Volume 10, Issue 9 - November/December 2009

What’sNews

 

LEGISLATIVE NEWS
Formaldehyde Legislation Introduced in Senate
After nine months of development and coalition-building among industry and environmental groups, legislation calling for a national standard on formaldehyde emissions from composite wood products was introduced in the U.S. Senate on September 11.

Co-sponsored by Sen. Amy Klobuchar (D-Minn.) and Sen. Mike Crapo (R-Idaho), S. 1660, the Formaldehyde Standards for Composite Wood Products Act, establishes the first ever national standard for product emission ceilings. It also directs the U.S. Environmental Protection Agency (EPA) to implement regulations on testing, certification, recordkeeping and enforcement to give American consumers the highest level of confidence in composite wood products purchased for their homes and offices.

The legislation is based on the regulation promulgated last year by the California Air Resources Board (CARB), and would add a new section to the federal Toxic Substances Control Act (TSCA) and require EPA to enact a national rule by 2011. Sen. Klobuchar and Crapo sit on the Environment and Public Works Committee as well as the relevant subcommittee that oversees TSCA.

The legislation includes the following:

• Sets emission ceilings identical to the CARB rule;

• Applies to particleboard, medium-density fiberboard (MDF) and hardwood plywood manufactured or sold in the U.S, as well as finished products containing them;

• Requires EPA to establish implementing regulations based on California’s rule, including third-party testing and certification of quality control measures in composite panel manufacturing facilities, and the ability to track and verify the use of compliant products through their distribution and use in finished products such as furniture, cabinets, flooring, doors, etc.;

• Requires EPA to recognize and incentivize the use of ultra-low-emitting formaldehyde (ULEF) and no-added formaldehyde (NAF) adhesives in composite wood products; and

• Requires EPA to work with other federal agencies to provide for equally robust compliance verification of imported products as well as those manufactured in the United States, and corresponding enforcement.


COMPANY NEWS
Serious Materials Closes $60 Million in Series C Financing

Serious Materials has closed $60 million in Series C financing. Mesirow Financial, a diversified financial services firm in Chicago, led the company’s efforts to obtain new investors.

Additional new investors include Enertech Capital, Cheyenne and Saints Capital. Previous investors including New Enterprise Associates (NEA), Foundation Capital, Rustic Canyon Partners, Navitas Capital and Staenberg also participated in this funding round, bringing Serious Materials’ total raised capital to more than $120 million. Serious officials say they will use the funds to accelerate the company growth and complete development of its next-generation, energy-saving building products.


FINANCIAL NEWS
PGT Acquires Hurricane Window and Door Factory Operating Assets
PGT Inc. has acquired the operating assets of Hurricane Window and Door Factory in Fort Myers, Fla., according to a recent announcement by PGT. Hurricane Window and Door Factory designs and manufactures The Protector Series vinyl impact product lines for the single and multi-family residential markets. Terms of the agreement were not disclosed.

PGT officials say the acquisition broadens its capabilities in both the vinyl and impact-resistant markets, while also allowing it to offer the energy efficiency benefits of vinyl. The products included in The Protector Series qualify homeowners for the government’s energy tax credits in the American Recovery and Reinvestment Act of 2009, according to PGT.

The Protector Series will be folded into the PGT WinGuard® product portfolio.

PGT also released its second-quarter financial results around the time of the purchase. They showed a $13.2 million drop in sales—down by 22 percent compared with the second quarter of 2008.


PGT’s Second-Quarter Financial Results

  2008 2009 % Change
Net Sales $46.9 million $33.7 million -28.1 %
Net Income $1.9 million $342,000 -82 %

Our sales continued to be negatively impacted by the most difficult market conditions we have ever encountered … ,” says Jeff Jackson, PGT’s executive vice president and chief financial
officer.

However, he points to some encouraging signs in the second quarter, including an increase in sequential quarter sales, and efficiency initiatives that positively impacted the company’s ability to generate cash.

Manufacturers Make Cutbacks
Two major door and window manufacturers have made cutbacks in recent months in light of the current economy.

Jeld-Wen’s plant in Corsicana, Texas, closed on September 25, due to a reduced demand for windows in both the new construction and remodeling markets, according to company officials.

“With nationwide new home starts hovering at their lowest levels in 30 years, closing the Corsicana plant became a necessary, but very difficult, business decision.” says senior vice president Rick Hetherington.

“We have a great team of dedicated, hard-working employees and this closure in no way reflects their reliable performance,” he added

Jeld-Wen has operated the plant since 1984 and employed between 90 and 115 full-time employees depending on the time of year and order levels.

In addition, Pella Corp. has eliminated 37 full-time manufacturing jobs in Sioux Center, Iowa, accordaccording to a statement from the company. The changes were effective on September 18.

“Through July of this year, new housing starts in the [United States] were down by more than 40 percent year-to-date over last year’s deep declines, resulting in excess manufacturing capacity in Sioux Center,” says spokesperson Kathy Krafka Harkema. “That’s why we’re taking these measures now to align our Sioux Center workforce with business needs before the onset of winter when construction traditionally slows even further.”

The company’s Sioux Center Operations now employs 338 in the facility where the company manufactures windows.

“We will continue to monitor the economy and market actions in the future to determine what, if any, additional actions might be necessary,” adds Krafka Harkema.

REHAU Partners with Four Seasons on Window Line
REHAU has announced a partnership with Four Seasons for the fabrication of its System 700 and System 1400 window lines, and System 4500 door line. A formal ribbon-cutting ceremony was held on September 16 at the Four Seasons manufacturing facility in Holbrook, N.Y.

“Four Seasons shares a number of important business fundamentals with REHAU, including a longstanding reputation as a premier manufacturer, a keen industry foresight regarding the importance of energy efficiency and a sincere dedication to delivering innovative, high-quality products within a dynamic marketplace,” says REHAU CEO Dr. Kathleen Saylor.

Some of those products include the use of the CONSERVAGLASS PLUS glass system, “engineered to make a notable and competitive difference in sunroom temperature management,” according to Brian Guyer, market development manager, doors and windows, at REHAU.

“The CONSERVAGLASS PLUS glass package also now will be integrated with REHAU’s high-performance vinyl profiles, resulting in a superior window that also qualifies for the $1,500 federal tax credit through the American Recovery & Reinvestment Act,” he adds.

Four Seasons CEO Patrick Marron, who also attended the ceremony, said, “We are very pleased with the support REHAU has provided in our fabrication ramp-up, and excited about the widened market channels these new window lines will allow us to explore.”

Local dignitaries including New York State Sen. Brian Foley and Islip Town Supervisor Phil Nolan, Legislator Bill Lindsay and Councilman Christopher D. Bodkin, among others, also attended to show their recognition of the partnership’s positive business effects on the region.

BRIEFLY
Andersen Windows has purchased a supplier, Composite Technologies of America, and has re-named it Custom Pultrusions Inc., according to Andersen spokesperson Maureen McDonough … Premier Industrial Supply, the Arizona supplier of the XtraBond®, XtraFoam®, and XtraFlash® line of window products, is expanding its presence with the grand opening of its facility in Canton, Ohio. The 10,000-square-foot facility will supply and support the continuous growth of the company’s East Coast customer base, and allow the Phoenix facility to focus on all West Coast customers … Officials at WTS Paradigm have signed a new office space agreement, expanding into the office adjacent to its current space in Middleton, Wis. The expansion allows the WTS staff increased access to multiple conference rooms, enhanced wireless capabilities, as well as a café and fitness center.

DWM
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