National Home Centers Net Income Swells

National Home Centers Inc. said net income for the quarter ended July 31 jumped by 261 percent to $1.1 million (or 16 cents per share) compared with net income of $312,000 (or 4 cents per share) in the same period last year.

Net sales were $31.6 million, a 21 percent increase over $26.1 million in the second quarter of 2000.

Comparable store sales for stores open more than one year also increased 21 percent.

EBITDA (earnings before interest, taxes, depreciation and amortization) for the second quarter of fiscal 2001 was $1.8 million versus $1.0 million in the second quarter last year.

National finished the quarter operating the same eight stores that were open a year ago. For the second quarter, the company’s revenues resulted from 81 percent of its sales to professional contractors and 19 percent to retail customers versus 78 percent and 22 percent, respectively, in the second quarter last year.

“The improvement in comparable store sales was attributable to favorable weather, lower interest rates and an increase in large project business during the second quarter,” said Dwain A. Newman, chairman and CEO. “We remain optimistic regarding the remainder of the year.”

• Dwain Newman, CEO and majority owner of 63.5 percent of National Home Center’s common stock, recently notified the company’s board of directors of his intention to make a tender offer of $1.20 per share for all of the company’s common stock that he doesn’t control. The stock was trading at $1.15 per share at noon Aug. 14, the day the second-quarter numbers were released. The stock, which peaked at $15 per share in January 1994, has been hovering between $1-$2.50 per share since January 1997.

The 36.51 percent represents about 2.6 million shares of issued and outstanding stock. The board of directors has appointed Richard D. Denison and David W. Truetzel, both independent members of the board of directors, to serve as the independent committee for the purpose of evaluating the fairness of the offer to the minority shareholders and making a recommendation to the board.

The Springdale-based building supply company made a profit in 1999 for the first time in five years. The company had been undergoing a restructuring, getting away from retails sales, which has been dominated by Home Depot and Lowe’s, and targeting sales to building contractors instead.