LUMBERYARDS

Mixed results in Case-Shiller report

BY HBSDEALER Staff

The S&P/Case-Shiller Index, a bellwether for the new housing market, has reported that the U.S. National Home Price Index declined by 3.9% during the fourth quarter of 2010 compared with the same quarter in 2009.

As of December 2010, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices were down compared with December 2009. The 10-City and 20-City Composites were down 0.9% and 1.0%, respectively, from their November levels.

Both Los Angeles and San Francisco reported negative annual rates of return in December, leaving San Diego and Washington, D.C., as the only two cities where home prices are increasing on a year-over-year basis, +1.7% and +4.1%, respectively.

According to David Blitzer, chairman of the Index Committee at Standard & Poor’s: “Unlike the 2006-to-2009 period when all cities saw prices move together, we see some differing stories around the country. California is doing better with gains from their low points in Los Angeles, San Diego and San Francisco. At the other end is the Sun Belt — Las Vegas, Miami, Phoenix and Tampa. All four made new lows in December.”

Blitzer also said that he was seeing “renewed weakness” in some cities that were among the last to reach their peaks, including Atlanta, Charlotte, Portland, Ore., and Seattle, where new lows are being recorded. Dallas, which peaked late, has so far stayed above its low mark of home prices in February 2009. 

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BFS reports $24.6 million loss for quarter

BY HBSDEALER Staff

Builders FirstSource, one of the industry’s largest pro dealers, reported sales of $147.1 million for its fourth fiscal quarter, a 4.5% decline over sales of $154.0 million a year ago. The company estimates that sales increased 3.1% due to commodity inflation, but decreased approximately 7.6% due to volume and competitive pricing.

Net loss for the fourth quarter of 2010 was $24.6 million, compared with net income of $6.6 million for the fourth quarter of 2009. 

Income (loss) from discontinued operations, which includes the results of discontinued Ohio and New Jersey operations, represented a loss of $0.1 million for the fourth quarter of 2010, compared with income of $0.3 million for the fourth quarter of 2009.

In year-end figures, the Dallas-based pro dealer posted $700.3 million for fiscal 2010, which ended Dec. 31, 2010, compared with $677.8 million for fiscal 2009. Net loss for the company was $95.5 million for fiscal 2010, compared with $61.8 million during fiscal 2009.

CEO Floyd Sherman said: “For the current quarter, the competitive pricing pressures we had seen throughout the first nine months of 2010 were still present, but we have recently seen signs that suggest pricing discipline may be returning to the market. Fourth-quarter gross margins were 19.1%, as compared with 19.7% for the fourth quarter of last year. For the year, we felt the negative impact of the commodity price volatility seen during the first half of 2010, as gross margins declined to 18.8% for the year, a 2.2% point decrease from gross margins of 21.0% in 2009. We were able to partially mitigate this margin pressure by continuing our focus on expense control, management of head count and flexing capacity where appropriate. We have done this while maintaining a presence within all of our markets. We have also become a more efficient company, and feel we are well positioned to respond to any increase in building activity.”

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Trex adopts Link Chain LIFO accounting

BY HBSDEALER Staff

Winchester, Va.-based Trex Co, announced a change in its accounting for inventories from a specific goods last in, first out (LIFO) approach to a Link Chain LIFO method. 

The new method is preferable for several reasons, according to Trex:

• It is based on a single inventory pool, instead of more than 30 LIFO pools under the prior method, simplifying the LIFO calculation;
• It provides better matching of sales and expenses by creating fewer LIFO liquidations; and
• It aligns the Company’s inventory costing method with prevalent inventory practice.

The change to the Link Chain LIFO method is effective during the 2010 fourth quarter and affected periods subsequent to December 31, 2006.

Trex is a leading manufacturer of wood-alternative decking.

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