Yard Notables: February 2009

More Trouble for Big Dealers; BMHC, 84 Lumber Continue Closings Trend

Two of the nation's largest dealers, BMHC and 84 Lumber, continued to show the effects of the dwindling market in revealing they are shedding locations and employees.

Building Materials Holding Corp. (BMHC), America's fifth-largest lumber and building materials dealer, announced it will close its operations in northern Nevada and shut facilities in Oregon, California, Texas, Colorado, and Arizona. The decision affects roughly 260 workers.

The northern Nevada operations include facilities in Reno and Sparks. In Oregon, BMHC will close an operation in Sherwood and serve the greater Portland market from nearby Vancouver, Wash. In California, BMHC will consolidate the operations at its Marysville facility into its Modesto yard. "Other operational consolidations" will take place in Texas, Colorado, and Arizona, BMHC's announcement said. It didn't elaborate. On Jan. 1, it officially closed its San Francisco headquarters and changed its corporate headquarters address to Boise, Idaho.

On Nov. 6, BMHC reported a $45.2 million net loss for the third quarter as sales fell 39% to $364 million. That was a swing from the net income of $4.2 million reported in last year's third quarter, when sales totaled $594 million. During 2008, the company merged its SelectBuild and BMC West units.

Meanwhile, 84 Lumber announced that it closed 11 more yards and a component, effective Jan. 11. The decision affects about 125 employees.

Closings include stores in Redmond, Ore., and McFarland, Wis., with 84 Lumber effectively exiting both those markets and states. About six months ago, 84 Lumber also closed a component plant in McFarland.

Other closings include: Stockertown, Pa., which will be consolidated into a store in Allentown, Pa.; Massillon, Ohio, which will be consolidated into a store in Macedonia, Ohio; Georgetown, Del., which will be consolidated into a store in Milford, Del.; Savannah, Ga., which will be consolidated into a Beaufort, S.C. store. Closings in Lafayette, Ind., and Washington Courthouse, Ohio, are complete exits from those markets. In the Denver market, 84 closed its Henderson, Colo., store and truss plant, leaving the dealer with just one location in the state, in Grand Junction.

Since Jan. 1, the company also cut 60 more positions at its corporate headquarters in Eighty Four, Pa. About 350 employees now work at the location.

The latest round of job cuts is "across the board," Jeff Nobers, vice president of marketing and corporate communications, told ProSales. "We are still operating in the top 150 markets or better in the country. The bottom line is we not going to close a store if it's making money. These are operations that were not profitable."

84 Lumber requires a minimum of 3,000 housing starts within a 25-mile radius of a store location. Before the latest round of closings, 84 Lumber disclosed that as of Dec. 15, it had also closed five more yards and two component plants and cut 28 positions at its headquarters.

In the past two and a half years, 84 Lumber has closed 180 locations and 3,200 positions. After the latest round, 84 Lumber operates 319 locations and six component plants in 35 markets. It ranked third on the 2008 ProSales 100 with 2007 total sales of $3.1 billion and 434 stores as of Dec. 31, 2007.

Smitty's Files for Chapter 11, Maintains Business 'as Normal'

In another sign of the troubled industry, Smitty's Building Supply Inc. filed Jan. 5 for protection under Chapter 11 of the U.S. Bankruptcy Code. The housing industry's slump forced the action, Smitty's CEO Rick Smith said in a company announcement.

Smith said in a letter to employees that business "will continue as normal." He noted that Bank of America has provided the company with a $10.5 million line of credit, including $3.75 million in post-filing debtor-in-possession financing.

Smitty's is based outside Washington in Alexandria, Va., with a branch in Manassas, Va., and window showrooms in Chantilly, McLean, and Falls Church, Va., as well as Rockville, Md. It ranked No. 57 on the 2008 ProSales 100, with $91.5 million in sales in 2007, virtually all of them to professional builders and remodelers.

Zeeland, Hamilton Farm Bureau Combine for New Company

Western Michigan-based Zeeland Lumber and Supply Co. and Hamilton Farm Bureau's lumber division have merged, adding a truss operation to Zeeland Lumber's capabilities. Zeeland will own 75% of the new operation, while Hamilton will own 25%.

What is now Zeeland Lumber Holdings has three divisions: Zeeland Lumber and Supply, Hamilton Truss, and Zeeland Contractor Services. Zeeland Lumber president Harold "Herk" VandenBosch Jr. is chief executive officer and president. Hamilton Farm Bureau president Bob Fenton sits on the company's board.

In Brief

Allied Building Products Corp. opened locations in South Windsor and Bridgeport, Conn. The new branches occupy buildings formerly leased by C&S Distributors. ...Bradco Supply Corp. opened a branch in La Marque, Texas, its second serving the Houston and Gulf Coast regions. ...Tri-State Forest Products Inc., Springfield, Ohio, opened a new distribution facility in Edwardsburg, Mich., in January. ...Building products manufacturer Ply Gem Industries closed its window and door manufacturing facilities in Hammonton, N.J., and Phoenix. ...Fiber Composites LLC said Huttig Building Products will sell itsFiberon brand decking and railing in the western United States. ...Marvin's Building Materials and Home Centers opened in December two stories in Calera and Albertville, Ala. Marvin's now has 25 stores in Alabama, Mississippi, and Florida. ...Fox Home Center has a new building in Oak Lawn, Ill., replacing a facility that was destroyed by fire in May 2007. ...Pelletier's Building Supply, Fitchburg, Mass., got a $500,000 loan from the commonwealth's Community Development Finance Corp. to support 40 jobs at the lumberyard. ...Begley Lumber is closing its Hyden, Ky., yard until the market recovers. ...Budget Build Lumber & Supply Inc., Ferriday, La., will expand its operations significantly when its moves into an old Wal-Mart building. ...Ganahl Lumber's headquarters in Anaheim, Calif., became the temporary home for 200 youngsters and teachers when the roof collapsed at an occupational training center across the street. "I am proud to say that our people acted on their own, very quickly and very appropriately to the emergency situation," president Peter Ganahl told ProSales. ...New South Construction Supply has acquired the building material business of Brame Specialty Co. Inc., one of the top distributors of the L.M. Scofielddecorative concrete line in North Carolina. ...Fiber Composites LLC and Sensibuilt Building Solutionswill merge their alternative decking operations, adding Sensibuilt products to Fiberon brand offerings. ...MiTek Industries Inc. will acquire Aegis Metal Framing LLC, a maker of cold-formed building components. ... Simonton Windows donated a house-full of windows to the St. Jude Dream Home giveaway in Morgantown, W.Va. ...Harvey Building Products has opened a distribution center and showroom facilities in King of Prussia, Pa.

People

Bender Lumber Co., Bloomington, Ind., has promoted Blake Wheeler to general manager and Scott Bender to area operations manager. ...The Associated General Contractors of Alaska named Collette Bennett, an inside sales rep at Spenard Builders Supply in Anchorage, as its supplier of the year. ...The Lumber Association of California and Nevada has named Steve Patterson of Central Valley Building Supply as its president, and Laurie Vance of The Mill Yard as first vice president. ...Joe Mazzola, who 50 years ago co-founded Raymond Building Supply in Fort Myers, Fla., is retiring. ...Don Zeman, known as "America's Home Improvement Expert," died Dec. 31. He was host of "Homefront with Don Zeman," a nationally syndicated home improvement radio show heard in more than 300 markets. He was 55.

1 in 4

The number of baby boomer generation households that expects to move eventually from their current homes. Most are looking for a single-level home that is more comfortable or convenient. SOURCE: AARP

$2 Trillion

The collective decrease in U.S. home value by the end of 2008, according to a Dec. 15 report. SOURCE: CNN.com, Zillow.com

43,000

Number of people who have earned LEED professional accreditation since the program was launched in 2001. The program distinguishes building professionals with the knowledge and skills to steward the LEED certification process. SOURCE: U.S. Green Building Council