MLA LINE

Vol. 4, No. 9 – April 25, 2005

 Do we have your correct address? 

The MLA Staff will soon begin compiling information for the 2005 Buyer’s Guide and Dealer Directory. If any of your contact information has changed, please let us know before April 30 so the directory is as current as possible. New information (contact, company address, phone number or fax number) needs to be faxed to 816-561-1249. 

It’s also time for Associate members to place their advertising and make arrangements for product and representative listings. Thanks for supporting the MLA Directory! 

Nova Network Bankcard Processing

 There’s no guaranteed path to a successful business. But there are successful strategies. One key strategy is how you process payments. After all, small and mid-sized businesses need the same range of payment options as large market corporations; they just don’t need the costly infrastructure. Whether you want to affordably accept credit cards, reduce check fraud, or expand into e-commerce, MLA and the NOVA Network can provide you with the electronic processing solutions that fit your business’ goals: leaving you with time to focus on your valued customers. 

Would you like to accept checks as easily as credit cards?  Electronic Check Service from the NOVA Network converts paper checks at the point-of-sale into safe and efficient electronic transactions. By submitting checks through the same system that you use to process credit cards, you can lower your costs, save time, reduce check risk and expand your sales opportunities. Electronic Check Service is the smarter way to accept checks!

 Increase traffic and drive revenue with a gift card program from the NOVA Network.  Your most loyal customers can use gift cards to introduce their family and friends to your business.  This expands your customer base and increases your profits. The cards are also customizable with your logo or name, which keeps your business in your customer’s minds.

 Delays cost more than time; they cost money. That is why the NOVA products are supported by 24 hour-a-day/7 day-a-week Customer Service, Terminal Help Desk and training teams. They go the extra mile to guarantee exceptional service, complete accuracy and rapid response so you can get back to running your business.  Plus the NOVA Network is rated by MasterCard^® as the most reliable payment processing network in the industry.   

Call NOVA at 800-546-1831 to begin the development of your new customized payment processing solution today.  Refer to promotional code 82012.  MLA is proud to partner with NOVA Network to bring you money-saving solutions.

  Fax Bill Passes Senate Commerce Committee

 The Senate Commerce Committee passed S. 714, the “Junk Fax Prevention Act of 2005,” by a voice vote last week. The bill overturns the Federal Communications Commission’s (FCC) proposed new regulations governing facsimile communications, and would instead codify into law the “established business relationship” (EBR) exception to sending commercial faxes. The bill would also implement a mandatory opt-out requirement.

 The bill, introduced on April 5 by Sen. Gordon Smith (R-OR), was also originally co-sponsored by Senate Commerce Committee Chairman Stevens (R-AK), Ranking Member Inouye (D-HI), and Senators Sununu (R-NH), Burns (R-MT), Snowe (R-ME), Dorgan (D-ND) and Lautenberg (D-NJ).   

The bill passed with two minor amendments: One that requires the opt-out be available to recipients 24-hours-a-day, seven-days-a-week; and another that changes the time – from 18 months to three months – for the FCC to study whether a time limit on the EBR is necessary. 

 Experts anticipate the House to introduce companion legislation to S. 714 soon.

 Source: ASAE Weekly Bulletin, published by the American Society of Association Executives, April 19, 2005 

Nation’s Building Material Dealers Seek Affordable Health Coverage

NLBMDA Urges Senate to Pass Association Health Plan Legislation

 [Washington, DC]— The National Lumber and Building Material Dealers Association (NLBMDA) provided testimony to the Senate Committee on Small Business and Entrepreneurship today regarding affordable health care for small businesses.  NLBMDA believes that an alternative to today’s costly health care system must be found to ensure the success of America’s small businesses, including the many small businesses in the lumber and building material industry.    

 The challenge of providing health care coverage, as costs continue to drastically increase, is a significant factor in the building material industry.  A typical small dealer has an average profit margin of less than three percent.  “Expenditures on health insurance are the single highest operating expense behind salaries and payroll taxes and have increased as a percentage of operating costs each of the past five years,” stated NLBMDA President Shawn Conrad.  “A company operating at such low profit margins acutely feels even a modest increase in the costs of health insurance,” he continued. 

Establishing an Association Health Plan would provide small businesses the option of banding together to purchase health care coverage through their trade association, giving small businesses access to the quality of coverage currently available to large corporations and labor unions. 

 NLBMDA’s comment to the committee outlined the importance of Association Health Plans to both the building material industry and small business owners as a whole.  Many owners face difficulties recruiting and retaining quality employees because of the benefits they provide.  The increasing cost of health coverage has a direct effect on a business’ profitability and long-term growth as well as the economic stability of the United States.   

NLBMDA is encouraged by the recent attention the Senate has given to this legislation that will increase the viability of its members and other small businesses.  In addition to the Small Business Committee hearing, the Senate Health, Education, Labor and Pensions Committee will conduct a hearing tomorrow on Association Health Plan legislation.  NLBMDA commends Chairpersons Olympia Snowe (R-ME) and Mike Enzi (R-WY) for their strong leadership in ensuring that the Senate move forward to implement solutions for small business owners and their employees.

 Source: NLBMDA, April 20, 2005

 GOLF TOURNAMENTS JUST AROUND THE CORNER

 Time is running out to save your place in the MLA spring golf tournaments. Here are the details:

 Missouri “Swing into Spring” – Osage National Golf Course, Lake Ozark, Mo. – May 6, 2005 – The Missouri Lumber Dealers Activity Committee (MLDAC) has planned their popular golf tournament in conjunction with the Master Angler Bass Tournament on May 5. The headquarter hotel will be the Port Arrowhead Resort (formerly the Holiday Inn Sun Spree Resort). Just a few spots are left, so if interested please call today!

 Kansas Sunflower Shootout XVII – Rolling Meadows Golf Course, Junction City, Kan. – June 10, 2005 – The Kansas Social Activities Committee has selected the Rolling Meadows Golf Course for their annual tournament. The headquarter hotel is the new Marriott Courtyard Inn, also in Junction City.

 If you need additional information on sponsorship or registration, contact MLA at 800-747-6529.

 nlbmda teleconference

 Plan now to participate in the next NLBMDA “Training without Travel” Teleconference, “Reducing OSHA and Safety Liabilities for Installed Sales” on May 12 at 1 p.m. EDST.

Learn the answers to these questions and more: 

·         What new OSHA rules do you need to comply with when implementing various installed sales programs?

·         What are your potential liabilities?

·         Does subcontracting eliminate your OSHA responsibilities?

·         What is a multi-employer worksite and what does it mean for you?

 Find a complete list of upcoming teleconferences and downloadable registration forms at  http://www.dealer.org/html/education.html.  

The dates for the following teleconferences have been set with registration forms to follow:

June 9, 2005 - Personal Protective Equipment Requirements
July 14, 2005 - HazCom: Are you in compliance?

 If you have questions, please contact T.J. Cantwell at NLBMDA, 800-634-8645.
 

Cost of Doing Business Survey

 NLBMDA is preparing the annual "Cost of Doing Business" survey (CODB) for the industry. The survey includes dealers of all sizes. Unquestionably, the results provide great insight into your company and how it compares with other dealers.

This year, NLBMDA plans several exciting changes to the CODB. The scope of the survey has expanded beyond measuring just sales by customer type, product type, and transaction payment method. The new CODB will perform a gross margin analysis for each of the sales classifications, productivity analysis on fleets, and seasonality information. Survey participants receive this report as well as a customized report highlighting their results as compared to others in their region and overall industry. As a bonus, each participant will be provided with an excel spreadsheet that models their company's past performance and allows for cash flow and operating profit projections by entering a few key assumptions.

To download the survey and receive this important business tool go to http://www.dealer.org or contact Cortney Riese at cortney@dealer.org for more information. While we have attempted to make the survey information straightforward and self-explanatory, please feel free to contact us if you have any questions about the survey or how to complete it.  For questions regarding the survey, please contact Steve Davis at MGT Strategies:

 By phone:            (864) 322-8874 or

By email:            info@mgtstrategies.com

 Your cost for participating in the survey is $150; make checks payable to NLBMDA. In addition to the benchmark of your performance vs. the other people who submit to the CODB, you will also be provided with a forecasting tool. The tool will be an interactive Excel spreadsheet that will allow you to run forecasted financial statements and cash flow analysis based on your past year’s performance and projections for some key variables such as project sales change, gross margin, AR days, inventory turns, salary and other expense changes. You will also receive a copy of the industry report free of charge for participating.  All information is completely confidential and will not be shared with anyone.  

Completed forms should be mailed or faxed by May 31, 2005 to:

             MGT Strategies

            PO Box 4008

            Greenville, SC 29608

            Fax: 815-550-8512 

Another useful tool – Strategic Analysis Program: For anyone looking for an additional financial tool, MGT Strategies has developed a tool that is easy to use and provides quarterly updates to trends and benchmarking data. Trend analysis reports are provided within 10 business days from data submission and benchmarks are provided within 45 days of every quarter end.  Contact the people at MGT Strategies by phone or email, and they will provide you with more information on how you can participate in this valuable program.

 Thank you for participating in the survey and we encourage you to solicit other dealers to participate so the survey can be even more meaningful to everyone.

 INVESTING IN SAFETY CAN BRING YOUR COMPANY FAME 

NLBMDA wants to recognize dealers for the time and money they consistently invest in keeping their workers and workplaces safe! The first annual NLBMDA Safety Awards are now open for applicants. Make sure that your boss, board, employees, customers and community know that you are leading the industry in safety. 

The application process is simple and award recipients will be recognized locally and nationally with awards and customized press releases to announce your company’s accomplishments. Take 15 minutes out of your day to fill out an application and reward yourself and other employees for the hard work that went into making your lumberyard safe.

Get more information and your questions answered during a free 15-minute teleconference on April 27. Applications are due by May 31, 2005. Go to www.dealer.org or call 800-634-8645 for applications and teleconference details!

 LUMBER NEWS – QUICK GLIMPSES

 U.S.-Canada Lumber Talks Stalled… A meeting between Canadian and U.S. forestry executives planned for next week to discuss renewed softwood lumber trade talks has been postponed indefinitely. A spokesperson for the Canadian lumber industry said Thursday the meeting, slated for next Tuesday in Calgary, is being put off to give both sides more time to do their “homework.”

 Canadian and U.S. lumber CEOs met in Chicago earlier this month to discuss a Canadian government outline for renewing negotiations to end the longstanding softwood dispute. The Canadian proposal features a temporary export tax in exchange for lifting the U.S. duties. Canadian lumber-producing provinces would undertake to make their forestry policies more market-oriented, which would lead to a lifting of the border tax. Ottawa is also proposing an independent dispute-resolution process and demanding the return of all the duties collected so far.

 Source: LBM Daily, April 15, 2005

 Canadian Government Aids Softwood Lumber Industry Groups… Last week, the Canadian Government announced $20 million in aid to softwood lumber industry groups.  

“Canada's softwood lumber industry has faced unprecedented U.S. trade action, and we stand behind our industry,” said Canadian International Trade Minister Jim Peterson in a release Friday. “This assistance will help softwood lumber associations as Canada pursues a durable resolution to the disputes.”

 The aid is to help the groups pay for legal costs incurred during the softwood lumber dispute with the U.S.

 Source: LBM Daily, April 18, 2005

 Canada Ready for Retaliation on Softwood Lumber Dispute… Canadian Prime Minister Paul Martin announced Monday that Canada, acting in unison with the EU, is prepared to increase sanctions on a range of U.S. goods unless Washington repeals a subsidy program known as the Byrd Amendment.

 The WTO allowed Canadian sanctions worth up to 72 percent of the money paid to U.S. firms under the amendment. Over $3 billion in cash deposits has been paid by Canadian softwood lumber manufacturers to date.

 Source: LBM Daily, April 19, 2005

 NLBMDA Talks Solutions with Lead U.S. Softwood Negotiator… NLBMDA Treasurer Royal Morse, President, Dealers Lumber Co., Columbus, Ohio, flew to Washington, D.C., last week to join NLBMDA President Shawn Conrad, Lobbyist Colleen Rocha Levine and fellow members of the American Consumers for Affordable Housing (ACAH) for a meeting with the new U.S. softwood negotiator, James Mendenhall, acting general counsel in the U.S. Trade Representative office. Mendenhall shared our frustration at the inability to achieve free trade in softwood lumber with Canada, but expressed his belief that only a negotiated settlement would prevent another case from being brought if Canada wins this round as expected.

 In response to Mendenhall's request for suggestions for a working settlement, Morse outlined the “degrees of evil” posed by a quota, a fluctuating tariff and a flat tariff. Morse explained that a fluctuating tariff, as has been requested by the U.S. producers, would introduce nearly as much volatility into the market as a quota. While NLBMDA still believes the legal cases must be allowed to run their course before any settlement is agreed to, we were pleased to have the opportunity to express our concerns to Mr. Mendenhall at this early stage of the negotiations. A bilateral government and producers meeting, scheduled for April 19, has been postponed. With elections in British Columbia in mid-May, there is a limited window of opportunity for negotiations to advance.

 Source: NLBMDA News, April 2005

 Key NLBMDA Victories on Death Tax Repeal, Bankruptcy Reform… In observance of Tax Day, the House last week passed the "Death Tax Repeal Permanency Act" (H.R. 8) by a vote of 272-162, with 42 Democratic members voting in support. As in the past, the real challenge for making death tax repeal permanent is the Senate, where Sen. Chuck Schumer (D-NY) has been appointed the lead Democrat to discuss a possible compromise with Senate Finance Committee Chair Jon Kyl (R-AZ), who has introduced a full repeal bill (S. 420). It is possible that several Democrats would support merely increasing the exemption, but the question remains what exemption level would be high enough to allow small businesses to do without estate lawyers. Although the small business exemption option may sound appealing, it has been tried before and it is too difficult from a technical standpoint to craft language that covers the diverse spectrum of family-owned businesses. In the past, this family business exemption was rarely used because of its complexity. While we will monitor proposed compromises, NLBMDA continues to assert that the best and only effective way to solve this heavy burden is to repeal the death tax in its entirety.

Thursday, the House voted to pass the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” (S. 256) by a bipartisan margin of 302-126. President Bush signed the bill into law Wednesday, April 20, 2005.

You can find out how your Representative voted on these two key NLBMDA votes, find contact information to thank those who voted yes, and view instructions for urging your Senators to support full death tax repeal at www.dealer.org/html/dealerinvolvement.htm.

 Source: NLBMDA News, April 2005

 March Housing Starts Drop a Sharp 17.6 Percent; Biggest Drop Since 1991… Housing starts dropped 17.6 percent in March, marking their steepest drop in more than 14 years, as groundbreaking for both single-family and multi-family homes tumbled, a Commerce Department report showed on Tuesday.

 Permits for future groundbreaking, an indicator of builder confidence, fell more than expected as well, dropping 4.0 percent to a 2.023 million unit pace. Analysts had forecast permits to dip 0.3 percent to a 2.10 million unit pace from a revised 2.107 million unit rate the previous month.

 Housing starts fell 29.3 percent in the Midwest, 18.0 percent in the South, 12.7 percent in the West and 3.6 percent in the Northeast, the Commerce Department said.

 Source: LBM Daily, April 20, 2005

 Congress Letter to Bush Calls for End of Softwood Tariff… More than 45 bipartisan members of the U.S. House of Representatives sent a letter to President Bush urging an end to the U.S.-Canadian softwood lumber dispute. The letter called for an end to the duties, a refund with interest, and “prompt compliance with panel rulings,” referring to the WTO and NAFTA rulings.

 Both the American Consumers for Affordable Homes and the National Association of Home Builders issued press releases supporting the letter. Susan Petniunas, spokesperson for the ACAH, criticized the Administration for “turning a deaf ear on consumers...in favor of lumber companies.”

 Source: LBM Daily, April 21, 2005

 

 

Are you self-insuring due to coinsurance?

 Inventory values normally vary. Seasonal fluctuations can be substantial. Construction costs change from month to month. Steel and lumber have increased substantially in the last year. Insurance limits you chose when your policy was purchased may not be adequate now or in a few months.

 Since most property losses are partial ones, some business owners might be tempted to select limits lower than the full value of the property. A $400,000 building, for example, is more likely to have a $100,000 loss than be destroyed.

 Knowing this, insurance companies offer reduced rates if the property owner agrees to insure the property to a specific percentage (commonly 80 percent) of the full value. The higher the percentage, the lower the rate. This is the “coinsurance agreement” found in most property insurance policies. However, it comes with a penalty. It is important to be aware of this penalty to avoid “self-insuring” part of a loss. 

The amount of the penalty, applied at the time of claims settlement, depends on how the limit purchased compares to the limit that should have been purchased, based on the coinsurance agreement.  For example, if at the time of a loss, the limit of the policy were only 90 percent of the value that should have been purchased, the insurance company would pay only 90 percent of the loss. The business would, in effect, “self-insure” the other 10 percent.

Some ways to protect your business from a coinsurance penalty:

·         Review your property values and limits of insurance often, and advise your insurance company promptly if an adjustment is needed.

·         Be aware of the effects of inflation on your business and on your property. A building constructed 10 years ago for $400,000 would cost approximately $518,000 to rebuild today according to national replacement cost averages. If your insurance limit has not been adjusted, your coinsurance penalty could be 20 percent or more of your loss.

·         Widespread, catastrophic loss such as the Florida hurricanes can raise repair costs beyond normal limits, often leaving property owners underinsured.

 The best way to prevent a coinsurance penalty is to insure with a company that waives its right to assess this penalty. Federated Insurance, your association recommended carrier, waives the co-insurance penalty in its Lumber-Pac® program for lumber and building materials dealers.  Federated will assist you in establishing correct building and contents values, which will help you avoid coinsurance penalties at the time of a loss.

 Contact your Federated marketing representative for more information.

                                       MLA is proud to endorse….