Foundation Building Materials takes cost reduction steps
Foundation Building Materials reported that it has reduced branch operations, primarily in Pennsylvania, Michigan, parts of Northern California and Washington State in response to COVID-19 restrictions.
Most of its 175 branches in North America continue to operate, however.
The building products distributor also reported that it has pulled an additional $120 million of cash under its revolving credit facility while reducing capital expenditures that do no impact near-term business.
As of March 31, Foundation has $141 million in cash on hand and approximately $140 million of remaining borrowing capacity under its revolving credit facility.
Other moves from the Santa Ana, Calif.-based company include furloughing employees at closed branches, deferring wage increases and reducing costs. Foundation said it reduced the salaries for exempt employees, including salary reductions of some of the company’s senior management team. Foundation CEO and President Rueben Mendoza has also taken a 50% pay cut.
Compensation for independent board members has been reduced, led by voluntary annual cash retainer reductions of 50%. Additionally, all acquisition-related activity has been suspended.
Foundation said it expects to report first quarter 2020 sales of $520 million to $525 million.
“Our thoughts and prayers are with those affected by the virus and we are especially thankful to all healthcare workers for their critical efforts to support patients during this challenging time,” Mendoza said. “While our anticipated first quarter net sales reflect the resiliency of our operations and the ability of our team to navigate well during a volatile quarter, we have implemented a number of cost-saving initiatives and have reduced non-essential discretionary spending in response to the uncertainty caused by the COVID-19 disruption.”
Mendoza added that the company is “well-positioned to navigate the challenging macroeconomic environment.”
Foundation has also donated thousands of N95 masks to local hospitals in the communities it serves. The company operates branches in the United States and Canada, with a focus on distributing wallboard, suspended ceiling systems and metal framing products.
Most of its 175 branches in North America continue to operate, however.
The building products distributor also reported that it has pulled an additional $120 million of cash under its revolving credit facility while reducing capital expenditures that do no impact near-term business.
As of March 31, Foundation has $141 million in cash on hand and approximately $140 million of remaining borrowing capacity under its revolving credit facility.
Other moves from the Santa Ana, Calif.-based company include furloughing employees at closed branches, deferring wage increases and reducing costs. Foundation said it reduced the salaries for exempt employees, including salary reductions of some of the company’s senior management team. Foundation CEO and President Rueben Mendoza has also taken a 50% pay cut.Compensation for independent board members has been reduced, led by voluntary annual cash retainer reductions of 50%. Additionally, all acquisition-related activity has been suspended.
Foundation said it expects to report first quarter 2020 sales of $520 million to $525 million.
“Our thoughts and prayers are with those affected by the virus and we are especially thankful to all healthcare workers for their critical efforts to support patients during this challenging time,” Mendoza said. “While our anticipated first quarter net sales reflect the resiliency of our operations and the ability of our team to navigate well during a volatile quarter, we have implemented a number of cost-saving initiatives and have reduced non-essential discretionary spending in response to the uncertainty caused by the COVID-19 disruption.”
Mendoza added that the company is “well-positioned to navigate the challenging macroeconomic environment.”
Foundation has also donated thousands of N95 masks to local hospitals in the communities it serves. The company operates branches in the United States and Canada, with a focus on distributing wallboard, suspended ceiling systems and metal framing products.