National Lumber Looking For New Financing

A merger may be in the llture of National Lumber and Supply Inc., Fountain Valley, (1a., with the chain hiring Los Angeles investment banker Wedbush Morgan Securities to find additional sources of financing.

The additional source, according to National Lumber president Melvin C. Jaffee, could be additional lenders, a merger or another investor.

Closing of the chain's warehouse in Santa Ana, Oa., forced the need for additional financing. Under its current line of credit from Fidelcor in Pennsylvania, the company can borrow 50 cents for every dollar of inventory in the warehouse, but only 30 cents on the dollar for inventory in stores, Jaffee said. (ilosing the warehouse will bring estimated savings of $3 million a year, he added.

Sara Stack, a retail specialist at Bateman [:ichler, Hill Richards, Los Angeles, who follows the do-it-yourself industry, commented, " Usually, hiring an investment banker means

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3706Mt. Diablo Blvd. #?frO Lafayette, CA94549 4rs/284-s807 either the company will be sold or go private. "

National Lumber, which has 2l stores, was founded 48 years ago. In fiscal 1989. it lost $4.6 million on sales of $152.4 million. It also lost money in the flrst two quarters of fiscal l 990.

Discussing the company losing ground to warehouse chains, Stack said, "California is a large market for do-it-yourself, but it's very competitive with the entry of Home Depot and other warehouse giants. There will be more shakeouts with the powerhouses surviving. "

In an effort to survive, National Lumber has been trying new strategies. The company recently left Security Pacific for a higher line of credit at F-idelcor. A new chief financial officer and controller were hired.

Hoping to attract a different type of customer with high quality merchandise, the company is installing expanded door and kitchen displays, bringing in high end products. Displays in Garden Crove and El Toro stores will premiere the new products flrst with other stores havins them in April.

Fibreboard Wins Judgment

l-inal judgment in the asbestos insurance coverage trial which began in 1985 affirms the tentative decisions previously announced in favor of l*ibreboard Corp., Concord, Ca., regarding its insurers' obligation to provide coverage for personal injury claims.

The judgment provides that Continental Casualty Company and Pacific Indemnity Company are obligated to Fibreboard to pay all defense and up to $500,000 in indemnity costs associated with each personal injury claim involving a first date of exposure to asbestos products prior to March, 1959 (as to Continental) and prior to May, 1957 (as to Pacific). There is no aggregate limit on the number of claims for which Continental and Pacific are liable. Furthermore, a jury in phase six of the consolidated trial returned a verdict against Pacific awarding Fibreboard $6.1 million in compensatory damages lor costs Fibreboard incurred prior to April, 1985. Fibreboard expects the insurers to file postjudgment motions for reconsideration and to appeal the trial court judgment.

Fibreboard chairman and president Lawrence C. Hart said, "We are relieved that the trial phase of this l0 year old legal action has finally ended with the F'inal Judgment being entered in our favor. While the appeal process is not anticipated to be concluded before 1992, and possibly later, we are nevertheless gratified to be one step closer to compelling our insurers to provide the coverage that we are entitled to."

I,AIEST Los Angeles, Ca., Hoo-Hoo Club meeting involved golf, dinner and lellowship for the lumbermen's lraternal order. Present were: {ll standing at left: Doug Willis,'90 '91 pres.; standing at right, Rod Kautz, '89'90 pres.; seated at left, Steve Shudoma, Cap Strano. l2l Jim Moss, Mike lrish, Barry Stagner. (31 Dave BulelJohn Allen l4l Larry Widner, Louie Escobedo. l5l Bill Hoglund, Dennis Richardson, Frank 0uattrocchi. (61 Joe McGuire, Tom 0uattrocchi l7l Bob 0aks, Gerala Jones, Bill Young. (81 Tim Gaffney, Richard Miller, Ron Pepping. 19l Michael Mackin, Denis Stack ll0l Pete Clough, Andy Ersek, Ed Gavotto, Ted Gilbert.