Sales flat for building materials at Boise
Boise Cascade Holdings has announced a $5.6 million net loss for its third fiscal quarter, which ended on Sept. 30, 2010. BC Holdings’ building products subsidiary, Boise Cascade, L.L.C., reported third-quarter 2010 earnings before interest, taxes, depreciation and amortization (EBITDA) of $7.7 million. One-time earnings included a $4.6 million litigation settlement for Boise Cascade, L.L.C. in the third quarter. This compares with earnings of $11.9 million in the third quarter of 2009.
Building Materials Distribution (BMD) segment sales were $470.7 million in the third quarter, compared with $472.1 million a year ago. Prices for the segment were up approximately 9%; however, sales volumes declined, offsetting the benefit to revenues.
Quarterly earnings for the BMD division were $4.6 million, compared with $9.7 million in the corresponding period of 2009.
Wood Products segment sales in the third quarter were $183.4 million, up 12% from the same quarter a year ago. The sales increase was attributable primarily to 18% higher plywood sales volumes and 9% higher plywood sales prices. The main factor contributing to the improved financial performance was increased product pricing, most notably plywood.
Losses narrowed considerably during the third quarter for the wood products division, to $972,000 from $4.2 million in the same quarter last year.
“There were a few bright spots in the quarter compared with the same quarter a year ago, namely higher plywood sales volumes and modestly higher prices for most of the products we manufacture,” said company CEO Tom Carlile. “However, the third quarter this year was largely a disappointment when compared with the seasonal demand strength of the third quarter in most years. We are expecting the difficult operating environment to continue at least through the coming winter months.”
The company’s outlook, as stated in its released earnings, was: “We expect to continue to experience below-normal demand for the products we distribute and manufacture. Industry commodity wood product prices will be volatile in response to operating rates and inventory levels in various distribution channels. We expect to manage our production levels to our sales demand, which will likely cause us to operate our facilities below their capacity.”
Lowe’s raises offer to drywall victims
Lowe’s has substantially raised its offer to customers who claim they bought defective drywall at its stores in Georgia after coming under criticism for its previous offer, according to a report by the Sarasota Herald-Tribune and Pro Publica.
In Lowe’s latest offer, filed on Oct. 28, affected homeowners are now eligible for up to $100,000 in cash, instead of gifts cards in the amounts of $50, $250 or $2,000, with a maximum payout of $4,500 in combined cash and gift cards. The previous settlement had been offered as part of a class action lawsuit that is being negotiated in a Georgia state court.
The earlier settlement set aside $6.5 million for victims and $2.1 million for the attorneys who negotiated the agreement. This resulted in an outcry from public interest attorneys and consumer advocates, who also criticized the payout as being too low. The cost of removing and replacing tainted drywall and corroded electrical wiring can cost $100,000, according to the U.S. Consumer Product Safety Commission.
The newly amended settlement was negotiated by a separate team of attorneys on behalf of a Florida corrections officer. Lowe’s has set aside an additional $2.25 million for the homeowners in this case. The original attorneys will still get $2.1 million in fees. The new attorneys will receive a separate fee based on how many $100,000 claims Lowe’s eventually pays.
The North Carolina retailer has stated that it does not believe the drywall it sold was defective because Lowe’s vendors assured the company that they never sold it any Chinese drywall. Lowe’s entered into the original agreement “as part of our commitment to serving our customers,” according to a company statement.
Sentence for former Depot buyer
A former Home Depot product category merchant was sentenced to more than two years in prison for participating in what has been described as a $1.5 million fraud scheme in the retailer’s flooring department.
According to an article in the Atlanta Journal Constitution, Ronald Douglass Matheny II, 43, of Chattanooga, Tenn., was sentenced to two years and three months after he pleaded guilty to conspiracy to commit mail fraud and wire fraud, and additional charges.
In April, two of the three figures involved were sentenced. James Robinson, a former divisional merchandise manager for hard flooring at Home Depot received a sentence of 63 months in prison. Ronald Johnston, the company’s global product merchant for rugs, was sentenced to 46 months in prison. Both men were also ordered to pay $1.8 million.
In June, former buyer Anthony Tesvich was sentenced to six and a half years.