Lumber Industry News Express

Vol. 5, No. 11 – May 22, 2006

SECOND ANNUAL SAFETY AWARDS NOW OPEN

NLBMDA invites all dealers to apply for the second annual national safety awards. Two types of awards recognize dealers for their safety records and achievements during the past year. Please contact MLA to obtain applications.

The National Achievement in Safety Award will be given to all dealer applicants that meet a high standard of safety based on specific criteria. Winners will receive a recognition certificate, acknowledgement in national industry publications and customized press releases to announce their achievements to local media.

The National Industry Leader in Safety Award will be presented to two dealers at the annual Industry Summit: One with fewer than 50 employees and one with more than 50 employees. Winners will be selected by an awards committee based on specific safety criteria and how well the company demonstrates their outstanding leadership and commitment to safety by “going above and beyond” basic safety practices. Winners will also be profiled in ProSales magazine and receive customized press releases for use with local media.

Eligibility for both awards is on a per location basis to allow individual lumberyards to be recognized for their excellence in safety. The deadline for applications is June 30, 2006.

the home depot to acquire enerbank USA

ATLANTA, May 9, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- The Home Depot®, the world's largest home improvement retailer, today announced a definitive agreement to acquire EnerBank USA from CMS Energy.

EnerBank USA, a wholly owned subsidiary of CMS Energy, provides home improvement loans, which remodeling and trade contractors can offer their customers. It provides loans for a wide variety of home improvement projects, including window and door replacements, heating and air conditioning upgrades, kitchen and bath remodeling, roofing, painting and landscaping work.

“This acquisition is another part of our strategy to expand our business and relationships with professional customers,” said Frank Blake, EVP, Business Development and Corporate Operations for The Home Depot. “EnerBank has a unique way of helping home improvement contractors grow their business, especially the smaller contractors who frequent our retail stores. Enerbank’s focus on offering loans via contractor referrals complements our existing credit offerings and partnerships.”

When contractors want to close a home improvement deal with a potential client, they tell the client to phone EnerBank. Typically within minutes, EnerBank lets the contractor’s customers know if they will be approved for a loan. The loan actually starts when the homeowner is satisfied that the job is complete and endorses an EnerBank check to the contractor. Interacting with customers only over the phone, EnerBank operates no branches.

“This acquisition gives us the opportunity to offer our services to The Home Depot’s large contractor customer base,” said Louise Kelly, CEO of EnerBank. “This growth opportunity and the resources of The Home Depot will also strengthen the high level of service we offer to our existing contractors and program sponsors.”

EnerBank’s business focus to provide home improvement loans through professional contractors will remain the same after the planned acquisition. In addition, EnerBank will continue to be run by its current leadership. EnerBank is an industrial bank chartered in the state of Utah. At the end of fiscal 2005, EnerBank employed 37 associates and had net loan assets of $76 million.

Terms of the agreement were not disclosed. The transaction is subject to regulatory approvals.

IN THE SPOTLIGHT

The Greater Kansas City Chamber of Commerce has honored MLA Member Schutte Lumber Co., Kansas City, Mo., as an outstanding small business for 2006. Sincerest congratulations to Daniel Fuhrman, Chairman/President, Michael Fuhrman, Vice President, and the entire staff of Schutte Lumber Co. on this achievement.

NLBMDA Teleconference: Safety for Installed Sales Framing Packages

Thursday, May 25, 2006 1:00pm Eastern Daylight Savings Time

Sign up today for the last teleconference of the spring, before we resume in September. In this important teleconference we will look at the safety issues surrounding installed sales framing packages. How can you avoid major fines, and how do OSHA and safety liabilities affect your bottom line? What are OSHA responsibilities for employees and subcontractors at multi-employee worksites? Other subjects include PPE for installed sales crews, fall protection for the installed sales employee and subcontractor, and jobsite supervision and oversight by management.

This presentation will be led by Ron Koons, an expert on OSHA requirements, and will give you plenty of opportunity to have your questions answered. Don’t miss out.

Sign up today! To register, go to www.dealer.org. You will receive handouts and call-in information via email prior to the call.

KANSAS GOLF!

Before your calendar fills up, block this date and plan to participate in the next MLA golf event. Everyone is welcome, regardless of ability. The only requirement is that you come out and have fun. Here’s the date and location:

Kansas – Sunflower Shoot-out – The 17^th annual event is being held at a new location, Tex Consolver Golf Course, Wichita, Kan. on June 9.

This event is open to all dealers and sponsoring associates. For more information, contact Art Brown at MLA, 800-747-6529. We hope to see you there.

Deadline Extended for NLBMDA’s Cost of Doing Business Survey

Submit your company’s data by MAY 30, 2006 to be included in the industry’s ONLY benchmarking tool that accurately tracks lumber and building material dealers’ profitability.

To begin the survey, simply go to the NLBMDA website: www.dealer.org

· You have the option to complete an easy step-by-step Excel worksheet OR print out the forms to return via mail. If you need any assistance, email Anna Gilbert at anna@dealer.org or call 800-634-8645.

Don’t miss your chance to be part of this invaluable resource. All participants will receive an individualized forecasting tool and a free copy of the complete 2006 Cost of Doing Business Report!

LUMBER NEWS – QUICK GLIMPSES

Bernanke’s Testimony On The Federal Interest Rate Draws Strong Response… Amid the rapid growth of high energy prices and economic progress, Federal Reserve Chairman Ben S. Bernanke testified before Congress that he and his central banking colleagues may pause in the process of raising interest rates in an effort to restrain inflation. However, this is not a sign that the Fed is finished raising the interest rate. These remarks from Bernanke have caused great commotion among analysts: there are those recommending Bernanke capitalize on a strong economy and not abstain from combating inflation overtures, while others have cited Bernanke’s patience, preservation of his options and clarity to the media as a welcomed quality – as opposed to Alan Greenspan.

Bernanke has faced strong urges from both Democrats and Republicans to stop raising the interest rate. The Bush administration has been working hard to convince disgruntled voters that the economy is strong, despite rising gasoline prices. Bernanke commented that the near-term economy looks to be strong, but strongly hinted the Fed may need to raise interest rates to 5 percent in the near future. The main reason for the temporary pause is the need for the Fed to collect more information, especially concerning the housing sector. There are concerns from the Fed that the housing market may slide sharper than expected. This prospect, coupled with the possibility of raising the interest rate once more, could push the Fed to set the interest rate at 5.5 percent toward the end of the summer.

Source: Matthew J. Sciannella for NACM; Source: The Washington Post, May 9, 2006

Housing Market Taking a Breather But Staying Strong, Says NAR… U.S. Newswire/ -- The housing market is settling but should experience its third best year in 2006, with job creation and a growing economy offsetting some of the effects of rising interest rates, according to the National Association of Realtors®.

Existing-home sales are likely to fall 6.4 percent to 6.62 million in 2006 from a record 7.08 million last year. New-home sales are projected to drop 11.6 percent to 1.13 million from last year’s record of 1.28 million. Housing starts should decline 5.4 percent to 1.99 million this year compared with 2.07 million in 2005.

Source: Builder On-Line Business Update, May 9, 2006

New Wrinkle in Softwood Lumber Deal… Canfor, Tembec and Terminal Forest Products all have lumber litigation in U.S. courts right now. If these three companies do not separately agree to drop their cases, the new softwood lumber deal cannot be made, according to a new report.

“Each company will have to decide whether they want to give that right away as part of the settlement,” said Dottori, co-chairman of the Canadian lobby group Free Trade Lumber Council. “My view is that they don't have to. But it’s up to the CEOs of each of those companies to decide.”

“These three companies do indeed have some sort of veto, because if they don't agree, then the litigation continues, no matter what the government thinks about it,” said Carl Grenier.

Source: LBM Daily, May 11, 2006

News from Washington… Despite intense efforts by Senators Mike Enzi (R-WY) and Olympia Snowe (R-ME) this week to modify Small Business Health Plan legislation (S.1955) enough to garner Democratic support, Senate Democrats did not allow us to proceed to votes on the bill because they were denied the opportunity to offer 300+ amendments on issues ranging from stem cell research to Medicare. Ironically, voting against cloture also denied them the opportunity to vote on the Democratic substitute to S.1955! The cloture vote failed last night by a vote of 55-43. Democrats Ben Nelson (NE) and Mary Landrieu (LA) were the only Democrats to support S.1955, while Republican Lincoln Chafee (RI) was the sole Republican defector. While this outcome is frustrating to those who have pushed for small business health plans for the past 10 years, it is the first vote taken in the Senate and a clear majority came out in support. It is possible that a simple majority vote could be enough to pass this legislation in a non-election year. Thanks to all of you for your help. Dealers can check www.buildthevote.org to see how their Senators voted and send thank you/no thanks messages.

Source: Colleen Levine, NLBMDA, May 12, 2006

The Home Depot Announces First Quarter 2006 Results… The Home Depot®, the world’s largest home improvement retailer, today reported first quarter net earnings of $1.5 billion, or 70 cents per diluted share, compared to 57 cents per diluted share and net earnings of $1.2 billion reported for the same period in fiscal 2005. This resulted in a 22.8 percent increase in earnings per diluted share over the first quarter of fiscal 2005.

Sales for the first quarter of fiscal 2006 totaled $21.5 billion, a 13.1 percent increase from the first quarter of fiscal 2005.

During the first quarter, the Company acquired Hughes Supply. The transaction more than doubled the size of Home Depot Supply, which now has more than 20,000 associates operating in more than 900 locations nationwide and in Canada with projected fiscal 2006 sales approaching $12 billion. The results of Hughes Supply are included in the Company’s consolidated results beginning March 30, 2006, the date of acquisition.

American Chestnut Trees, Thought to Be Extinct, Found in Georgia… American chestnut trees were thought to have been eradicated due to a blight at the turn of the twentieth century, but some have survived after all.

The discovery is exciting to scientists, who may be able to use the trees’ pollen to breed anew the species, only this time better than before.

Source: LBM Daily, May 19, 2006

Federated Insurance Improving Competitiveness… Federated has taken very significant rate decreases in Kansas and Missouri in building and material dealers on property and casualty effective May 1, 2006. This will really show up on new business quotes. There is no better time to take a quote than right now. If your insurance renews anytime in the next six months, now would be a good time to contact a Federated marketing representative or your Association office.

Death Tax… The Senate will debate estate tax legislation sometime in June. NLBMDA’s government affairs committee voted last week to endorse a compromise proposal by Senator Jon Kyl (R-AZ), which would raise the exemption level to $5 or 10 million, indexed to inflation, and set the highest overall tax rate equal to the capital gains rate, currently 15 percent. The committee felt that this outcome would benefit a majority of dealers and is the best NLBMDA can hope for in the current political climate. Staff will work with Senator Kyl to seek Democratic support for this compromise and will send action alerts and updates to members as a vote approaches.

Source: NLBMDA – BMAE Update, May 2006

Team Approach Helps Injured Workers

For several years, the litany for controlling workers compensation costs has remained essentially the same: provide a safe workplace, designate a company-recommended physician, report injuries promptly, keep in touch with injured workers and help them return to work as soon as possible.

While this advice hasn’t changed, Federated has refined some methods to help in these efforts.

Our special claims management teams now manage injuries that require time away from work. An experienced team of claims processors and a specialized registered nurse work with the injured employee, the medical providers and employers throughout treatment and recovery. The team focuses on the employee to help assure effective and efficient use of medical resources, and assists the employee during recovery and return to work. This helps avoid duplication or unnecessary services and reduces stress for the employee. The team also helps you arrange the employee’s return to work and accommodate any medical restrictions.

Reporting claims promptly is still the foremost step to help control the cost of a workers’ compensation claim. Studies show that lost time costs are cut in half when the injury is reported within seven days. However, we urge you to report them within 24 hours.

Designate or recommend a preferred physician who is familiar with your business and its types of injuries. Selecting a physician in a “preferred provider network” that negotiates fees with Federated further reduces costs. If communicated properly, employees are usually willing to use recommended physicians.

These are just a few of many methods available to help manage the complex issues of workers’ compensation, and we continue to work toward more solutions.

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.

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