S&P places watch on BMHC
Building Materials Holding Corp. (BMHC) has been placed on a negative watch by Standard & Poor’s rating services, a possible precursor to a lowered rating over the next few months. S&P took the action following last week’s SEC filing from Chapman Capital, a BMHC shareholder that is seeking to oust chairman and CEO Robert Mellor.
“This change could lead to unexpected changes in business strategies that neither support credit quality nor stay within our expectations at the current ratings,” said S&P analyst Andy Sookram in a prepared statement.
The credit watch also made reference to “an expectation that this downturn will last longer than previously expected.”
Chapman Capital, based in Los Angeles, owns a 9 percent stake in BMHC, according to the firm. The managing member, Robert Chapman, has filed numerous SEC documents calling for changes at BMHC, the most recent being the replacement of Mellor by Stan Wilson, president of the BMC West division.
BMHC’s 2006 direct sales to professional customers were $2.8 billion. The company’s total sales in 2006 were $3.2 billion.
Third-quarter earnings up at 3M
St. Paul, Minn.-based 3M had record third-quarter sales and earnings, with earnings growth of 7.4 percent to $960 million compared with $894 million in the same period last year.
The company had net sales of $6.2 billion, up 5.8 percent from $5.86 billion last year.
George Buckley, 3M’s president, chairman and CEO, said the company saw gains across all its business segments. In consumer and office products, 3M saw sales grow 5.9 percent to $898 million compared with $848 million in the same period last year. The company’s safety and security products business saw sales rise 10.9 percent to $766 million from $691 million last year.
“The strength of the 3M portfolio was evident in the third quarter as we again generated record sales,” Buckley said. “Geographic diversity was also an important factor. We continue to accelerate investment in research and development, sales and marketing and in simplification of our supply chains.”
3M has business offices globally, with operations in other industries including industrial and transportation; health care; display and graphics; and electronics and communications.
Weyerhaeuser to shutter three iLevel plants
Federal Way, Wash.-based Weyerhaeuser will “indefinitely curtail” operations at three iLevel building products plants because of “slow customer demand.”
The curtailments include an oriented strand board (OSB) plant in Drayton Valley, Alberta; an OSB plant in Wawa, Ontario; and a laminated strand lumber plant in Deerwood, Minn. Work will halt at the plants before the end of the year, the company said.
“The decline in North American housing starts has reduced demand for wood products, requiring us to rationalize our supply of OSB and engineered wood,” said Steven Rogel, chairman, president and CEO of Weyerhaeuser. “We remain committed to these markets. This move enables our remaining plants to better execute our customer strategies.”
The Wawa and Drayton Valley plants are two of nine OSB mills in the Weyerhaeuser system. Wawa has an annual production capacity of 470 million square feet of OSB, while Drayton Valley has a capacity of 415 million square feet annually, the company said.
The Deerwood plant can produce six million cubic feet per year of engineered strand lumber and is one of three such plants owned by Weyerhaeuser.