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News

November 14, 2017

Retailers Seek Ways To Stay Relevant

Only five per cent of traditional retailers believe their customers are loyal and are searching for innovative approaches to stay relevant against the threat of new competitors, says an EY survey. ‘How can retailers afford the rising price of loyalty?’ finds that new consumer standards for price and convenience are placing pressure on Canadian retailers to disrupt in order to remain competitive ahead of the busy holiday season and beyond. Ted Salter, EY Canada consumer products and retail leader, says, "Digital outlets are empowering consumers more than ever. They're expanding into new channels and setting new consumer standards for convenience, value, and experience – proving hard to match profitably and straining customer relationships with physical stores." Almost all (87 per cent) retailers believe a loyalty strategy is a critical priority with just 16 per cent saying that their traditional approach is fit for purpose. And they know that getting it wrong can be expensive; 80 per cent say a ‘one size fits all’ loyalty approach damages profitability. "Retailers need to create loyalty that sticks," says Salter. "Leveraging customer data is key to building a personalized, convenience-based approach to capture and retain customers. But research shows that too few companies are tapping into the insights available."


Dodge Momentum Index Recovers In October

The Dodge Momentum Index rose in October, climbing 13.2 per cent to 130.9 from the revised September reading of 115.6. The index is a monthly measure of the first (or initial) report for non-residential building projects in planning in the U.S., which have been shown to lead construction spending for non-residential buildings by a full year. The move higher in October nearly reversed the erosion of the past four months (including September’s 7.9 per cent decline), with October posting healthy gains in both sectors. From September to October the commercial portion of the index advanced 16.8 per cent, while the institutional portion grew 8.3 per cent. On a year-over-year basis, the index is now 6.1 per cent higher, with the commercial portion up 5.5 per cent and the institutional portion up 6.9 per cent. October’s increase supports the belief that building activity has further room to grow during this cycle. While month-to-month activity could continue to be volatile, there are enough projects in the pipeline to sustain growth into 2018.


CFIB Partners With Northbridge Insurance

The Canadian Federation of Independent Business (CFIB) has partnered with Northbridge Insurance as its exclusive commercial insurance partner for its members. Through the partnership, CFIB members have access to a small business insurance solution that includes comprehensive property and liability coverage, plus cyber risk protection. Members also receive legal expense insurance, covering up to $100,000 in legal costs, underwritten by DAS Canada. In addition, CFIB members get unlimited telephone access to Legal Assist services, which provides general legal advice for business questions ranging from product ideas to contract legalese and employment issues.


Tall Cabinets To Lead Kitchen Cabinet Demand

Kitchen cabinet demand is forecast to grow 5.9 per cent per year to $17.1 billion in 2021, says a report by the Freedonia Group. Tall kitchen cabinets will be the fastest growing as design trends and consumer preferences increasingly favour these products. Both base and wall kitchen cabinets will post strong gains going forward, with base cabinets continuing to account for the majority of kitchen cabinet demand. Tall kitchen cabinets are projected to reach a value of $3.2 billion in 2021 on annual advances of 7.7 per cent. Base cabinets are expected to see 5.2 per cent annual growth through 2021. Base cabinet demand will benefit from the continuing trend of larger kitchens. A recent uptick in the popularity of outdoor kitchens with base cabinets will also drive growth.


Wood Flooring Slows Armstrong Sales

Armstrong Flooring, Inc. had net sales of $308.5 million for the third quarter of 2017, a decrease of 1.6 per cent compared to net sales of $313.4 million in the third quarter of 2016. It says the decrease was primarily a result of a decline in net sales in the wood flooring segment. The company had a net loss of $18.7 million in the quarter, compared to net income of $9.3 million a year ago. Adjusted EBITDA was $25.5 million, a 21.4 per cent decrease over adjusted EBITDA of $32.4 million in the year-ago period. The resilient flooring segment had a 2.2 per cent increase in net sales for the quarter, while wood flooring segment sales decreased by 7.4 per cent.


Foundation Has Double Digit Sales Increase

Foundation Building Materials, Inc. had consolidated net sales of $535.4 million for the third quarter of 2017, a 28.8 per cent increase over consolidated net sales of $415.6 million in the third quarter of 2016. Base business net sales decreased 1.2 per cent year over year. Gross profit for the quarter was $154.8 million, a 37 per cent increase compared to gross profit of $113 million a year ago. Gross margin was 28.9 per cent compared to 27.2 per cent. Net income was $1.3 million compared to a net loss of $15.3 million a year ago. Adjusted EBITDA was $40.3 million. The specialty building products segment net sales increased 23.7 per cent.


November 13, 2017

Entrepreneurs Eager To Build Business

Forty-four per cent of Canadian entrepreneurs with 20 employees or more expect to acquire another company in the coming five years, says a study by BDC. ‘What do buyers look for when purchasing a business?’ shows most buyers want to buy a profitable and stable business (61 per cent) or a profitable and growing company (31 per cent), with only eight per cent looking for an unprofitable or declining firm to buy with the expectation of turning it around. The top-cited motivation of buyers is horizontal integration (acquiring a competitor), mentioned by 36 per cent of companies, followed by expanding geographic presence (27 per cent). BDC advises businesses to carefully search for the optimal acquisition target thorough due diligence while staying disciplined about how much they pay. It says to look for financing that maximizes repayment flexibility and to get outside advice if needed.


Walmart Loses Watermelon Display Case

An Alabama man has won a $7.5 million verdict in his lawsuit against the retailer after he claimed he tripped and broke his hip while buying a watermelon at a Walmart store. He says his foot became trapped in a pallet beneath the watermelons as he reached for one. Walker’s attorneys said that Walmart should have covered the pallet so it couldn’t entangle a shopper’s foot. In a court filing, the company said the display wasn’t dangerous and it believes the damages were excessive. It plans to appeal.


American Express Launches Virtual Payment

American Express Canada has launched its vPayment, a digital payment solution that replaces plastic cards with virtual account numbers, allowing businesses to pay and reconcile a wide range of corporate expenses. The solution offers the convenience of traditional card payments with added transaction level controls, improved reconciliation, and lower fraud risk. It assigns a specific-use account number to each transaction and users are able to set a payment amount, date range, and other transaction details. During expense reconciliation, a transaction is matched to its associated virtual account number. The system is suited for procurement and accounts payable departments within organizations looking to streamline payment processes. The virtual account numbers can be processed using the same point-of-sale equipment as traditional credit cards, so there is no additional technology required for suppliers already accepting American Express.


Consumers Warned To Beware Of Warranty Limitations

The Competition Bureau has issued a warning to consumers to ask questions about warranties when purchasing appliances. It says certain warranties may come with restrictive clauses that may end up costing them more than anticipated. Some warranties only cover parts or repairs to varying degrees. Some may even require that owners do business with an ‘authorized’ or ‘accredited’ supplier, which is often more expensive than a local repair shop. By not following instructions or recommendations, they risk voiding the warranty completely. The bureau suggests asking questions of the retailer or manufacturer about the warranty before making the purchase. As well, if they are misled by indications on the warranty, they should file a complaint with the Competition Bureau.


LAMCO Products To Use Fire Retardant Technology

LAMCO Forest Products Inc. of St. Felicien, QC, has entered into an agreement with UK-based Intelligent Wood Systems Ltd. (IWS) to bring the IWS-FAST holistic Fire Mitigation system to North America. The company intends to use the IWS technology with its black spruce engineered-wood products (EWPs) to provide passive fire safety. “This technology penetrates our products (LAMCO LFL and LAMFLOOR) creating a self-extinguishing passive fire resistance adding moisture resistance,” says Andres Dingman, vice-president of sales with LAMCO.


Maheu Joins LATICRETE

Spencer Maheu is North America director, product management, with LATICRETE. Previously, he led the product management, marketing, and business development teams at Osborn International, a division of Jason Industries. He has also led product development teams at Stanley Black & Decker.


Snap-on Has Rise In Sales

Snap-on Incorporated had net sales of $903.8 million for the third quarter of 2017, an increase of 8.4 per cent over net sales in the third quarter of 2016. Consolidated operating earnings were $209.1 million, or 21.3 per cent of revenues for the quarter, compared to consolidated operating earnings of $208.2 million, or 23 per cent of revenues, for the year-ago period. Net earnings were $133.4 million compared to net earnings of $131.7 million a year ago. The tools group segment sales were $392.7 million, a 1.1 per cent decrease.


Masonite Sales Climb

Masonite International Corporation had net sales of $518 million for the third quarter of 2017, a six per cent increase over net sales of $490 million in the third quarter of 2016. Net income was $29 million for the quarter, a decrease compared to net income of $32 million. North American residential net sales were $364 million, an eight per cent increase year over year.


November 10, 2017

Retail Sales Up For Canadian Tire

Canadian Tire Corporation, Limited’s consolidated retail sales increased $179.5 million, or 5.1 per cent, in the third quarter of 2017 over the same period in 2016. Excluding petroleum, consolidated retail sales were up 4.3 per cent. Consolidated same-store sales increased 3.9 per cent and Canadian Tire Retail increased 4.7 per cent year over year. Consolidated revenue was $3.3 billion in the quarter, an increase of $175.5 million, or 5.6 per cent; excluding petroleum, consolidated revenue was $2.8 billion, an increase of $127.9 million, or 4.7 per cent, over the same period a year ago. Consolidated EBITDA increased by 3.8 per cent. Net income was $176.6 million, a 0.2 per cent increase year over year.


Non-residential Construction Drives Building Permits

Building permits rose in September for the first time in three months, as strength in the non-residential sector outweighed some weakness in the residential sector, says Statistics Canada. Canadian municipalities issued $7.9 billion worth of building permits in September, up 3.8 per cent from the previous month. A 1.7 per cent decrease in the residential sector was more than offset by a 13.9 per cent increase in the non-residential sector. A high-value institutional building permit issued in Alberta was behind much of the increase. The value of residential building permits edged down $82.7 million (-1.7 per cent) to $4.8 billion in September, the third consecutive monthly decline. Ontario posted the largest decrease, mainly due to lower construction intentions for apartments. In British Columbia, the total value of residential permits increased 15.6 per cent to $1 billion, marking the third month this year that the provincial value has hit the $1 billion mark. Municipalities issued $23.4 billion in building permits in the third quarter, up one per cent from the previous quarter. However, this advance was slightly below the average quarter-to-quarter growth of 1.6 per cent since the start of 2016. The value of institutional building permits reached $2.7 billion in the quarter, while the multi-family component totaled $7.2 billion. The commercial component decreased 3.3 per cent to $4.3 billion.


Small Businesses Realize Importance Of Web Presence

Every year, more small businesses are creating a web presence, finds a survey by Clutch. Nearly half of the small businesses it surveyed in 2016 had not yet created a website. This year, only 29 per cent don’t have a website and 92 per cent say they plan to have one by the end of 2018. Of those that have a website, 79 per cent says their site is mobile-friendly. High-quality web content and increased mobility are top website priorities in 2017. The survey also shows small businesses with revenue less than $1 million a year are about 30 per cent less likely to have a website than higher-revenue companies. Clutch says websites are no longer simply a ‘recommended’ aspect of modern business because many consumers rely solely on the web to steer them toward new companies. In many ways, web searches have replaced ‘word-of-mouth’ referrals that were once the bread-and-butter of small business. More and more businesses now realize that a web presence increases market opportunities, elevates brand, provides cost efficiencies, and creates the ability to track marketing and business analytics. Today, new tools and better education have made it possible for even small business owners to track relatively complex data trends on their website.


Uniboard Launches Digital Catalogue

Uniboard has launched a digital catalogue of it decorative composite wood panel (TFL) collection to meet the growing demand of architects and designers for digital images. Called ‘Design 360,’ the high-resolution images are available in different formats and are calibrated for all types of web usage. They are also available to 3D design software such as 2020, SketchUp, Cabinet Vision, and CAD software. Uniboard worked with Arcane Technologies Inc. to create the collection.


Pfeifer Leads Canada Sales

Russel Pfeifer is director of sales for Canada with IPS Corp. He has more than 15 years of wholesale plumbing experience. His previous position was director of sales, North America, for Dahl Brothers. Kevin Barrington is IPS brand manager for G.F. Thompson; he will work with Pfeifer in a continuing effort to drive national sales strategy for IPS and G.F. Thompson brands.


Interfor Earnings Grow

Interfor Corporation had net earnings of $16.8 million in the third quarter of 2017, an increase over net earnings of $15.1 million in the third quarter of 2016. Adjusted EBITDA for the quarter was $60.5 million (or $70 million excluding the impact from $9.4 million of softwood lumber duties expense) on sales of $489.2 million versus adjusted EBITDA of $58.1 million on sales of $457.6 million in the year-ago period. Total lumber production for the quarter was 645 million board feet compared to 628 million board feet in the third quarter of 2016.


Sales Climb For ScottsMiracle-Gro

The ScottsMiracle-Gro Company had sales of $376.7 million for the fourth quarter of 2017, an eight per cent increase over sales in the fourth quarter of 2016. Sales in the U.S. consumer segment decreased seven per cent to $258.1 million, due primarily to lower sales in the mass retail channel. Operating loss in the segment was $300,000 compared with operating profit of $11.2 million a year earlier. The company-wide adjusted gross margin rate was 23.4 for the quarter, compared with 26.6 per cent a year ago. The company had a seasonal loss from continuing operations of $42.3 million, compared with a loss of $11.3 million.


November 9, 2017

October Housing Starts Trend Steady

The trend in housing starts was 216,770 units in October 2017, compared to 215,153 units in September 2017, says the Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts. CMHC says despite a decrease in September, new home construction remains very strong in 2017. New Brunswick housing starts were up 28 per cent year to date, after four years of declining construction activity. The Montréal, QC, area saw the highest level ever of residential construction for the month of October with close to 3,500 housing units started. Meanwhile, total housing starts in Toronto, ON’s census metropolitan area trended lower in October, with the most pronounced declines occurring in single-detached home and apartment starts. Housing starts has been slowing down in Calgary, AB, the last couple of months, while in Vancouver, BC, they have reached a 12-month high. The standalone monthly SAAR of housing starts for all areas in Canada was 222,771 units in October, up from 219,293 units in September. The SAAR of urban starts increased 2.5 per cent; multiple urban starts increased 12.5 per cent; and single-detached urban starts decreased 17.1 per cent.


Leadership Affected By Misalignment

Lack of corporate alignment, miscommunication, and outdated tools and technologies severely impact the morale and performance of retail store and district managers, finds a survey by Square Root. The ‘2018 State of the Store’ survey show alignment emerges as the major challenge between corporate and store. Unhappy managers reported they are 150 per cent less likely to feel aligned with their corporate team, with 20 per cent reporting they are more likely to get little feedback from their managers and 21 per cent reporting they struggle to understand key priorities. Additionally, unhappy managers were twice as likely to report that their company meetings lack focus and progress. So, it’s no surprise that store leadership perform best when they feel supported by their leaders. Square Root says that by aligning teams, improving communication, and implementing the right tools and technology — the relationship between corporate and the store can be repaired.


Knauf To Market Green Products

Knauf Insulation North America (KINA) has partnered with Sustainable Minds (SM) to launch a project builder/configurator and library function within the ‘SM Transparency Catalog.’ SM is a provider of environmental product transparency applications, data, and services to help product manufacturers design and market greener products. The partnership will allow KINA to simplify the process of researching and specifying its insulation products for buildings that meet today’s most stringent green building rating systems. KINA has listed 17 of its glass mineral wool insulation products across five CSI MasterFormat Divisions in the SM Transparency Catalog.


Foundation Acquires Del-Pro

Foundation Building Materials, Inc. (FBM), a specialty distributor of wallboard, suspended ceiling systems, and mechanical insulation, has acquired Del-Pro Building Supplies, Inc. of Whitby, ON. Del-Pro is an independent distributor of wallboard, steel framing, insulation, basement blanket, and spray foam products that was founded in 2012. FBM says the transaction strengthens its wallboard market share in Canada and adds locations which complement its core product offerings. Del-Pro’s senior management will continue with FBM to ensure a smooth transaction and quick integration.


Pappas Appointed CMO

Milton Pappas is chief marketing officer for HBC and will be responsible for the North American retail business. He joined the company in 2016 as senior vice-president, digital marketing.


Huttig Has Flat Second Quarter

Huttig Building Products, Inc. had net sales of $198.7 million for the second quarter of 2017, an increase of less than one per cent over net sales of $197.9 million for the second quarter of 2016. Millwork sales increased four per cent to $100.4 million for the quarter and building products sales decreased one per cent to $79.9 million. Wood product sales decreased 12 per cent to $18.4 million. Gross margin was $42.2 million in the second quarter for both 2017 and 2016. As a percentage of sales, gross margin was 21.2 per cent in 2017, compared to 21.3 per cent in 2016. Income from continuing operations was $2.3 million compared to income of $5.9 million in the second quarter of 2016.


Americas Push Growth For Armstrong

Armstrong World Industries had sales of $351.9 million for the third quarter of 2017, an increase of 5.1 per cent over sales of $334.9 million in the third quarter of 2016. Operating income was down 2.8 per cent to $69 million for the quarter. Adjusted EBITDA was $107 million, up 12 per cent year over year. Earnings from continuing operations were $43.5 million, down 22.2 per cent compared to earnings from continuing operations of $55.9 million a year ago.


November 8, 2017

Montréal Has Strong Residential Sales

A total of 3,270 residential sales were concluded in the Montréal Census Metropolitan Area (CMA) in October, says the Greater Montréal Real Estate Board (GMREB). This is a seven per cent increase compared to October of last year. This was the most active month of October in eight years. All five main areas of the Montréal CMA contributed to the increase. The Island of Montréal and Vaudreuil-Soulanges shared the lead, as sales in both these areas grew by 11 per cent compared to October of last year. Laval, the North Shore, and the South Shore also held their ground with respective sales increases of five per cent, four per cent, and two per cent. Condominiums had the largest share of property type, with a 13 per cent sales increase across the CMA. This was the sixth consecutive month that condominium sales growth exceeded 10 per cent. Sales of plexes (two to five dwellings) also fared well, with a nine per cent rise in transactions. Sales of single-family homes grew by three per cent. For the month, the number of active listings (25,314) was down 12 per cent compared to October of last year.


Canadians Not Prepared To Age At Home

Canadians want to age in place, but many aren’t preparing to do so, says a study by HomeStars and the Canadian Association for Retired Persons (CARP). Most Canadians (72 per cent) say they want to ‘age in place’ (age at home) because of the convenient location of their home, with 66 per cent saying the reason is because they love their home. Yet, 37 per cent of people have not seriously considered home renovations to make is easier to age in place. As well, more than half of survey respondents say they were unaware of tax benefits or grants to help subsidize aging-related renovations. The organizations say this topic is more important than ever because for the first time in the country’s history, seniors (65+) outnumber children (14 and under); the number of seniors has increased 20 per cent since 2011. In addition, this increase is significant among the country’s oldest Canadians, with 19.4 per cent growth for those over 85 and 41.3 per cent growth for those over 100 years of age. “While undergoing a renovation can seem daunting, in the long run, it can be more cost-effective than moving into a retirement facility if you are still able to care for yourself; even if you need some help around the house," says Anthony Quinn, director of community affairs at CARP.


Bostik Acquires XL Brands

Bostik plans to acquire XL Brands, a manufacturer of adhesives for resilient and soft floor coverings in the United States. Bostik says the acquisition will allow it to offer comprehensive solutions in this growing high added value market. XL has a new production facility in Georgia and produces products that are complementary to Bostik’s product range in the U.S. The transaction is expected to close by the end of the year.


Griffon Acquires Harper Brush Works

Griffon Corporation’s subsidiary, The AMES Companies, Inc., has acquired Harper Brush Works, a division of Horizon Global. Harper is a manufacturer of cleaning products for professional, home, and industrial use. The acquisition will broaden AMES’ long-handle tool offering in North America to include brooms, brushes, and other cleaning tools and accessories.


Boise Cascade Promotes Two

Mike Brown and Nate Jorgensen are senior vice-presidents in the wood products division with Boise Cascade Company. Brown has been with the company for 18 years, most recently as leader of manufacturing operations. Jorgensen has 26 years of experience and joined Boise Cascade in 2015 and was, most recently, leader of the engineered wood products sales and marketing organization.


LP Sales Up 20 Per Cent

Louisiana-Pacific Corporation had sales of $718 million for the third quarter of 2017, an increase of 20 per cent compared to sales of $596 million in the third quarter of 2016. Income from continuing operations was $111 million for the quarter compared to $66 million a year ago. Adjusted EBITDA from continuing operations was $192 million compared to $111 million. The siding segment had net sales of $226 million for the quarter, versus net sales of $195 million a year ago. The oriented strand board (OSB) segment had net sales of $351 million, an increase over net sales of $282 million last year. The engineered wood products (EWP) segment had net sales of $98 million, up 22 per cent over the prior-year period.


New Zealand Timber Drives Rayonier Sales

Rayonier Inc. had net income of $24.7 million for the third quarter of 2017, a decrease compared to net income of $39.4 million for the third quarter of 2016. Revenues for the quarter were $177.9 million versus revenue of $171.4 million a year ago. Third quarter operating income was $39.3 million versus $49.7 million in the prior-year period. Southern timber sales increased 15 per cent year over year, while Pacific northwest timber sales increased 16 per cent and New Zealand timber sales increased 66 per cent.


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