Standard & Poors (S&P) recently reaffirmed cabinet firm Norcraft Companies' corporate 'B' rating, according to Reuters, although its outlook was downgraded from stable to negative.
The pessimistic outlook for Norcraft is due in part to the company's exposure to the financial troubles of its largest buyer, DirectBuy, as well as continued weak demand for cabinetry. However, S&P says that the rating could be revised upward if activity in the housing and remodeling market picks up.
Norcraft released its year-end financial report. Net sales increased to $269 million in 2011, however net income for the same period posted a $3.7 million loss.
"The soft industry demand caused by difficult economic conditions persisted through 2011, and we anticipate 2012 will also be very challenging," said Mark Buller, president and CEO, in a statement. "While we are optimistic about the longer-term recovery and growth in the new home construction and home improvement markets, the timing and strength of such recovery remain extremely difficult to predict with certainty. As a result, we plan to continue introducing new products and programs to compete in this difficult market."
Six cabinet brands are manufactured under Norcraft: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark Cabinetry, Fieldstone Cabinetry and Brookwood. UltraCraft, which manufactures frameless cabinetry, recently announced it was adding 40 new jobs to its Liberty, NC, cabinet finishing line.
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