Replies to post #5169 on Eco Building Products Inc. (fka ECOB)

[Cobra Kai]

The spread mentioned in the news release is a comparable premium Douglas Fir KD stud that sells for around $3.59 vs $3.79 for Eco in the side by side store comparison I inquired about.

But there is more basic cheaper untreated wood options

$2.98 Untreated
http://www.homedepot.com/p/2-x-4-x-8-Douglas-Fir-Larch-North-Kiln-Dried-Stud-2X4X96-HD-PREM/204371378


$3.62 Eco Building
http://www.homedepot.com/p/Eco-Building-Products-2-x-4-x-8-Douglas-Fir-Red-Shield-Premium-Stud-248/203909056

As I understand it Eco is shipping from there plant location to Home Depot via railcar- the (new) New Jersey plant also access to railcar as it was mentioned in the news release. The margins on the coatings are probably between 50-70% and HD takes a cut and then makes money on the wood they still own and Eco mitigates risk of large inventories and cost associated with that.

I think they are making major strides to become much leaner and cut cost including looking to new automated system that will be able to supply all of Home Depot more efficiently that was mentioned in the 6/28/2013 letter to shareholders- "The need for automating existing production equipment is now prevalent more than ever as evidenced by the Company's Salem coating facility operating at full capacity"


some of The biggest problems for Eco were they were an unknown and now they have more robust demand and they can look to solve the funding of the company because that cost them millions in interest cost early stages


6/28 letter to shareholders
"Moreover, the Company is active in discussion with several US-based financial institutions capable of providing funding to support Eco's need to ramp output in all facilities"

The pieces are beginning to fall in place for Eco- it came a little late but better late than never I guess- it looks like several riddles will begin to be solved as they are getting lots of attention and growth- all they would need is 4-5% of the u.s lumber market to be worth billions :)

While the list with Home Depot grows rapidly I anticipate the list of affiliates will probably also grow and Eco will make percentages off there business as well- lumberyards will begin to get asked by customers if they too carry protected lumber and all roads will lead back to Eco so there are in a very nice position.