PEOPLE IN THE NEWS: Doyle Simons
Timberlands dealer and wood manufacturer Weyerhaeuser Co. has a new president and CEO, effective Aug. 1. Doyle Simons will be succeeding incumbent retiree Dan Fulton, who will then serve as executive vice chairman of the board of directors until his retirement in October.
Simons, who was previously chairman and CEO of Temple-Inland, is currently acting as CEO elect for Weyerhaeuser and has been serving on its board of directors since June 2012. He was also appointed RISI’s 2009 North American CEO of the Year in the paper and forest products industry.
"As former CEO and chairman of Temple-Inland, Doyle has a proven track record of driving performance to achieve results," said Chuck Williamson, chairman of Weyerhaeuser’s board of directors. "He has deep experience in the forest products industry, broad business and functional expertise and a passion for operational excellence."
Both Simons and Fulton have proven track records of navigating challenging economic climates, according to the company. Fulton stated that he expects that Simons will maintain Weyerhaeuser’s competitive edge as the housing recovery continues.
RONA to sell Commercial and Professional division
RONA, Canada’s largest hardware retailer and distributor, is selling its Commercial and Professional Market division to Talisker Plumbing Corp., a subsidiary of Emco Corp., for an expected net cash consideration of $215 million after fees and transaction expenses.
According to Bloomberg, the sale will primarily help RONA pay down debt and free up capital to focus in on its retail operations.
The division, which specializes in plumbing, heating, ventilation and HVAC systems, was created when RONA acquired Noble in 2007. It now employs more than 1,400 in Ontario, Quebec and British Columbia, and it is expected to maintain its store locations and current management structure.
As of the June 20 statement, the transaction is still subject to regulatory approvals. The division will be classified as a discontinued operation, and RONA will be required to value the assets held for sale. The transaction is expected to result in a pre-tax loss of approximately $125 million.
Lumber Liquidators accused of formaldehyde violation
Lumber Liquidators Holdings has been accused of selling products containing illegal levels of formaldehyde.
The claims came to light in a report posted on Seeking Alpha last Thursday by analyst Xuhua Zhou.
Bronstein, Gewirtz & Grossman is among the legal firms investigating the allegations on behalf of purchasers of securities for the company. Another is Faruqi & Faruqi. From June 19 to June 21 — after the allegations of high levels of formaldehyde surfaced — shares of Lumber Liquidators fell about 11%. On Tuesday morning, the stock rebounded to above $77.00 in early trading.
Lumber Liquidators, one of the largest retailers of hardwood flooring in the United States, trades its stocks at nearly 50 times its 2012 earnings, according to Seeking Alpha. Despite presenting a short opportunity to investors, the company lacks a sufficient quality control system, which may be part of the reason for its high margins. The source speculates that product recalls could inflict serious harm to its valuation.
Toana, Va.-based Lumber Liquidators launched an end-of-quarter clearance sale for all of its flooring products on Sunday.