BUSINESS BRIEFING

Notwithstanding the recent bounce in lumber prices, the U.S. wood products economy continues to bounce along the bottom. The reason: residential housing remains mired in its three-year-old slump:

• Housing starts — While April starts jumped 5.8 percent from a year ago following a 5 percent increase in March, new home construction is running at an annual rate of only 672,000 units over the past year vs. an average of 1.5 million since 1959.
• Existing home sales — This driver of remodeling benefited from the first-round tax credit program that expired last November and to a lesser degree the second round that ended April 30. But distress sales now account for over one-third of total sales, and prices continue struggling to gain traction.
• New home sales — Sales jumped to an annual rate of 504,000 in April. While these sales were up nearly 15 percent, experts believe the tax credit has simply moved demand forward.
• Remodeling — Expenditures on home improvements are expected to rise 5 percent in 2010. However the days of big spending on kitchens, bathrooms, and hardwood floors are likely behind us. Expect less contribution to hardwood demand from this segment

Two black clouds hang over the housing market:

• Foreclosed homes — The March inventory was 1.1 million units, up 20 percent in the last year. Worse, another 4.8 million owners are at least 60 days behind on their payments.
• Unemployment and consumer confidence — With the real unemployment rate hovering near 17 percent, the fraction of those with jobs are uncertain of their futures. The share of those out of work for 27 weeks or more reached nearly 46 percent, some 6.7 million Americans.

But some good signs are appearing. The economy grew by 3.2 percent in 1Q2010, the third consecutive quarter of improvement. Consumer spending jumped 3.6 percent. Real wages are rising, the average work week is growing, and new jobless claims continue to drop.

Compared to previous recoveries, the economy is not firing on all cylinders yet. But most experts believe the worst is behind us. The sector news you will find below is more positive than in years. A few months of positive developments around the world would help…

Starts remain stubbornly below the long-term average of 1.5 million…

Unemployment remains just below 10 percent…

Manufacturing Capacity Going, Going, Gone…

Few days go by without an auction announcement crossing my Inbox. One after one, woodworking plants of all sizes and types are being shuttered. Buildings and equipment are being sold for pennies on the dollar.

According to data kept by the Federal Reserve, only once since 1948 has the U.S. shed manufacturing capacity on a net basis and never by as much as has occurred in this recession. Full capacity of U.S. factories has dropped 1.7 percent below the peak reached in late 2008. During the last recession we cut capacity only 0.6 percent. And the remaining capacity is running at 70.1 percent of potential, up from 65 percent last June. The historical average is 80.8 percent.

The Fed will update its measure of capacity in late June. But readers of The Cutting Edge know that capacity in the wood products manufacturing sector has fallen substantially more than the Fed data show. Just looking at this issue, you will find mention below of nine plant closures. Using hardwood usage as a measure of production in our industry, you would conclude that nearly half of the capacity is gone or underutilized. We have closed over 250 furniture plants in the U.S. since January 2000.

For suppliers of plant and equipment, some good news may be hidden in these data. Much of the shuttered capacity has been in marginally-efficient plants equipped for large batch production. Competing in today's economy will require different production philosophies, in particular those that focus on semi-customization. Those shuttered plants and surplus machinery, for example, are not useful for competing with the Chinese. If domestic manufacturing is to make a rebound, new plants and equipment will be a must.

Sector Report

Kitchen Cabinets

While two months of numbers do not represent a solid trend, at long last the cabinet sector is showing signs of a bottom. According to the KCMA's Trend of Business Survey, March 2010 cabinet sales rose by 0.9 percent versus the same month in 2008; April sales, by 1.2 percent. But remember that cabinet sales fell 28.3 percent in 2009 so positive comparisons are relatively easy. And 2010 year-to-date numbers remain negative with January through April down 1.5 percent

Sales of stock and custom cabinets continue to suffer, down 2.2 percent and 10.2 percent respectively. Semi-custom sales, however, were up 7.5 percent in April and 4.4 year-to-date.

At the company level

• Masco Corporation, the largest cabinet producer in the U.S., reported 1Q2010 cabinet sales up 2 percent from the same period last year. On the operating margin line the company lost $15 million on sales of $403 million. Management announced its plan to combine its builder and retail cabinet groups into a single operation called Masco Cabinetry. This move will enable sale of its lower-priced Quality brand at big box retailers such as The Home Depot in direct competition with American Woodmark's entry level line. The company also announced the closure of its Waverly, OH, Mill's Pride facility and exiting from production of ready-to-assemble cabinets. The highly automated plant, opened in 1987, employed 1,216 workers and also produced RTA home office and entertainment furniture for retailers like The Home Depot, Wal-Mart, and Office Depot.
  
  
• American Woodmark announced that 4Q2010 sales were off 20.1 percent vs. the same period last year. Gross margin came in at 15.5 percent, down from 19.6 percent a year ago, and resulted in an operating loss of $5 million. Sales to builders rose by 20 percent as new home construction recovered. However retail sales, primarily to big-box home centers, fell by 30 percent vs. year-ago volume that was driven by heavy promotions. As noted above, Woodmark's home center sales will most likely be under pressure from Masco's strategic move to increase its offerings to that channel.
  
  
• MasterBrand Cabinets, a unit of Fortune Brands, has announced the expansion of its Kinston, NC, plant in anticipation of near-term growth in new home construction and remodeling. The company will invest $3.75 million; the expanded facility will create 334 new jobs. The plant will be restructured to produce a new line of cabinetry. Fortune Brands also produces the AristoKraft, Kitchen Craft, Waterloo, and HomeCrest cabinet brands.

Home Furniture

Orders Up
Factory orders rose in March for the fifth consecutive month as a modest recovery continued in this sector. Orders were up 2 percent over February and 9 percent over March 2009.

Imports Down
Furniture imports declined in 2009 to $17.9 billion from $22.6 billion in 2008 and are now at their lowest level since 2003.

Despite an 18 percent fall in shipments, China remained the number one source country with over $10 billion or 57 percent of total imports. Vietnam moved past Canada into second place and became the top source of wood bedroom furniture. Canada's shipments, hit by their strengthening currency, fell by 41 percent. Mexico remained in fourth place followed by Malaysia with Italy, Taiwan, Indonesia, Thailand, and Poland filling out the top ten sources.

Over the past few months, importers have faced sharp reductions in container availability and space on container vessels. Furniture companies compete with huge retailers like Wal-Mart for shipping capacity. As a result, importers are paying premiums ranging from $100 to $1,000 to ensure timely shipment.

At the company level results are mixed but improving…

• Furniture Brands International posted a $3.5 million profit in its 1Q2010 on sales of $322 million. While down 9.7 percent year-on-year, the quarter's sales were up 12.9 percent over 4Q2009, and the profit was the company's first since 1Q2008. Gross margin rose to 26.2 percent from 22.6 percent a year earlier. Operating income is now positive vs. a small loss one year ago. FBI's Lane Furniture has hired 186 workers for two of its upholstery plants in Lee County, MS.
  
  
• Ethan Allen Interiors posted a loss of $855,000 on 3Q2010 sales of $147.3 million, up 5 percent from one year ago. The sales increase is the first for the company since December 2007. Retail orders jumped by 18.6 percent vs. last year.
  
  
• Stanley Furniture reported 1Q2010 sales of $36.5 million, down 8.1 percent from a year ago. Gross margin fell to (6.5 percent) and operating income to (48.1 percent). As a result, the company lost $19.1 million in the quarter. The company, one of the few remaining U.S. furniture makers with multiple case goods plants, suffered from a shift in consumer demand to more design-rich, labor intensive products typically sourced from low-cost countries like China. As a result, management announced that their 1.7 million square feet Stanleytown, VA, plant will be converted to a warehouse and a staffing reduction of 530 workers. All master bedroom products will be sourced offshore, and a mothballed plant in Martinsville, VA, will be activated for limited assembly and finishing. Production of its youth furniture lines will continue at its Robbinsville, NC, plant. Virginia's Henry County, once home to plants operated by Bassett, Hooker, Pulaski, and American of Martinsville, now has no major wood furniture factories.
  
  
• Bassett Furniture Industries announced a decline of 8.5 percent in sales and a loss of $1.7 for its quarter ending February 27. Sales totaled nearly $53 million, down from $57.8 million in the same period last year. The quarter's performance was negatively affected by the acquisition of seven troubled Bassett Furniture Direct stores and the related bad debt expenses. The company now owns 43 of the 104 BFD stores. A mothballed upholstery plant was reopened in May to produce a value-priced line.
  
  
• Samson Holding, parent company of Chinese furniture maker Lacquer Craft, reported a profit of $40.2 million for its FY 2009 despite a 15.7 percent decline in sales. Sales totaled $393.4 million. Management cited the downturn in U.S. furniture retail sales as the culprit. The company sells in the U.S. under the Universal Furniture, Legacy Classic, and Craftmaster brands and is exploring selling into the Chinese market. Lacquer Craft has also formed a hospitality furniture division focused on selling to international high-end hotels. In addition, the company is building a new plant in Bangladesh to produce lower-priced casual dining sets and is establishing a Southeast Asia sawmill to supply plantation-grown hardwoods to the new plant.
  
  
• Bedroom producer Vaughan-Bassett has announced a $1 million, 16,000 square feet expansion of its Galax, VA, plant. This investment will provide additional space for storage of purchased components and finished goods. In May the company completed the relocation of its bed production lines. Last July its rough mill was modernized with the installation of a high-tech ripping/cross-cutting line. The company has added 60 jobs at the Galax plant in the past 15 months and 50 at its Elkin, NC, facility.
  
  
• Chromcraft Revington reported a loss of $980,000 in its 1Q2010 as sales declined by 16.5 percent.
  
  
• Solid wood bedroom producer Virginia Sterling has ceased production at its Midvale, OH, plant. The company was launched in 2007 as a division of Vaughan Furniture, Galax, VA. Management cited tough furniture retail conditions in 2009 followed by difficulty in obtaining financing for better sales in 2010 as the culprits.
  
  
• Upholstery producer Flexsteel posted a $2.3 million profit on a sales increase of 15 percent in its 3Q2010. That performance reversed a loss of $1.9 million in the same quarter last year.
  
  
• Recliner producer Southern Motion announced plans to add 180,000 square feet to its Pontotoc, MS, facility. The expansion will cost $7 million and employ about 200 new jobs over the next two years. Management cited the bankruptcy of Barcalounger (see below) as a factor in their decision to invest in domestic production.
  
  
• Upholstery manufacturer Albany Industries has acquired a 260,000 square feet building in Ripley, MS. Operations will begin in July and will employ about 200 workers.
  
  
• Mississippi upholstery producer United Furniture plans to open a factory in Lexington, NC, in a former Stanley Furniture casegoods plant. The company plans to invest $3.3 million in the facility and employ 150 workers over the next three years.
  
  
• Upholstery producer Caye Home Furnishings is closing its four plants and will go through an orderly liquidation. The company's brands include Stratford, Stratolounger, and Simmons Upholstery. The firm is the remainder of Futorian, founded in 1948 and once operator of the world's largest upholstery plant in Chicago, IL. That company is credited as the originator of the Mississippi upholstery industry which now supplies the bulk of promotionally-priced sofas and chairs to the U.S. market.
  
  
• Upholstery producer Barcalounger and its sister company, American of Martinsville, have filed for Chapter 11 bankruptcy protection. The filings, coming a month after the two companies ceased operation, precedes a plan by its parent company Hancock Park Capital to sell the companies to another Hancock affiliate. Production operations for both companies were located in Martinsville, VA.

Office Furniture

BIFMA, the sector trade association, estimates that orders in April increased by 12 percent, the second consecutive month of year-over-year incoming order growth and the first double-digit percentage increase since June 2007.

Analysts note that April 2009 appears to have been the low point for monthly orders in this cycle. While April shipments were down 2 percent, backlogs are growing thus suggesting the production will turn positive in the near future.

Note that office furniture is a late cycle industry and typically lags the broader economy by two or three quarters. Drivers of office furniture demand such as corporate profits and business confidence are being balanced by poor white-collar employment and weak commercial construction (see below).

BIFMA has revised its 2010 forecast for orders downwards and now calls for a 2.0 percent decline vs. 1.5 percent in its earlier projections. Shipments are seen falling 5.1 percent vs. 3.8 percent. On a more upbeat note, their 2011 forecast shows a rebound of 9.9 percent in orders and 11.1 percent in shipments.

At the company level…

• Steelcase, the global leader in contract office furniture sector, reported its 4Q2010 sales down 15.7 percent from the same period last year. On the operating income line, the company lost $20 million including $9.9 million in non-recurring restructuring costs.
  
  
• Herman Miller announced its 3Q2010 sales at $329.6 million, a decline of 7 percent from the same period last year. Gross margin came in at 31.8 percent, up from 29.9 percent last year. Operating margin turned positive at 5.1 percent vs. a loss of 0.8 percent. More importantly, orders grew by 3.8 percent driven by non-North American sales.
  
  
• HNI Corporation announced that its 1Q2010 office furniture sales declined by 9.3 percent. Earnings came in at 2.9 percent vs. 1.1 percent in the prior year. The company's brands include Gunlocke, Paoli, HBF, and Allsteel.
  
  
• Knoll, Inc. reported that its 1Q2010 sales fell 17.5 percent. Gross margin came in at 32.3 percent and operating margin at 5.37 percent, both down from the same period last year. Sales of its new Generation chair are up year-on-year.

Wood Flooring

At the company level…

• Mohawk Industries reported revenues in its Unilin flooring division up 13.9 percent for its 1Q2010. Operating earnings for that division were 9 percent, up from 6.9 percent in the same quarter last year.
  
  
• Armstrong World Industries announced a 6 percent increase in wood flooring prices effective July 1. This escalation follows a 5 to 7 percent rise last April. Management attributed the increase to rising lumber prices and energy costs. The company indicated that early signs of recovery in the housing market have put pressure on its lumber supply chain.

Art Raymond is senior vice president of operations at Hooker Furniture Corporation in Martinsville, VA, and longtime contributor to The Cutting Edge. Comments and questions are welcomed at araymond@hookerfurniture.com.

Non-Residential Construction

Non-residential construction is edging toward the positive. The Architect's Billing Index for April came in at 48.4, up from 46.1 the prior month. Although that performance marked the 27th consecutive month below 50 (the demarcation line between expansion and contraction), April is the highest reading since January 2008 and a significant improvement from the January 2009 low of 33.9. The Billing Index is a leading indicator for this sector with its direction preceding actual construction by nine to twelve months.

Art Raymond is senior vice president of operations at Hooker Furniture Corporation in Martinsville, VA, and longtime contributor to The Cutting Edge. Comments and questions are welcomed at araymond@hookerfurniture.com.

Excess Reserves of Depository Institutions: A Commentary

"This graph speaks volumes as to why our customers are constrained by lack of available investment capital," said WMMA board member Allen Turk, Precision Drive Systems (PDS). The graph was presented by PDS design engineer, Tim Fry, who is currently the recipient of a WMMA scholarship grant in his MBA studies at the University of North Carolina, Charlotte. Turk continues:

The graph is alarming until we consider the gradual reduction in levels of reserves required by our government that accelerated over the last two decades, according to many experts. The government's determination to increase residential home ownership was the means of increasing consumer spending to expand GDP. U.S. regulators achieved this by reduced minimums required reserves a.k.a. increased debt to equity leverage.

The recent crisis has created great uncertainty with banking industry boards and management. They have reacted by hoarding cash reserves until they can be sure to remain in compliance without dilution when they learn what degree of a return to the more conservative reserves ratios from past decades may be imposed by the administration. Thus we can begin to understand the realities of the true limitations to the Federal Reserve's independence. This point and a reference to the current spread of amnesia within our Congress were noted in a speech by Allan Greenspan.

PUBLIC POLICY

The current debate over the "extenders" bill epitomizes the state of tax policy-making in Washington.

The term "extenders" refers to the fact that Congress feels compelled to renew various expiring and expired tax credits for a short period of time. It is likely Congress will eventually renew dozens of provisions, including the Research and Development Credit, for the remainder of this year. If it happens, I will not be able to bring myself to call it a victory.

As you know, Congress ostensibly is working under a regime that requires it to "offset" the revenue lost from any tax relief with revenue gained from spending cuts or tax increases elsewhere. Unfortunately, the well of revenue increases from elsewhere will soon go dry. In the extenders bill, Congress is contemplating a revenue increase based on recharacterizing S Corporation shareholder income as wages. Congress has already signaled it will limit the change to S Corporations providing professional services. Professional services are defined as "services in the fields of health, law, lobbying, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, investment advice or management, or brokerage." If it remains a narrow provision, I will not be able bring myself to call it a victory.

The contradictory combination of an ever-growing stack of provisions that need to be renewed, the diminishing pool of revenue offsets, the desire to show at least a modicum of fiscal restraint, and a short-term commitment to helping small businesses create jobs and stabilize the economy are creating a whirlwind of good and bad policy.

Last fall, the discussion regarding the extenders started with a package of provisions that would require an offset of roughly $30 billion. By Memorial Day, the price tag had exploded to $200 billion. You could read all the reports in between and easily not notice the "nuance" in the debate — that it had grown exponentially. Everybody was still talking about the "extenders" as if it were the same bill.

As the size of the package grew, so did the need to find revenue offsets. At some point, the magnitude of the extenders' growth outstripped the available revenue offset sources. Again without the general public appreciating what was going on, the discussion moved to a partial offset bill. This required those seeking some fiscal restraint to either turn a blind eye or to circumvent some of the very recent rules Congress put in place for imposing fiscal restraint. "Emergency spending" rules had to be invoked.

At the same time, Congress is working under the theory more has to be done to help small business. Other tax relief legislation is marching along on parallel tracks, sometimes using the same revenue offsets that are paired with the extenders, which means everybody knows that choices will have to be made.

During the extenders debate, some of the most vocal groups supporting the extenders find themselves opposing the package because they deem the revenue offsets more harmful. Fiscal Blue Dogs, who are also some of the most ardent small business advocates, find themselves caught between hard choices.

Folks like me find it more difficult to have a rational conversation. I can be talking about making the direct expensing allowance permanent, objecting to the revenue offset that would recharacterize S Corporation shareholder income as wages, AND talking about the need for fiscal restraint—all in the same conversation.

Here is what I have settled upon in my own mind. This Congress has a relatively short window left for productive activity before it shifts to campaign mode full time. Give us the permanent direct expensing allowance and some estate tax relief. Forget about the offsets. Skip the other tax relief. No more stimulus spending. Call it a day and let's regroup next January!

Preventing a Form 1099 Avalanche: WMMA Public Policy Alert!

As a result of a new law signed this year, beginning with payments made in 2012, every business will be required to issue to any vendor of services OR property to which the business has paid more than $600 a year for those services or property, an information reporting form known as Form 1099. The Form 1099 must also be sent to the Internal Revenue Service. In addition to issuing the forms, a business will have to get Taxpayer Identification Numbers (TINs) from all of those vendors and withhold payments to any such vendor until it receives the TIN. Penalties apply if you fail to issue the Forms 1099.

Under the existing law, businesses issue the Form 1099 only to individuals who provide services to a business. The new law makes two changes: the Form 1099 must be issued to corporations of all sizes and shapes as well as to individuals AND a Form 1099 must also be issued to individuals and corporations that provide property to a business.

The payments included under this are not only those made directly by check but also those made by other means such as credit cards, for example. Think about the airlines, hotels, rental cars, and restaurants that appear on your credit card bill. You might not think of them as vendors of goods and services, but that is what they are. Also, if you are in the business of selling or distributing goods, all of your suppliers of products are also vendors under the new law. (Under existing law there are regulations that provide narrow exceptions for some types of vendors (telegrams, telephone, freight, storage) and some individual vendors that accept payment from you by credit card and meet qualifications set forth by the IRS. Even if some regulatory exceptions are carried over under the new law, you will still be the one responsible and liable for issuing the information report and it will not be easy.)

And, Congress is considering doubling the penalties.

And, of course, any business that pays you more than $600 will be sending you a Form 1099.

Representative Daniel Lungren (R-CA) has introduced legislation to repeal the requirement. The bill is H.R. 5141, The Small Business Paperwork Mandate Elimination Act.

If you want to send emails to your Senators and Representative, go to www.stopform1099.org.

But do not stop there, call your Senators and Representatives (202-224-3121) and deliver the message you will find at www.stopform1099.org.

INDUSTRIAL DUST

OSHA has scheduled a first-ever virtual stakeholder meeting on Monday, June 28, 1:00 p.m. EDT, to seek input about combustible dust workplace hazards. Comments from the meeting will be used to help the agency develop a proposed standard on combustible dust.

According to OSHA, this virtual meeting format will provide quick and easy access to a broader audience, such as small businesses who would otherwise not be able to participate. The WMMA Dust Task Force encourages you to participate if you can.

Individuals can find information on the free Web chat by accessing http://www.dol.gov/dol/chat.htm. The live chat will be held for one hour, beginning at 1 p.m. EDT, on June 28. Afterward, individuals can access the site through July 7 to provide feedback and receive additional information.

New Requirements in Proposed NFPA 664 Revision

"Is an excessive and likely undue economic burden going to be placed on woodworking operations by the proposed NFPA 664 revisions?" asks WMMA Dust Task Force Chair Jamison Scott, Air Handling Systems.

The National Fire Protection Association (NFPA) Standard 664 for woodworking facilities is currently in its revision cycle and is actively considering proposed revisions.

The WMMA Dust Task Force encourages all interested parties to read the Report on Proposals (ROP) and make their comment on the proposed revisions under consideration by the deadline of September 3, 2010. Download these documents here or they can also be found on http://www.nfpa.org/aboutthecodes/AboutTheCodes.asp?DocNum=664 under the "Next Edition" Tab.

There are a number of issues under consideration that the woodworking industry may find of interest which include:

• Required signage on all dust collectors (Log #19)
• Requirements for access doors on ducting (Log #3)
• Requirements for explosion isolation equipment on return air ducts (Log # CP13)

The latter issue may have serious economic ramifications for woodworking operations. One opinion that is shared by a number of members of the Dust Task Force is an objection to the inclusion of 8.2.2.6.5 ( Log #CP13). This which would mandate explosion isolation devices on all return air ducts from an outdoor dust collector. It is felt that this will place a new and unnecessary economic burden - particularly on the small woodworking operation. The need for this additional protection has not been demonstrated by any loss history study.

In a related issue with NFPA standards, WMMA submitted a formal comment letter to NFPA on the possible effects of combining standards. WMMA members were urged to submit their comments, due June 11, to NFPA as well.

Please share your comments and concerns with WMMA Dust Task Force Co-Chair Jamie Scott, jscott@airhand.com.

INTERNATIONAL BUSINESS DEVELOPMENT

Almost a quarter of North America's wood-products manufacturing industry is in Canada. With its recession behind it and its home-building industry growing again, this easily accessible market could offer valuable opportunities for WMMA members struggling with the slump in domestic demand.

Canada's population is the size of California's, and its wood industry is the size of California's and North Carolina's, combined. The current economic conditions are forcing all of us to think outside the box in looking for creative ways to drive sales. Maybe it is time to look outside our borders, as well.

Click here to read the entire brief on Member Central.

BUSINESS DEVELOPMENT

Bookmark this page http://www.wmma.org/members/model/forecasting_tools.cfm to access more information and monthly reports! Use your member username and password. Contact Association Headquarters if you need assistance.

Spring 2010 Economic Forecast Report
Manufacturing ISM Report on Business
Construction Put in Place - March 2010
Manufacturers' Shipments, Inventories and Orders - April 2010
Manufacturing and Trade Inventories and Sales - March 2010
New Residential Construction - April 2010
Purchasing Managers Index - April 2010
U.S. Leading Indicator - April 2010

Make Your Move! The Beaulieus' Book Debuts

Make Your Move, Alan and Brian Beaulieu's book on how to anticipate business cycles and making the most out of each phase, is now available online through Amazon and Borders (links below). Delve into the Management Objectives™ with Alan and Brian. See how they view the economy and what leading indicators really work!

http://www.amazon.com/s/ref=nb_sb_ss_i_0_14?url=search-alias%3Dstripbooks&field-keywords=make+your+move+beaulieu&sprefix=make+your+move

http://www.borders.com/online/store/TitleDetail?sku=160037719X

Alan Beaulieu is a perennial favorite at WIC and the Institute for Trends Research, is the source of the WMMA Economic Forecast Reports.

NEWS YOU CAN USE

A new American National Standard Institute (ANSI) standard, Safety Requirements for Fixed Angle Jump Saws, O1.1-1 (2007) became available in May 2010.

Developed by the Accredited Standards Committee O1, Safety Requirements for Woodworking Machinery, of which WMMA is secretariat, the ANSI O1.1-1 (2007) is the first of a series of new woodworking machine-specific safety standards and is intended to be used in conjunction with ANSI O1.1.

The ANSI O1.1-1 (2007) standard, Safety Requirements for Fixed Angle Jump Saws, is available for purchase in electronic format from the ANSI eStandards Store. WMMA members receive a 25 percent discount off WMMA safety standards. Machine-specific standards will be $25.00 for non-members and $18.75 for members. To order, please visit:

http://webstore.ansi.org/FindStandards.aspx?Action=displaydept&DeptID=3128&Acro=WMMADpName=Wood%20Machinery%20Manufacturers%20Association

At checkout, WMMA members can enter their Member/Discount Code to receive the discounted price. Click here to get code.

About the Jump Saw Standard

The scope of the jump saw standard, O1.1-1, covers the safety requirements for the design, installation, care and use of single blade, non-adjustable cut angle jump saws and certain related accessory equipment, used in industrial and commercial applications, having a total connected power of 5 hp (3.7 KW) or greater, or having 3-phase wiring.

Fixed angle saws may also be known as chop saws or cutoff saws. Jump saws have historically been pivot-mounted devices. However, modern jump saws may also use linear vertical travel and are therefore included in this standard. Fixed angle or non-adjustable cut angle are not intended to mean that the blade cannot be adjusted for precision or capacity, but rather that its cut angle is fixed by its design.

ANSI O1.1

An updated version of the umbrella standard, ANSI O1.1, is currently in its public review phase, in accordance with ANSI procedures.

New U.S. Health Care System

On March 23, 2010 President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law as Public Law 111-148. It includes most of the features of our new health care system. On March 30, 2010, President Obama signed into law the Health Care and Education Reconciliation Act (HCERA) as Public Law 111-152. HCERA modifies certain elements of PPACA. Together they constitute our new health care system ("new law").

Click here for an analysis by SBLC.

Direct Expensing as a Way to Close Sales: Temporary Increases Through the End of 2010

Direct expensing, under IRS Code Section 179, is a useful sales tool for WMMA members. It allows a business to write off a small amount of annual investment in capital assets, such as machinery, in the year of purchase in lieu of depreciating the investment over a number of years. The limits of expenditure change from year to year, however. A new law, the Hiring Incentives to Restore Employment Act, signed into law as Public Law 111-147 by President Obama on March 18, 2010, extends the temporary increases of $250,000 for the allowance and $800,000 for the overall cap through the end of 2010.

The sample document on Member Central/North American Sales and Marketing can be used when closing an equipment sale with a potential customer who might be reluctant to buy now.

IWF 2010 UPDATE

Encouraged by improved business conditions, industry executives attending the WIC in April in Monterey, CA came together for the first time to discuss ways to encourage attendance at and enhance the experience of buyers of wood machinery and wood processing supplies at the International Woodworking Fair (IWF) on August 25-28, 2010 in Atlanta.

"IWF is the largest wood industry trade show in the western hemisphere," said Chris Hacker, vice president of Taylor Manufacturing and JLT Clamps, of Poughkeepsie, NY, and chair of the IWF Task Force. The task force, consisting of member company representatives of the Wood Machinery Manufacturers of America (WMMA) and the Woodworking Machinery Industry Association (WMIA) met for the first time for this purpose at WIC 2010. "With more than 350,000 net square feet of floor space and more than 800 exhibitors — and growing — IWF is the essential show providing continued value for the wood processing industry. Nowhere else in North or South America can buyers see and evaluate more exhibitors in one place. These manufacturers and suppliers will be showing their advanced products and technology," said Hacker.

The task force discussed various techniques to showcase products in conjunction with efforts designed and implemented by IWF. For the first time, social networking will be used extensively throughout the IWF Web site. The task force discussed other new opportunities and has agreed to continue to meet and plan through the spring and summer.

WMMA Congratulates Members Named Finalists for the IWF 2010 Challengers Award® Competition

Eight WMMA members are among the finalists for the IWF 2010 Challengers Award Competition. They are:

• Accurate Technology — ProCAB QC
• Accu-Systems, Inc. — Dovetail Drawer Machine
• Black Bros. Co. — World Class Roll Coater
• Merritt Machinery, LLC — Meinan Wide Belt Wet Sander
• Precision Drive Systems — Dyna-Loc ATC Spindle
• Timesavers, Inc. — Oscillating Chevron Polishing Platen
• Unique Machine & Tool Co. — Unique "Go Green" Inserter
• USNR — AddVantage Chop & Rip Optimizer

The Challengers Award, which will be presented during IWF 2010, is known throughout the world as the woodworking industry's highest honor, recognizing advancements in technology or significant contributions to environmental improvement. It focuses on companies that have distinguished themselves by developing innovative technology in products, materials, supplies and services. The award challenges IWF exhibiting companies to develop revolutionary, creative, ingenious, forward-thinking technology, materials, services or safety devices that advance the industry.

Click here for more information.

Join the IWF Industry Community

Get connected. Join the WMMA online community at IWF at http://iwfcommunity.ning.com/.

ASSOCIATION NEWS

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WMMA Email Policy

Every WMMA member company must have a key contact who will receive all key contact mailings, including the annual dues invoice. The member company provides the key contact information and keeps it updated. The majority of WMMA information is communicated via e-mail. The key contact can forward WMMA communications to others in the company who would benefit from the information. Additional contacts, provided and updated by the key contact, may receive targeted communications on WMMA specific programs and services according to business functions, such as Finance/Accounting, Human Resources, International/Export Trade, Market Research, Research and Development/Engineering, Sales and Marketing, Supply Chain/Operations.

WMMA does not sell email addresses. WMMA periodically cooperates with partner organizations which have an interest in serving WMMA members and which do not use the information for commercial purposes. Such information sharing is determined by the Board of Directors and/or the WMMA Committees in conjunction with the WMMA Management Team.

WMMA respects the privacy of members and carefully determines the benefits of each communication to ensure that it is relevant, valuable and informative. For more information, please contact WMMA at info@wmma.org.

WMMA Career Center

Member companies seeking new talent or Cutting Edge readers seeking employment can meet online at WMMA's Career Center. Contact info@wmma.org for more information.

WIC 2010

WIC 2010 featured the theme "Forget Yesterday, It's a New Tomorrow" and was a venue for industry leaders to discuss strategies for success in the recovering economy. Held in beautiful Monterey, CA, WIC 2010 was a mix of networking, education, social and association events.

Members can click here to view presentations and materials from the meeting.

WMMA Elects New Officers and Directors

WMMA members attending the WIC and those who submitted email ballots, elected Mark Chappell, vice president of Alexander Dodds Company in Grand Rapids, MI, to a two-year term as president of the association. John Schultz, president of Super Thin Saws, of Waterbury, VT, was elected vice president. Jamison Scott, corporate officer of Air Handling Systems by Manufacturers Service Co. in Woodbridge, CT, was elected to serve a one-year term as treasurer.

Other directors elected to were:

• Richard Cowan, president of Rees-Memphis
• Allen Turk, chairman and CEO of Precision Drive Systems
• Linda Wyant, vice president, Safranek Enterprises, Inc., Her-Saf Products
• Kenneth R. Anselm, CEO of Western Cutterheads Inc. & Mattison Rotary Lathes, LLC

Click here for more.

WMMA Honors James E. Laster with Baldwin Award of Excellence

Former award honoree Peter Perez (left) presents Jim Laster (center) with the 2010 WMMA Ralph B. Baldwin Award of Excellence with the help of outgoing WMMA President Tom Onsrud at the Woodworking Industry Conference on April 22, 2010 in Monterey, CA. (WMMA Photo)

James E. Laster, executive vice president of Greensboro, NC-based Newman*Whitney, was the recipient of the 2010 Ralph B. Baldwin Award of Excellence at WIC. This annual award recognizes individuals who have made outstanding contributions to the woodworking industry, the Association, their companies and their community.

The presentation speech was given by the 2008 Baldwin Award Winner, Peter Perez, president of Carter Products Company, based in Grand Rapids, MI. Perez noted "Our winner this year is a 'giant' in our industry. Jim Laster has served WMMA in a variety of capacities: committee chair, treasurer, vice president and president. He always has been a willing member of any task force group assembled to address an issue. At his company, he has earned a reputation as a leader."

Click here for more.

MEMBER NEWS

American Renolit
1207 East Lincoln Way
La Porte, IN 46350
219-324-6886
Key Contact: Lana Cella, Product Manager, Design
www.americanrenolit.com

FLAMEX, Inc.
4365 Federal Drive
Greensboro, NC 27410
(336) 299-2933
Key Contact: Allen Wagoner, President
www.sparkdetection.com

Leitz Tooling Systems
4301 East Paris Avenue SE
Grand Rapids, MI 49302
616-698-7010
Key Contact: William T. Cariano, President
www.leitztooling.com

Microvellum, Inc.
444 S. Haskell Street
Central Point, OR 97502
541-664-1625
Key Contact: Clay Swayze, Marketing
www.microvellum.com

Q & A WITH NEW MEMBERS

Please describe your business. FLAMEX was founded by Ole M. Sorensen in 1994 as a North American supplier of customized industrial process fire prevention and protection equipment.

Our key product lines are:

• FLAMEX Spark Detection and Extinguishing System
• Minifog Water Mist System
• High Speed Abort Gates, Deluge System for Dust Collectors and Bins

What makes your business or products "different" or "noteworthy"? FLAMEX introduced spark detection and extinguishing systems to North America in 1977 and was the first system of its type to gain Factory Mutual Approval.

How would you describe the company's business mission or philosophy? To protect the lives and property of our customers. To assist our customers in creating a safer workplace while minimizing the probability of business interruption.

What are your company's primary concerns in the woodworking industry? The protection of wood dust collectors from fires and explosions.

Have you been affiliated with the WMMA or any of its members before? We have a working relationship with some of the member organizations.

How do you hope to benefit from your WMMA membership? The WMMA Membership Services Chair Dick Cowan suggested that we consider for joining for several reasons. We hope to develop our mutually beneficial relationship and increase our exposure. We look forward to being part a part of the WMMA Industrial Dust Task Force and hope to e able to contribute in any way possible.

Editor's note: Allen Wagoner, president of Flamex, is the newest member of the WMMA Wood Dust Task Force, a group of members concerned that the increased attention to dust be fair and balanced to the wood industry, especially to the members' customers.

CAMaster CNC

Can you tell us something about your company? CAMaster CNC was founded in 2004 and manufacturers CNC equipment, including CNC routers, plasma, and laser.

What makes your business or products "different" or "noteworthy"? Strong work ethic, innovative design, willingness to listen to customer needs prior to sales, service and support after the sale.

How would you describe the company's business mission or philosophy? We at CAMaster feel that all of our customers should be treated like family. To that end, we strive to provide industrial CJC solutions at competitive prices. We understand that our success depends on the success of our customers.

Microvellum

Please describe your business. Microvellum was founded by David Peel in 1991 in Medford, Oregon. Today we have locations in the US, Canada, Quebec, Australia, London, Jordan, China, Mexico, India. Microvellum's product line caters exclusively to the woodworking industry and offers fully automated solutions for commercial casework, residential cabinets, closet and storage systems, store fixtures and office furniture manufacturers.

Key product lines are:

• Microvellum Toolbox
• CabinetMaker
• MicroManager
• ALIS
• Overdrive Pro

What makes your business or products "different" or "noteworthy?" Microvellum is what you call a cutting-edge software company. We pride ourselves in staying current with the latest development platforms and pass along new features and tools to our customers that make them more efficient and productive. Partnering with Autodesk, we are able take advantage of the industry's leading design tool — AutoCAD. While many believe AutoCAD to be a daunting program to learn, we take over as the "brains" behind the user interfaces and allow AutoCAD to act as the design engine — powering Microvellum's logic.

How would you describe the company's business mission or philosophy? Our mission is to provide efficient information handling solutions for the woodworking industry. We will continue to strive to make quality, affordable software so that our customers can accomplish their goals. We will continue to provide the best integration solutions, linking cutting edge technology and applying them to real world problems. We will continue to provide the training required to ensure that our customers can benefit from state-of-the-art technology. We will continue to provide the support our customers need to benefit from the products and services we have to offer. Our job is never done because new ideas are born every day!

What are your company's primary concerns in the woodworking industry? Slow job growth, too many businesses trying to stick with old or no technology — not realizing the automation is the only way companies are going to be successful and profitable in the coming years.

How did you come to join the WMMA? We are very interested in the expanding Microvellum globally. The tools available by being members with the WMMA are very helpful. Not to mention the significant discount for the IWF tradeshows…and we hope to gain additional insight on woodworking trends worldwide.