Volume 11, Issue 1 - January/February 2010


ICC Reduces Fenestration U-Factors During Code Hearings
A number of code change proposals for the International Energy Conservation Code (IECC) were presented during the recent International Code Council Development Hearings in Baltimore, resulting in several possible changes.

EC13, proposed by the Department of Energy (DOE) was approved, resulting in reduced U-factors for fenestration and skylights. Shortly thereafter, ICC passed EC34, which further reduced fenestration U-factors in the South. This resulted in the following U-factors: “NR” (no requirement) for zone 1, 0.40 in zone 2, 0.35 in zones 3-4 and 0.32 in zones 5-8.

According to Dr. Thomas D. Culp of Birch Point Consulting LLC, “The northern changes in U-factor were not very controversial, but there was strong debate about southern U-factors, with the concern that these U-factors would not allow aluminum windows in places like Florida and Texas where they are common. On top of this, [ICC] then eliminated the allowance for hurricane impact-resistant products with higher U-factors (approving EC35), over strong debate about safety, structure and performance of different products. These are just initial recommendations from the code development committee, and these items will no doubt be controversial items at the final action hearings, where final approval or changes are made by the code officials.”

Culp notes that these were preliminary hearings, and any item can change at the final action hearings in October 2010.

New Company Forms and Acquires Three Former Stock Locations
BlackEagle Partners LLC, a private equity firm focused on turnarounds and special situations, and Building Industry Partners LLC, a private equity firm focused on the U.S. building products industry, have created an entity called US LBM Holding LLC, in partnership with L.T. Gibson, to acquire three regional operations from Stock Building Supply LLC.

According to a November press release, the three markets in which the Stock Building locations were purchased are Wisconsin, Central New York and Connecticut. US LBM will operate as a holding company, re-establishing the acquired operations as local autonomous businesses under their former or independent trade names, Wisconsin Building Supply, Bellevue Builders Supply and East Haven Builders Supply, respectively.

US LBM and its subsidiaries will be comprised of 13 locations and more than 500 associates.

ProBuild Expands in Nashville
ProBuild Holdings recently announced the opening of its newest component facility in Nashville. The facility, which features truss and wall panel manufacturing capabilities, will initially create 20 new jobs for the Nashville market, and serves both residential and commercial contractors, according to the company.

In addition to the Nashville facility, ProBuild is doubling the size of its Smyrna facility in Tennessee to support increased demand in the greater Nashville market. The expanded facility in Smyrna will host a full-line lumber yard, millwork manufacturing plant and a gypsum distribution operation.

Masonite Inc. Announces Acquisition of Israeli Steel Security and Safety Entry Door Business
Masonite Inc. has acquired 7 Tech, an Israeli-based steel security and safety door business, according to a statement from Masonite. Masonite’s Israeli subsidiaries, Etz Karmiel Ltd. and Open Gallery Ltd., will add the 7 Tech steel security and safety doors to the company’s interior and exterior wood door collection.

The company says the move will create a single source of supply for Masonite customers in Israel. In addition to its growing Israeli market position, 7 Tech currently exports its products to Europe, and Masonite intends to expand the export opportunities throughout the Middle East and Europe.

Smitty’s Building Supply Emerges Successfully From Chapter 11 Bankruptcy
Smitty’s Building Supply Inc., a distributor in the northern Virginia and metropolitan Washington, D.C., region, has announced a successful emergence from a Chapter 11 bankruptcy proceeding. Company owners also have disclosed their intention to consolidate operations in Manassas and close their Alexandria location effective December 1, 2009.

In an open letter to customers, the Smith family, which owns the company, attributed the need to close the Alexandria location to “functional obsolescence induced by a consumer migration to so-called ‘big box’ home improvement centers.”

The owners also point out that they believe selling the Alexandria property will work to help sustain the business and build a solid future for the firm.

As the transition to a single location moves forward, the company says it is committed to preserving as many jobs as possible.

Fypon to Merge With Therma-Tru Doors
Fortune Brands Home & Hardware plans to integrate the operations of its Fypon brand into its Therma-Tru Doors business. The integration will result in significant cost efficiencies and sales synergies in a persistently challenging residential housing market, according to the two companies. Fypon, a supplier of urethane millwork, is based in Archbold, Ohio. Therma-Tru Doors, supplier of residential entry doors, is headquartered in Maumee, Ohio.

As a result of the merger, many of the Fypon corporate departments in Archbold will be integrated within Therma-Tru and relocate to either Maumee or Therma-Tru’s manufacturing facility in Butler, Ind. The full integration is planned to be completed by the end of the first quarter of 2010.

The Fypon brand will remain and the Archbold facility will continue to operate and the brand’s customer service team will remain in Archbold. All distribution, fabrication, quick-rail and column wrap activities will continue to operate at the Archbold facility.

Fypon will relocate the small percentage of polyurethane (PUR) production performed in Archbold to the company’s location in Yantai, China. This decision will result in approximately 30 salaried positions and 19 hourly jobs being eliminated, according to the company.

Bradco Acquires Premier Supply
Bradco Supply Corp., a national distributor of doors and windows and other exterior building materials, has acquired Denver-based Premier Supply Co. The business will retain the Premier Supply name, and Steve Neil, David Suer and Greg Gieed will remain on under the new Bradco ownership.

MI Windows and Doors to Close Salisbury, N.C. Facility
MI Windows and Doors announced in November that it would close its Salisbury, N.C., window fabrication plant. The plant has 110 employees.

“Our decision to idle the Salisbury facility has been extremely difficult,” says Stan Sullivan, president Eastern Division of MI Windows and Doors. “Anytime we affect team members and their families by eliminating jobs it comes with much anxiety. The decision is not a reflection of how our team in Salisbury has per formed but rather a strategic reallocation of our manufacturing resources.”

Hurd Opens Hong Kong Office
Hurd has announced the opening of an office in Hong Kong, which the company says can be attributed to the “brand’s successful 15-year partnership with Asia wood window and door importers.” The office provides Hurd with an Asia home base that centralizes and streamlines operations, marketing, sales and support needs.

Hurd’s Asia office opened in July.

Dominic Truniger, president of HWD Acquisition (which now owns Hurd), attributes this growth opportunity to HWD’s parent company, Longroad Asset Management LLC.

“We’ve been able to draw on our new ownership’s global expertise and ties to local Hong Kong resources to open this location as our first-ever international sales center,” he says.

Hutting Building Products Institutes Temporary Salary Reductions
In connection with its ongoing cost containment initiatives, Huttig Building Products Inc. has instituted a temporary 10-percent reduction in the annual base salaries of certain employees, including each of its executive officers, according to a report filed by the company with the Securities and Exchange Commission on September 25. The cuts became effective September 28.

The company cites “the continued prolonged decline in housing market activity and [an attempt] to mitigate the impact of seasonal decreases in construction activity, which generally adversely affect the company’s first and fourth quarters.”

Gorell Reports Record Sales in October
Gorell Windows and Doors has announced that October 2009 was its best sales month in its 15-year history. The company also reported that the three-month period from August to October was up 25 percent over the same time period in 2008.

President and chief executive officer Wayne Gorell attributed the sales record and growth to a number of factors, including improvement in the U.S. economy, the federal tax credit program, and pent-up demand for replacement doors and windows.

“Sales volume from new accounts that joined Gorell this year is already 75 percent higher than sales volume from new accounts in 2008, which itself was a record year for new accounts,” said Gorell.

DWM and Sister Publication Shelter Merge
DWM’s sister publication, Shelter magazine, which served the door and window distribution, moulding and millwork industries, has merged with DWM, beginning with this issue.

“We all know that the distribution lines in the door and window industry are becoming increasingly blurred,” says DWM publisher/editor Tara Taffera. “We’ve always said when we purchased Shelter seven years ago that when the lines blurred to the point that they were unrecognizable as separate industries that we would merge the two and that time has come.”

“We’re excited about the fact that DWM/Shelter will serve as the one-stop source for news and information regarding the entire door and window supply chain including mouldings and millwork,” adds Brian Welsh, associate publisher.
(For more information about the merger, see page 4.)

Sierra Pacific Industries and Equator Announce U.S. Forest Carbon Transaction
Sierra Pacific Industries and Equator LLC, a natural resources asset management firm, announced on September 30 that they have entered into the nation’s single largest pre-compliance forest carbon transaction to date, according to Sierra Pacific. The transaction will consist of a series of projects focused on developing compliance-ready carbon offsets registered under the recently approved Climate Action Reserve (CAR) forestry protocol Version 3.0. These offsets would be used to comply with emissions reduction goals under California’s Assembly Bill 32, a bill passed in 2006 with the goal on cutting down greenhouse gas emissions statewide.

The transaction will sequester an additional 1,500,000 tons of carbon dioxide over the next five years in excess of what would have otherwise occurred. The investment in the projects will be made through the Eco Products Fund LP (EPF)—a private equity vehicle co-managed by Equator and New Forests Inc.

Sierra Pacific chief financial officer Mark Emmerson says SPI is pleased to be able to participate in California’s carbon market with Equator.

“This project demonstrates the utility of California’s new forestry protocol, and recognizes the value of working forests in meeting the state’s climate change goals and ecosystem sustainability,” he says.

Overall, some 60,000 acres of SPI’s private timberland in California will be dedicated to this transaction. The projects will be submitted to the Climate Action Reserve for registration in the Reserve’s registry of carbon offset credits consistent with CAR’s recently approved forest protocol; Version 3.0.


Georgia Gulf Restructures Debt; Positions Royal Group for Growth
Royal Group Inc. anticipates disciplined growth across its building products divisions following the successful debt-for-equity exchange by parent Georgia Gulf Corp., according to a company press release. The new capital structure reduces Georgia Gulf’s long-term debt by $736 million, also reducing its annual interest expense by $69.7 million.

“We are immediately positioned to be a stronger competitor and to achieve strategic growth,” says Mark J. Orcutt, Georgia Gulf executive vice president – Building Products. “We are refocused on what we do best – innovating and providing the highest levels of service to our customers. Royal Group Inc. has been fortunate that even in the market’s downturn, we have introduced new products that are very well-received and that meet the needs of our customers. It’s an exciting time to move forward, expanding into new markets and growing in existing markets.”

Quanex Reports That Seasonal Demand Was Better Than Expected, But Saw Loss of $137.1 Million
Quanex Building Products Corp. has reported its fiscal fourth-quarter 2009 and full-year fiscal 2009 results for the period ending October 31. With fourth quarter net sales of $194.9 million, Quanex reported income from continuing operations of $15.3 million. The company reported seasonal demand was better than expected at its two operating segments—Engineered
Products and Aluminum Sheet Products. Also, fourth-quarter results benefitted from a better-than-anticipated aluminum spread.

For the fiscal year, the company’s net sales were $585.0 million. The loss from continuing operations was $137.1 million.

Capital expenditures were $3.3 million and $16.2 million for the quarter and year, respectively. Cash provided by operating activities was $60.5 million for the year.

Cash and equivalents totaled $123.6 million.

Edgetech I.G. Celebrates 20th Anniversary
Edgetech I.G. celebrated its 20th anniversary in December at its headquarters in Cambridge, Ohio. Among the company’s “pioneers” in attendance were Michael Glover, the founder of Edgetech; Dale Lauren Foland, founder of Lauren International; Kevin Gray, chief executive officer of Lauren International and Edgetech’s first president; and Mike Hovan, Edgetech’s current president.

Hovan opened the ceremony with a quote from Gandhi: “A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history.”

“I think the reason we are here more than anything to is to celebrate those who were that original small body of spirits,” Hovan said as he recognized and thanked many of the founding members of the Edgetech team.

Glover, an inventor and visionary behind Edgetech and the Super Spacer® product, said that in creating the product his “thinking was that as low-E coatings grabbed market share there would be a need for low-conductive spacers.”

The product was invented in 1985 and in 1989 Edgetech became a fully owned subsidiary of Lauren Manufacturing.

“Lauren was an incredible company to work for and they opened their doors to us and were incredibly supportive,” said Glover. “Dale [Foland] has a huge entrepreneurial spirit and, without any elaborate business plan or market study, accepted our ideas that warm-edge technology was a billion foot opportunity.”

Gray also recalled much of what the early days of the company were like, and attributed much of the success and growth to creative thinking.

“There have been a lot of visionaries and a lot of people thinking and coming up with great ideas over the years,” Gray said. “Now, with 20 years behind us, we have to keep our eyes focused on the future.”


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