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Weyerhaeuser will take charges in the second quarter

BY HBSDEALER Staff

Federal Way, Wash.-based forest products company Weyerhaeuser has announced it will take $300 million to $325 million in second-quarter charges for impairments related to its real estate business.

The charge is the result of decisions to lower prices or abandon projects in response to the “continued deterioration of the housing market,” the company said.

Weyerhaeuser also said that its containerboard packaging and recycling division was hurt after storms and flooding in the Midwest forced the shutdown of some production facilities, decreasing its ability to ship goods for a period of time. The company’s containerboard mill in Cedar Rapids, Iowa, has been down for two weeks and is expected to resume operations in early July, the company said.

Weyerhaeuser will announce its second-quarter financial results before the market opens on Aug. 5.

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KB Home had wider losses

BY HBSDEALER Staff

National home builder KB Home saw wider losses in the second quarter, a further testament to weakness in the housing market throughout the United States.

Total revenues declined significantly, down 54 percent to $639.7 million from $1.41 billion in the same period last year. Losses for the second quarter were $255.9 million, wider than the $148.7 million in losses recorded in the same period last year.

The builder delivered 2,810 homes at an average selling price of $226,600 in the second quarter of 2008. Strikingly, in last year’s second quarter, KB Home delivered 4,776 homes at an average selling price of $271,600.

KB Home was hit with numerous charges, including a $176.5 million charge for inventory and joint venture issues, as well as the abandonment of land options contracts.

“Housing market conditions remain difficult for the home-building industry, with inventories of unsold homes expanding as foreclosures rise to record highs, and consumer confidence continuing to deteriorate amid signs of weakness in the general economy,” said Jeffrey Mezger, president and CEO. “Despite substantially lower home prices, relatively low interest rates and an abundance of choices, potential new home buyers remain reluctant to purchase a home.”

Los Angeles-based KB Home has operating divisions in nine states.

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Debunking the myths of mold

BY HBSDEALER Staff

If you control moisture, you control mold. If there is no moisture, there is no mold.

That’s the message delivered by Morrie Newell, staff officer for the Responsible Solutions to Mold Coalition (RSMC), whose group represents building materials companies, associations and government and academic organizations. The coalition released its Guiding Principles, a document designed to give dealers, builders and homeowners information on controlling moisture and, thus, mold.

The bottom line, according to the coalitions: mold spores are everywhere, and they can grow on virtually any surface where moisture is present. Consequently, controlling mold begins with moisture control through best building practices

“It comes down to water intrusion,” Newell said. “Water intrusion should be treated like a smoldering fire.”

Newell noted that water intrusion is not inevitable, but once it materializes, mold is sure to follow. No mold resistant product will work effectively if the building isn’t first properly designed, according to the RSMC. “Mold resistant products are wrongly marketed,” Newell said. “They are not the solution, they are backups, an insurance policy. People are increasingly looking for silver bullet answers when the key is a comprehensive approach that starts with keeping moisture out of the building.”

RSMC, sponsored by grants from USG Corp., National Gypsum and American Gypsum, released “Myths about Mold.” Here are four of them

Myth #1 Mold grows only on paper, wood and other organic material. Mold will grow on any surface, including glass, fiberglass and steel. Mold needs three things to grow: 1) mold spores, which are always in the air; 2) moisture; and 3) a food source. Houses are constructed using a variety of organic materials; therefore, the only effective strategy to control mold is to control moisture.

#2 Mold can be eliminated. Everyone benefits from some molds such as the species that led to the development of penicillin. Only “clean room” technologies can eliminate mold spores. Therefore, the only thing you can control in your home or office is moisture.

#3 Only experts can clean mold. Homeowners can clean small patches of mold using household detergents and warm water. After cleaning, rinsing and drying the spot where mold has grown, rubber gloves and cleaning cloths used in the process should be discarded. Larges patches of mold may need to be eliminated by trained professionals.

#4 Once mold starts, it will always be present. Mold can be stopped but only if moisture is minimized or eliminated. Therefore, leaks should be corrected as soon as they become apparent.

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