Pacific Northwest builder exits Chapter 11
A U.S. federal court in Vancouver, Wash., has approved the bankruptcy exit plan for Pacific Lifestyle Homes, one of the largest home builders in the Pacific Northwest.
This company voluntarily entered Chapter 11 protection in October 2008. At the time, the company was active in 10 communities.
“While the need for reorganization stemmed from the company’s debt structure, Pacific Lifestyle Homes has adapted business practices over the last two years to have success in a depressed new home market,” according to president and CEO Kevin Wann. “We have made adjustments to the standard size of our floor plans, and have created value by adding more included features in our homes,” he added.
Other factors credited to this rebound include the ability to secure construction financing from the company’s lenders to continue building, and the decision to sell its existing inventory at bargain prices.
“We executed operationally by selling over 160 homes during the process.” Wann said. Pacific Lifestyle Homes was very quick to strike. As part of its original reorganization filing, the company also launched a massive sale of all completed homes at reduced prices. The company felt it was better to move the homes off the books, then to hold out for normal sale margins. “We were aggressive and we acted swiftly. In retrospect, both were very good decisions,” Wann said.
Founded in 1996, Pacific Lifestyle has built more than 2,000 homes in the greater Portland area. The company is currently building five neighborhoods in Vancouver and Washougal, Wash., as well as Salem and Clackamas, Ore. Another initiative will be to secure more lots for future development. Wann said he and his team are already sifting through proposals from financial institutions and developers looking to unload distressed lot inventory.
“I’m excited about the opportunities of the current market in terms of lot availability and affordability. I think we can provide a solution for banks and developers who need to sell inventory,” he said.
Sales dip at Central Garden & Pet
Central Garden & Pet, a leading supplier of seeds, pottery, insecticides and other outdoor living products, reported net sales of $465 million for its third fiscal quarter, a decline of 3% from sales of $482 million in the comparable quarter of 2009. Net income for the third quarter, which ended June 26, was $25.9 million, compared with $31.1 million a year ago.
Branded products sales decreased 6% to $382 million, the company reported. Sales of other manufacturers’ products increased 10% to $83 million.
Third-quarter net sales for the garden products segment were $243 million, a decrease of 9% from $267 million in the comparable fiscal 2009 period.
For pet products, sales for the third quarter were $222.7 million, an increase of 4% from $215 million in the corresponding period last year.
“Despite a soft garden season, the quarter produced solid results in many areas of the company,” said William Brown, chairman and CEO of Central Garden & Pet. “We are continuing to control costs, manage working capital and drive gross profit margin. Our goal is to grow sales and drive further margin and capital efficiency improvement across the business while developing new programs and products that make a difference for consumers.”
Based in Walnut Creek, Calif., Central Garden & Pet is a supplier of lawn, garden and pet products under a variety of brands, including Pennington, Kaytee, Amdro, Sevin, Ironite, Norcal and New England Pottery.
Teamsters strike at two ProBuild yards
Members of a Chicago-area Teamsters Union have gone on strike at ProBuild locations in Yorkville and Wheaton, Ill., over health insurance, guaranteed hours, vacation pay, seniority rights and other issues, according to an article in Fox Valley Labor News.
Teamsters Local 673 voted down ProBuild’s final offer on July 28 and set up a picket line on a state road near ProBuild’s lumberyard in Yorkville, Ill. A third ProBuild facility in Chicagoland, a truss and component plant, is not unionized.
Union members marching the picket line received an impromptu visit from Rep. Bill Foster (D-Ill.) on July 30, who posed for photos with picketing workers. Union Steward Ryan Kiefel said that the new contract — which the teamsters have refused to sign — erases the eight-hour workday guarantee and subsequent heathcare coverage, among other protections. The Denver-based employer also wants to remove four of 10 paid holidays, he said. Restricted access to employees by union members and reduced input on safety rules are also sticking points.
Carolyn Atkinson, a spokeswoman for ProBuild, said the company has been working “proactively” with the union and a mediator from the Federal Mediation and Conciliation Service. “[We want] to present an acceptable solution to our represented employees that reflect the challenges of our industry,” Atkinson said. “ProBuild remains committed to working with the IBT Local 673 leadership to fashion an amenable resolution. In the interim, ProBuild continues to provide a full range of services to our customers, and there has been no interruption to production or deliveries to the customers served by our Yorkville and Wheaton, Ill., locations.”
Union rep Kiefel had a different take on the impasse. “The Chicago market is a big market,” he said. “ProBuild wants to be here, but [at] the price that they want, not the price that’s already established in the market. The company needs to learn that they can’t force the ProBuild model everywhere they go.”