Branch Closure Pace Quickens; Some Get Out of Business
The end of 2008 was not kind to a number of dealers that decided to exit the business during these tumultuous economic times.
The Wolf Organization, a York, Pa.-based company that had 18 retail locations two years ago, is leaving the lumberyard business. The company, which operated its stores under The Lumber Yard name, sold its York and Hagerstown, Md., locations to John H. Myers & Sons, a five-unit dealer also based in York.
At press time, the company was in talks to sell two of its four remaining yards to John H. Myers, with the other two possibly being sold to regional independents. The Wolf Organization said the company plans to focus on its wholesale Wolf Distribution Co., which distributes kitchens cabinets, decking, railing materials, and fiber-cement siding.
Keith Brown Building Materials, which maintained 14 yards in Oregon and California at the start of 2008, closed its five remaining locations Dec. 2. At its peak, the dealer operated 25 stores with 400 employees in 2000. Company chairman Brad Pence told the Oregonian newspaper that suppliers were not willing to extend credit to Keith Brown while banks were unwilling to grant loans.
ProBuild, the largest U.S. pro dealer, revealed it will close three Florida locations. The Denver-based dealer will shutter its Punta Gorda truss facility near Port Charlotte, which is a combination lumberyard and truss operation. ProBuild will combine the Punta Gorda and
Plant City locations to serve the greater Tampa area. Most Port Charlotte employees will transfer to Plant City, the company said. A Naples yard that served southern Florida and Fort Myers also will close. Another yard in Port Charlotte will serve that area. A St. Petersburg facility, part of ProBuild's acquisition of HD Supply earlier this year, also will close.
Stock Building Supply, the No. 2 dealer, confirmed Dec. 11 that it will close its Phoenix operation.
Meek's Lumber closed its facility in Elk Grove, Calif., leaving the company with 13 yards in California and Nevada.
Other closings include Bailey's Lumber & Supply in Gulfport, Miss. Bailey's operates seven locations in Mississippi and Louisiana; Brannum Lumber of Racine, Wis., which decided it would close Dec. 20, just five months shy of its 100th anniversary; and. J. Youens & Co. in Navasota, Texas, a family-owned business since 1874. Additional closings in recent months include Hickman Lumber of Painter, Va., and Clay-Wood Lumber Co. of Kittaning, Pa.
40% of Dealers Seeing Big Sales Drop in 2008
Nearly 40% of dealers responding to a ProSales survey in November said sales at their facilities were down by at least one-fifth for 2008, and only 55% think their locations will turn an operating profit.
The online poll's results also revealed big regional differences. Only 16.6% of dealers in the Northeast expected sales would be down at least 20% vs. 50.6% of dealers in Southern states, 30.6% of dealers in North Central states, and 39.5% of dealers in Rocky Mountain and Pacific states.
Close to one-third of all dealers expect sales to decline 10% to 19%, and another 10.8% forecast a 1% to 9% drop. About 8.1% said sales should be roughly equal. Only 11.3% of dealers believe sales would increase for 2008, and nobody forecast as much as 20% growth.
As with sales, profit expectations varied sharply by region: 68.4% of dealers in the West and 64.5% in the Northeast predicted they'd post an operating profit in 2008, while only 53.6% of Southern dealers and 42% of North Central dealers said the same.
For details, visit www.prosalesonline.com/surveys.
Union? What Union? Survey Shows Wide Opinions
A ProSales survey found huge differences between North and South with regard to unions' penetration of LBM dealers, but near-nationwide concern that labor's influence at lumberyards will increase.
Results from an online poll of more than 200 dealers nationwide found roughly a quarter of the respondents in the Northeast and North Central states said there was a union at their places of work, while only 1.4% of the dealer respondents in Southern states said the same. Meanwhile, 14% of dealers in states from the Rocky Mountains westward said they have a union.
In most cases, the union members are drivers and yard crews, along with a smattering of warehouse personnel, carpenters, and millshop people; virtually all of the unions have been around for many years. Only 6.8% of dealers said there had been any attempt by a union to organize workers at their jobsites since 2005, and in only one case nationwide did the organizing attempt succeed.
Dealers and LBM associations fear that could change with the arrival of Barack Obama in the White House and more Democrats in Congress. The labor movement is pushing the government to pass the Employee Free Choice Act, which among other things would let employees form unions simply by signing cards authorizing representation; a secret ballot of employees no longer would be required.
The ProSales survey, done in November, had 247 respondents, 207 of whom identified themselves as working at lumberyards, molding or millwork shops, and short-line specialty companies. The results reflect only those of the 207. For details, visit www.prosalesonline.com/surveys.
Earnings News: Beacon Sales Up, Stock Posts Operating Loss
Beacon Roofing Supply, a Peabody, Mass.-based roofing materials distributor, reported sales in its fiscal fourth quarter ended Sept. 30 increased 14.9% to $597.2 million from $493.8 million in the year-earlier period, in good part because of "an unusually large rise in prices" for roofing products in late summer.
Residential roofing product sales jumped 36.8%, and sales of nonresidential roofing products grew 6.6%. Beacon noted that it was able to pass along manufacturers' increases in product prices, and that there was "strong re-roofing activity" in storm-impacted areas of the country.
The distributor reported fourth-quarter net income of $24.9 million, a 120% increase from $11.3 million in the same period a year ago. For the full year ended Sept. 30, Beacon's net income rose 59% to $40.3 million from $25.3 million. Full-year sales increased 8.4% to $1.78 billion in 2008 from $1.65 billion, mostly as a result of acquisitions and an increase of 1.3% in existing-market sales that were mostly due to the same factors mentioned for the fourth quarter, Beacon said.
Stock Building Supply recorded an operating loss of about $60 million in its fiscal first quarter ended Oct. 31, Stock's U.K.-based parent, Wolseley Plc, reported. That loss at America's second-biggest LBM operation came on a 20% decline in sales, and was 10 times worse than it posted in the year-earlier quarter. Wolseley also said it initiated head count reductions in its fiscal first quarter totaling around 3,400. On Oct. 23, Stock announced it will close 86 facilities, cut 3,000 jobs, and exit 16 markets in six states.
In Brief
The New Jersey Building Materials Dealers Association chose Doug Sterner and Frank Dalinsky as its Lumbermen of the Year for 2008. Sterner, whose family has been in the New Jersey lumber business since 1879, owned Sterner Lumber in Belmar, which was sold to Jaeger Lumber in 1999. Sterner still runs the yard, where he has been working since he was 10. Dalinsky worked 41 years at Presco in Philadelphia and is now company president. ...The Mountain States Lumber & Building Material Dealers' Association chose Bill Miller, president and CEO of Colorado's Alpine Lumber, as its Industry All-Star. Miller started in the lumber industry as a truck driver in 1976. He joined Alpine in 1985 and moved up the corporate ladder to become president and CEO in January 2006.
28%
The expected rise in demand for windows and doors in the United States per year through 2012 to total about $40 billion. That's about half the growth rate of the previous five-year period.
12.8%
The predicted drop in cement consumption in 2008. It's also predicted to fall another 11.9% next year and an additional 2.1% in 2010.
SOURCE: Portland Cement Association
25%
The estimated amount of private forestland in the United States that is managed in accordance with one of three major forest certification schemes (SFI, FSC, or American Tree Farm System).
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Send your company's news, announcements, and events to Evamarie Socha, via e-mail esocha@hanley wood.com or fax 202.785.1974.
