Shelter - November/December 2009

Volume 48, Issue 5 - September/October 2009

In the News

RESEARCH

Satisfaction with Windows and Patio Doors Declines
As economic difficulties lead homeowners to curtail remodeling projects, overall satisfaction among consumers with windows and patio doors has declined in 2009, according to the J.D. Power and Associates 2009 Windows and Patio Doors Satisfaction StudySM released recently. And these economic difficulties may be the reason that consumers report spending less overall on window projects, are purchasing fewer window and patio door units and installing doors and windows themselves-more frequently than in previous years.

The study, now in its third year, measures satisfaction among consumers who purchased new windows or patio doors based on performance in seven factors (listed in order of importance): operational performance (17 percent); product quality/durability (17 percent); appearance and design features (15 percent); price (14 percent); ordering and delivery (14 percent); warranty (13 percent); and repair and replacement (10 percent).

Overall satisfaction with windows and patio doors has declined to 769 on a 1,000-point scale in 2009, down from 781 in 2008. Satisfaction has decreased in all seven factors examined in the study, with the most notable declines occurring in the warranty, product quality/durability and price factors.

Though when it comes to issues like the warranty, the importance of this, as well as product quality/durability, appearance and design features, and operational performance factors have increased from 2008. Importance of the price and ordering and delivery factors has declined substantially.

“Consumers who find it necessary to replace windows or remodel in light of these conditions are much more likely to scrutinize every aspect of their purchase and carry particularly high expectations for products” says Jim Howland, senior director in the real estate industries practice at J.D. Power and Associates.

COMPANY NEWS

Pella Voluntarily Recalls Casement Windows Due to Impact Hazard, According to CPSC Report
Pella Corp. in Pella, Iowa, has issued a voluntary safety recall for its Architect Series® and 850 Series® Casement windows, according to an August 25 notice from the Consumer Product Safety Commission (CPSC). The windows are equipped with a hinge that can break, causing the window sash to fall out. Thus far, the company has received one notification of the hinge breaking and the sash falling, though no related injuries were reported, according to the CPSC.

The windows were sold in a variety of sizes and typically are equipped with impact-resistant glass such as the company’s HurricaneShield® impact-resistant glass and were sold by distributors nationwide and Home Improvement Stores in Florida from September 2007 through April 2009.

Consumers who may have purchased the windows are to contact Pella and the windows will be repaired for free; the company has notified those with the windows by direct mail.

Pella spokesperson Kathy Krafka Harkema told Shelter magazine that the company has taken a proactive approach to this issue and that Pella felt it was important to voluntarily issue the recall.

“We take safety very seriously and that’s why we have given this issue high priority,” she says.

Weyerhaeuser Completes Sale of Commercial Business to Atlas Holdings LLC
Weyerhaeuser Co. announced on August 17 the completion of the sale of its commercial business to a wholly-owned subsidiary of Atlas Holdings LLC. Terms of the sale were not disclosed.

The transaction includes four manufacturing plants focused on the commercial construction market and 13 sales and engineering offices. The manufacturing plants are located in Chino, Calif.; Hillsboro, Ore.; Delaware, Ohio and Stayton, Ore. About 230 employees will transfer from Weyerhaeuser to Atlas as a result of the transaction.

“The people on the commercial team have invested much hard work over the years,” said Carlos Guilherme, iLevel vice president of marketing and sales. “The sale of these assets provides associates with a new owner that has the focus and long-term interest required for the commercial segment.”

ProBuild Opens New Facility
ProBuild Holdings announced the opening of its newest facility in Kalispell, Mt., bringing the number of its facilities in that state to 11. The operation is a 33 year-old, full-service lumber yard serving area contractors and remodelers.”Our newest Montana facility provides us the opportunity to best serve the growing Kalispell market,” said Doug Ossefoort, ProBuild Midwest Region President. “We are very pleased to be joining forces with a strong team of people led by Brent Hall, one of the former owners of this business.”

“Customers will enjoy the same level of product offerings and professional service they have come to expect since I started the business back in 1976,” said Hall, who will serve as general manager of the facility. “Our combined ability to expand the business and to provide a wider selection of products and services will help our Kalispell customers continue to grow.”

FINANCIAL NEWS
Builders FirstSource Receives Capital Restructuring Proposal
Builders FirstSource, Inc., based in Dallas, Texas, announced on September 1 that it had received a proposal from its two largest stockholders, JLL Partners Fund V, L.P. (“JLL”) and Warburg Pincus Private Equity IX, L.P. (“Warburg”), proposing a restructuring of the Company’s outstanding $275.0 million aggregate principal amount of second priority senior secured floating rate notes and a common stock rights offering to Builders FirstSource common stockholders.

As of August 31, 2009, JLL and Warburg owned approximately 50 percent of the outstanding shares of Builders FirstSource common stock. Builders FirstSource has been informed by JLL and Warburg that, as of August 31, 2009, they collectively beneficially owned approximately $98 million aggregate principal amount of the Notes.

The Board of Directors of Builders FirstSource has formed a Special Committee comprised of independent and disinterested directors to evaluate the proposal from JLL and Warburg. The committee will review and evaluate the proposal to determine what action, if any, is in the best interests of the Builders FirstSource stockholders, and to make a recommendation to the Board.

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, according to the Composite Panel Association (CPA).

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. Senators Klobuchar and Crapo sit on the Environment and Public Works Committee as well as the relevant subcommittee that oversees TSCA.

“This is a great day for American consumers and industry alike,” says Tom Julia, president of the CPA.
Last year after EPA was petitioned by the Sierra Club and others to develop a national regulation for formaldehyde emissions from composite wood, the agency published an Advanced Notice of Proposed Rulemaking.

“The Notice included a range of regulatory options, all of which could lead to a complex and divisive rulemaking process that would require many years to complete,” adds Julia. “We knew right away there had to be a better way and began working with other industry groups and the environmental community, as well as with regulators in California and at EPA.”

EPA also took public comments at six forums around the country, including New Orleans, where formaldehyde emissions from FEMA-issued emergency trailers were the focus. “CPA testified at all of these forums and argued forcefully for a national standard that included third party testing and certification to give assurance to both government and consumers,” says Julia. “We believe a national standard is the right thing to do, that California has provided a starting point, and that the bill now before Congress represents a rare bipartisan opportunity to serve the American public.”

The legislation does not copy the CARB rule but instead extracts its core components and writes them into TSCA, including the following:
• Applies to particleboard, medium density fiberboard (MDF) and hardwood plywood manufactured or sold in the U.S, as well as finished products containing them;

• Sets emission ceilings identical to the CARB rule;

• 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 U.S., and corresponding enforcement.