Universal Forest Products announces cuts
Universal Forest Products Inc. (UFPI) has announced “cost reductions that will result in annualized savings of $10 million” due to weak sales during the first five months of 2011. The Grand Rapids, Mich. company did not specify where or when these cuts will take place; they do not include one-time charges related to reductions, however.
Year-to-date net sales through May 2011 were down 9.5% to $765 million, the wood products supplier reported, including a decline of 15% percent in net sales to retail customers. UPFI also said its results were affected by “significantly higher fuel prices,” which contributed to a decline in gross margin to 10.5%, or a year-to-date decline of 2.2 percent in May 2011 from the same period of 2010. The decline in year-over-year net sales was due, in part, to lower lumber prices in 2011.
The June 24 announcement comes several days after Michael Glenn, the CEO of Universal Forest Products, resigned his position for health reasons. Glenn has agreed to stay on during the board’s search for a replacement, the company said.
Swipe fees: reform delayed, caps reduced
The National Lumber and Building Material Dealers Association (NLBMDA) said it was disappointed by the Federal Reserve Board’s decision to delay and reduce fee caps for certain card transactions.
On Wednesday, the board voted to approve a final rule that would institute a 21-cent cap on interchange, or "swipe," fees, rather than the 12-cent cap initially proposed in December. Moreover, the Board delayed the effective date of the new regulations from July to October 1 in the face of intense lobbying campaigns by big banks, the NLBMDA said. The fees currently average 44-cents per transaction. Small financial institutions with assets under $10 billion will be exempt from the new caps.
"While the final cap does not provide the level of relief building material dealers were expecting, instituting a cap and increasing oversight of out-of-control swipe fees will still cushion the burden retailers bear in these challenging economic times for the housing industry," said Scott Lynch, NLBMDA executive VP.
Last year, Senator Richard Durbin (D-IL) attached provisions to the financial industry reform legislation to direct the Federal Reserve to issue rules for "reasonable and proportional" fees for debit card transactions. NLBMDA joined other retailer groups in support of the Durbin amendment and filed comments in support of the Board’s proposed rule in December. Grassroots lobbying by NLBMDA members helped defeat a recent Senate measure that would have delayed swipe fee relief by more than a year.
California housing starts rise in May
Housing production in California, fueled largely by multi-family building projects, posted the highest monthly permit total for the year in May, according to statistics compiled by the Construction Industry Research Board (CIRB).
Permits were pulled for 4,630 total housing units in May, up 42% from the same month a year ago and up 28% from April. Permits for single-family homes totaled 1,908, down 7% from May 2010 and down 6% from the previous month, while multi-family permits totaled 2,722, up 124% from a year ago and up 71% from April.
Mike Winn, president and CEO of the California Building Industry Association, noted that CIRB is now forecasting that a total of 51,400 permits will be issued in 2011, up from 2010’s total of 44,762 permits, but still down from 2008’s total of 64,962.
“While it seems we had a great month in May, these gains are largely attributed to the multi-family sector,” Winn said. “The construction industry as a whole is still struggling, and we must continue to encourage our lawmakers to ‘do no harm’ as the industry continues to recover.”