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Sales increase at HD Supply

BY HBSDealer Staff

HD Supply has reported net sales for its fiscal 2011 first quarter were $1.88 billion, an increase of 4.4% compared with $1.8 billion in the first quarter of fiscal 2010. 

Net income for the first quarter, which ended May 1, 2011, was $164 million, compared with $202 million in the same quarter a year ago. Operating income for the first quarter of fiscal 2011 was $12 million, an improvement of $33 million compared with an operating loss of $21 million for the first quarter of fiscal 2010. Operating income is normally the weakest in the first and fourth quarters due to seasonality of the construction industry, the company noted.

In a prepared statement, company CEO Joe DeAngelo said: “We posted our fourth consecutive quarter of sales growth despite prolonged economic headwinds. The growth was driven by our associates’ intense focus on serving customers in our core markets, sales initiative execution in adjacent markets and specialization of activities to further penetrate specific customer segments.” 

The Atlanta-based company experienced some improvement in its industrial and non-residential markets, DeAngelo said, but expected residential construction to remain challenging. An expansion of the White Cap division to Nashville brings that segment’s location network to 132 branches in 29 states. 

“We now operate approximately 770 facilities across our business, and it is the first time we have increased our location count since 2007," DeAngelo noted. “At the close of the quarter, we completed the acquisition of RAMSCO to further strengthen our waterworks business in the Northeast. Furthermore, our strong liquidity allows us to continue to invest in organic growth initiatives, as well as potential bolt-on acquisitions.”

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International Paper makes takeover bid for Temple-Inland

BY Brae Canlen

Temple-Inland, one of the industry’s largest producers of wood and paper products, announced June 6 that it has received an unsolicited offer from International Paper Co. (IP), another pulp and paper giant, to acquire the company for $30.60 per Temple-Inland share in cash.

Temple-Inland’s board of directors voted unanimously to reject the offer “after careful consideration with its independent financial and legal advisers,” according to a public statement. IP’s proposal “grossly undervalues Temple-Inland and is not in the best interest of Temple-Inland’s stockholders,” the board said. 

In a letter to IP’s chairman and CEO, John Faraci, the chief executive of Temple-Inland made his intentions clear.

"Since we launched the ‘new’ Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers (including IP), building products peers and the S&P 500,” wrote Doyle Simons, Temple’s chairman and CEO. “Since that time, our total return to stockholders of 22% greatly exceeds the 5% total return that IP has achieved. Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the board believes the company will continue to provide superior results for our stockholders."

Simons also stated that, "As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should gain from those anticipated benefits, not the stockholders of IP."

Among the many reasons listed in the letter were expected opposition from governmental antitrust authorities, “extremely opportunistic timing” of the offer and an overstatement of Temple-Inland’s net debt.

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Beazer exec forms consulting group

BY Brae Canlen

Tony Callahan, the former senior VP national purchasing, planning and design for Beazer Homes, has left the Atlanta-based home-building firm to form his own consulting firm. The Callahan Consulting Group (CCG) specializes in helping building product and residential construction companies lower costs and lead times, while managing risk throughout the supply chain.

At Beazer, Callahan was also responsible for the architectural designs, CAD drawings and standardization initiative. He joined the company from home builder NVR, where he spent six years in the purchasing and materials management arena.

“I have spent a career helping organizations reduce cost, cycle time and risk,” Callahan told Home Channel News. “The fact is our economy is weak, and the home-building industry is struggling. I have always felt like I can make a difference, and I plan to do just that with this new venture. Whether the client is big or small, I want to be there to help any company within the industry gain market share, reduce costs and get through this downturn.”

In addition to supply chain efficiency, CCG also specializes in assistance with putting together an RFI, RFP or RFQ and meeting with suppliers, service providers and operations team to eliminate waste and help drive costs out of the system, Callahan said.

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