Southwest: Cooling trend
When it comes to green building materials, few trends speak more directly to consumers than energy conservation. The bottom line surfaces each month with the utility bill, and in the southwestern corner of the country, air conditioning can consume hundreds of dollars’ worth of kilowatts.
Luckily, building scientists have developed a number of products that reduce or deflect the amount of heat a home absorbs, and home builders are incorporating these products into their projects to differentiate themselves.
KB Home offers “TechShield,” a radiant barrier made by Louisiana-Pacific (LP), to homeowners throughout the Sunbelt states. In 2007, nearly one in two home buyers in those markets chose that option, according to the Los Angeles home builder. In some markets the acceptance rate was more than 80 percent.
TechShield combines oriented strand board (OSB) with a thin sheet of aluminum, creating a roof sheathing that deflects heat and reduces attic temperatures by 30 degrees. Ken Smith, a product manager with LP, estimates that the product reduces cooling bills, on average, by 20 percent.
Builders also save money on construction costs by using TechShield, Smith said. “It reduces the HVAC tonnage,” he explained.
Another “energy upgrade” offered by KB Homes involves DuPont’s ThermaWrap, an aluminum-clad membrane that reflects heat away from walls. DuPont also makes a version for the attic called AtticWrap. Both products are versions of Tyvek, an already well-established product among builders.
Cornerstone Homes, a regional builder with communities throughout Arizona, installs ThermaWrap as a “low-E wall” to lure prospective buyers—who can expect to save $30 to $40 a month on energy expenditures, according to product manager Arturo Horta.
“Builders in the Southwest understand the benefits of the product, because they’ve been using radiant barriers for 20 years,” Horta explained. But consumers like a more immediate payback, which is exactly what they get when they open their utility bill. “It’s a positive cash flow from the very first day,” he said.
Builders are engaging in one-upmanship as they strive to construct homes that are even more energy efficient than the developer next door. In the Las Vegas area, Pulte advertises itself on billboards as the “most energy-efficient home builder,” based on residential projects that cut heating and cooling costs by 50 percent.
Nat Hodgson, vp-construction for Pulte’s Las Vegas division, stands behind that claim with cellulose insulation, low-E windows, efficient furnaces and attic radiant barriers. Pulte can estimate what homeowners in many of its Las Vegas developments will pay in utility bills, and it guarantees that amount for up to three years.
“We put it on a placard right outside the model home,” Hodgson said. The builder’s commitment to energy-efficient homes, which includes its Del Webb division, has also qualified the company for a federal tax credit, he added.
Government incentives have always played a role in the choice of energy-efficient products, especially when builders are trying to meet Leadership in Energy and Environmental Design (LEED) standards in schools, state office buildings and other government projects.
California’s Title 24, which governs all aspects of construction in the Golden State, mandates certain energy-efficient measures but allows builders latitude in meeting other goals. Low-E windows, HVAC system design and insulation can all count toward compliance, as well as “cool roof” products like CertainTeed’s CoolStar line of reflective coatings and cap sheets.
“We have seen more and more builders include radiant barriers in their specs, especially in California, due to Title 24,” said Terry Stone, general manager of marketing, for Ainsworth. The Vancouver, B.C., based manufacturer makes Thermastrand, an aluminum-clad OSB panel, which promises a 10 percent to 25 percent reduction in cooling costs when installed on a home’s roof.
Some of Ainsworth’s customers are racking up LEED credits by using Forest Stewardship Council-certified Thermastrand in their projects, Stone said. On top of the FSC certification points, they get points for using a non-urea formaldehyde composite product, which is better for indoor air quality. Plus more points for energy savings from the radiant barrier.
On the other hand, price-conscious builders see products like Thermastrand as a low-cost way to comply with energy-saving mandates. “For large national builders, radiant barriers are one of the least expensive technologies to use,” Stone said.
Lumber Liquidators closes IPO
Toano, Va.-based specialty hardwood flooring retailer Lumber Liquidators has closed its initial public offering.
The company offered 10 million shares of common stock at a price of $11 per share, including 3.8 million shares offered by the company and 6.2 million shares offered by selling stockholders.
The company intends to use the net proceeds of approximately $36.4 million from the offering to repay outstanding debt and support the growth of the business, which includes plans for 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.
Goldman Sachs and Merrill Lynch acted as joint book-running managers with Lehman Brothers, Banc of America Securities and Piper Jaffray serving as co-managers for the offering.
Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.
The retailer currently operates 111 small-format stores in the United States. The company is traded on the New York Stock Exchange under the symbol “LL.”
NKT Holdings withdraws initial public offering
Providence, R.I.-based HVAC company NTK Holdings has canceled its initial public offering according to a Securities and Exchange Commission filing this week.
The company said that the application was withdrawn “due to the unsettled market conditions.” The company had planned to use the IPO proceeds to repay debt.
The announcement was part of Nortek’s third-quarter earnings statement. Nortek, which reported a 4 percent increase in sales, is a subsidiary of NKT.
The company reported net earnings of $37.6 million for the period ended Sept. 29, down 44.9 percent from last year’s earnings of $67.7 million in the same period last year. Nortek also reported net sales of $602 million, up 4 percent from $579 million last year.
NTK Holdings manufactures air conditioning, heating ventilation and home environmental control technology products.