailments in the quarter to match supply with orders,” said CEO Rick Frost in a prepared statement. “These shutdowns, coupled with significantly higher material costs, put downward pressure on our margins.”
Other non-operating costs listed for this past quarter included a loss of $5.3 million associated with a facility explosion and a loss of $1.2 million connected to a contractor who defaulted on a construction project.
Frost also noted a $48 million charge related to the settlement in an OSB antitrust lawsuit. Nashville-based LP is the fifth company to come to a settlement in the antitrust case, filed in 2006, which alleges that OSB manufacturers began conspiring together in 2002 to artificially reduce the supply and inflate prices of OSB.
Four other defendants have reached settlements so far: Potlatch, Huber Engineered Woods, Ainsworth and Georgia-Pacific.
All the companies have denied the accusations as part of their settlements, including LP, which wrote in a statement that it came to the settlements “in order to limit the risks and costs associated with at least two lengthy jury trials.”
“LP has vigorously contested the plaintiffs’ allegations and vehemently denies that it violated any U.S. antitrust law or any other law,” the company said in a statement.