Mid-Atlantic: EWP moves in
LBM dealers are facing challenging markets and making major decisions from one end of the country to the other. But the details and the markets vary tremendously depending on geography and local market conditions. On the following pages, Home Channel News looks at the regional trends affecting how pro dealers are going after business.
Although northeastern builders were among the early adopters of I-joists, home builders in New York, New Jersey and other East Coast cities were not as quick to adopt laminated veneer lumber (LVL) beams and other engineered wood products (EWP) in place of dimensional lumber. But as these builders find themselves working on more multi-family projects—dictated by both the economy and the availability of open land—many are finding EWP to be a good choice.
Long hallways, tall walls and elevator shafts are just a few examples of places where LVL offer a straight, precise, lightweight beam that can be easily installed. But flooring systems, which allow for computer-aided drafting that cuts down on overall materials, seems to be the best fit.
“Typically [our customers] have already put their toe in the water by using Trus Joist,” said Jeff Rettig of Weyerhaeuser. “But once we show them a 3D picture and explain how it’s going to work, it’s amazing how quickly they respond.”
Rettig is national account manager in the Northeast, where Weyerhaeuser’s iLevel division uses a proprietary software system named Javelin to design flooring systems using Trus Joists, rim boards and engineered wood panels. According to Rettig, Javelin can reduce the number of joists needed by one-third, saving on overall materials. Javelin also marks the openings for plumbing and electrical, which are then cut automatically by a whole-house saw, reducing labor costs, he added.
Strober Building Supply in Cherry Hill, N.J., Falmouth Lumber in East Falmouth, Mass., and distributor Reserve Supply of central New York all offer the Javelin-ready flooring system to their customers.
Boise Engineered Wood Products also offers two types of I-joists in addition to laminated veneer beams and headers to make a complete flooring system. “Ninety percent of the apartments in our area are using open-web trusses,” said Dave Baird, president of Homestead Building Systems in Bristow, Va. “There’s almost nobody around here using dimensional lumber [for flooring] anymore.”
Homestead services the Washington, D.C., metro area, where condos and apartments are often designed with big open living spaces in the center. These rooms can have 20-foot-long walls, a situation that favors a long, continuous application. Boise offers a LVL product called Versa-Stud in lengths up to 24 feet. Its glulam beams run up to 66 feet.
While some multi-family builders stick with traditional studs because of the price, others dislike lumber’s volatility. “They like the price stability of engineered wood,” said Geoff Brown, president of The Lumber Yard in York, Pa. “Ninety days from now, the price won’t change.”
Blueprints for multi-family projects are also pretty static, creating an ideal setting for EWP components, Brown pointed out. “There aren’t as many options in the structure, and you don’t have to customize the designs,” he explained. “And you don’t have homeowners changing their minds, either.”
The Lumber Yard carries engineered wood products made by Georgia Pacific and sold by BlueLinx, GP’s exclusive distributor. Paul Watterson, general manager of engineered lumber for BlueLinx, has seen the use of EWP grow in multi-family housing as single-family housing starts have diminished. He sees a connection.
“Traditional single-family builders are moving into the [multi-family] business and incorporating their framing practices,” Watterson said. Architects are also learning more about engineered wood products through continued education classes, which increases their comfort levels.
Watterson pointed out that multi-family housing projects are subject to a greater number of building codes and requirements, and these are easier to satisfy with engineered wood products. And word is spreading about the ease of running mechanicals through an open floor with pre-cut holes. In East Coast speak, once you build an apartment complex with engineered wood products, you gotta be nuts to use anything else.
Lumber Liquidators closes IPO
Toano, Va.-based specialty hardwood flooring retailer Lumber Liquidators has closed its initial public offering.
The company offered 10 million shares of common stock at a price of $11 per share, including 3.8 million shares offered by the company and 6.2 million shares offered by selling stockholders.
The company intends to use the net proceeds of approximately $36.4 million from the offering to repay outstanding debt and support the growth of the business, which includes plans for 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.
Goldman Sachs and Merrill Lynch acted as joint book-running managers with Lehman Brothers, Banc of America Securities and Piper Jaffray serving as co-managers for the offering.
Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.
The retailer currently operates 111 small-format stores in the United States. The company is traded on the New York Stock Exchange under the symbol “LL.”
NKT Holdings withdraws initial public offering
Providence, R.I.-based HVAC company NTK Holdings has canceled its initial public offering according to a Securities and Exchange Commission filing this week.
The company said that the application was withdrawn “due to the unsettled market conditions.” The company had planned to use the IPO proceeds to repay debt.
The announcement was part of Nortek’s third-quarter earnings statement. Nortek, which reported a 4 percent increase in sales, is a subsidiary of NKT.
The company reported net earnings of $37.6 million for the period ended Sept. 29, down 44.9 percent from last year’s earnings of $67.7 million in the same period last year. Nortek also reported net sales of $602 million, up 4 percent from $579 million last year.
NTK Holdings manufactures air conditioning, heating ventilation and home environmental control technology products.