UFP continues cost cutting, posts profit
Grand Rapids, Mich.-based Universal Forest Products posted third-quarter net earnings of $5.6 million, up from net earnings of $2.6 million in the same quarter last year.
Net sales of $468.9 million in the third quarter of 2011 were down 2.4% from net sales of $480.6 million for the same period of last year.
"Our cost-cutting efforts and a more stable lumber market helped us generate a stronger profit in the quarter," said CEO Matthew Missad. "Our sales suffered from a stagnant economy, which is likely to remain weak for the near term. Since we can’t rely on an improved economy to grow our business, we are pursuing other avenues of growth."
The company grew sales in three of its five markets: commercial construction and concrete forming, industrial, and manufactured housing. The residential construction and retail building materials markets continue to be soft and saw sales decline in the third quarter of 2011 compared with a year ago.
Residential construction was down 17% from the same quarter last year. The company said it remained focused on multi-family projects and pointed to stats suggesting the wisdom of this strategy. Single-family housing starts were down 1.7% June through August 2011, compared with June through August 2010. On the other hand, multi-family starts increased 28.1% in the same period over 2010.
Missad noted that the company remains financially strong and is well positioned to weather a tough economy, even through the typically weak winter months. "If current forecasts are accurate, we believe significant overcapacity exists in the markets we serve," he said. "We expect that many companies will struggle to make it through the winter, and we remain poised for opportunities to consolidate our markets and improve our value to our customers and our shareholders."
Tempest in a two-by-four: Design values to change?
The National Lumber & Building Material Dealers Association (NLBMDA) expressed serious concern over the potential impact of a proposal to lower the design value of Southern Pine lumber.
The issue comes to the fore as the Southern Pine Inspection Bureau (SPIB) has said that recent testing calls for a reduction of grade-marked Southern Pine lumber design values.
An Oct. 6 letter from SPIB president James Loy, "Proposed Design Values for Visually Graded Southern Pine," can be read here in its entirety.
The proposal for lowering the design values — by about 25% to 30% — will be considered at an Oct. 20 meeting of the Board of Review of the American Lumber Standard Committee (ALSC).
The NLBMDA has come out with serious concerns.
"NLBMDA is very concerned that this proposal, unfortunately timed as the economy and housing market struggle toward recovery, offers no phase-in period or implementation strategy to dampen any detrimental impact on the already depressed building market," according to an NLBMDA alert released Wednesday. "We are also concerned with the extremely limited amount of time the marketplace has been given to anticipate the upcoming Board of Review decision and its impact."
The trade association pointed to three troubling possible outcomes of the proposal:
• Possible stoppage and delays to thousands of single-family, multi-family and commercial construction projects directly resulting from a publication of new design values for Southern Pine;
• Re-designs of buildings, units of buildings and entire projects resulting directly from the publication of new Southern Pine design values; and
• A significant reduction in the economic value of the Southern Pine lumber inventory for dealers, component manufacturers and builders.
Representatives of the NLBMDA will attend the ALSC meeting next week to present its concerns.
ProBuild Holdings’ Joseph Todd leaves the company
Joseph Todd has left ProBuild Holdings. He was the Denver-based pro dealer’s executive VP specialty distribution and pricing.
ProBuild’s Jennifer Thurman, VP corporate communications, confirmed the executive’s departure but declined to elaborate. Todd’s departure from the company follows other recent executive departures — president of operations Jim Cavanaugh in August,and CEO Bill Myrick in July.
Todd was executive VP of the Strober-Haddonfield Group before taking a similar title at ProBuild. Todd also had several high-level positions at Haddonfield Lumber Co. before becoming partner in 1994. The company website also said Todd founded a computer-related home-building business called Total Computer Services.
Earlier this week, ProBuild Holdings confirmed that it plans to leave the Chicago market, closing its Yorkville, Ill. and Westmont, Ill., facilities by Dec. 16.