Building Materials Holding (BLGM) 8-K BMHC Announces First Quarter 2009 Financial Results

Exhibit 99.1

BMHC ANNOUNCES FIRST QUARTER 2009 FINANCIAL RESULTS

BOISE (May 15, 2009) – Building Materials Holding Corporation (OTCBB: BLGM), a leading provider of building materials and construction services to professional residential builders and contractors, today reported sales for the first quarter of 2009 decreased 51% to $167 million from $343 million in the same quarter a year ago.

Net loss for the first quarter of 2009 increased to $45.2 million or $1.53 per share from a net loss of $33.9 million or $1.17 per share in the same quarter a year ago.

Commenting on first quarter results, Robert E. Mellor, Chairman and Chief Executive Officer, stated, “The operating environment for the homebuilding industry remained very challenging during the first quarter of 2009. We continued to focus on our restructuring initiatives to improve cost efficiencies and preserve liquidity.

 “We are working with our lenders toward a restructuring of our credit facility and balance sheet and we appreciate their continuing support. We are pleased to have obtained an extension of the waiver from our lenders that allows the Company to continue to borrow up to $20 million under our revolver.

 “We also appreciate the continued hard work of our employees and ongoing support from our vendors during these unprecedented times.  We greatly value the loyalty of our customers and look forward to continuing to provide them with high quality materials and services,” concluded Mr. Mellor.

Extension of Waiver to Credit Facility

The Company obtained an extension of the waiver from its lenders that continues to waive the monthly Adjusted EBITDA, forecast and projection requirements of our credit agreement and continues to allow the Company to borrow up to $20 million through June 29, 2009.

Operating Results

(thousands)

	Three Months Ended  March 31		%
	2009	2008	Change
Sales
Building Products	$   99,174	$ 179,886	(45)%
Construction Services	68,325	163,062	(58)%
	$ 167,499	$ 342,948	(51)%
Loss from operations	$ (32,925)	$ (18,356)	(79)%

For the quarter, sales declined 51% to $167 million from $343 million in the same quarter a year ago.  The depressed conditions in the general homebuilding industry continue to be reflected in our markets.  Sales were lower in all our regions.  As of March 2009, single-family housing starts for the U.S. were at an annualized rate below 0.4 million and single-family permits in our markets were at an annualized rate of 0.1 million.

For the quarter, loss from continuing operations increased over the prior year’s first quarter as a result of:

· lower sales volume, particularly construction services,

· gross margin compression from competitive market conditions and

· deleveraging of selling, general and administrative (SG&A) expenses as fixed capacity costs combined with facility consolidation and closure costs of $4.9 million in the first quarter of 2009 resulted in SG&A increasing to 37.0% from 24.6% of sales in the prior year’s first quarter. Excluding the $4.9 million of consolidation and closure costs, first quarter 2009 SG&A expenses were 34.1% of sales.

Interest Expense

For the quarter, interest expense was 4% or $0.5 million more than the same quarter a year ago.  The increase was due to:

· higher interest rates,

· costs associated with interest rate swap contracts no longer accounted for as cash flow hedges and

· costs to obtain a limited waiver for our credit agreement.

2

Income Taxes

For the quarter, the significant change in our effective tax rate for continuing operations was the result of additional valuation allowance due to the uncertainty as to our ability to realize deferred tax assets.

About BMHC

BMHC is one of the largest providers of building materials and residential construction services in the United States.  We serve the homebuilding industry through two recognized brands: as BMC West, we distribute building materials and manufacture building components for professional builders and contractors in the western and southern states; as SelectBuild, we provide construction services to high-volume production homebuilders in key markets across the country.  To learn more about BMHC, visit our website at www.bmhc.com.

BUSINESS RISKS AND FORWARD-LOOKING STATEMENTS

There are a number of business risks and uncertainties that affect our operations and therefore could cause future results to differ from past performance or expected results.  Additional information regarding business risks and uncertainties is contained in Part II Item 1A of our most recent Form 10-Q.  These risks and uncertainties may include, however are not limited to:

· substantial doubt about our ability to continue as a going concern;

· our existing common equity may have no value;

· demand for and supply of single-family homes which are influenced by changes in the overall condition of the U.S. economy, including interest rates, consumer confidence, job formation, availability of credit and other important factors;

· our ability to maintain adequate liquidity, reduce operating costs and increase market share in an industry that has experienced and continues to experience a significant reduction in average annual housing starts;

§  our liquidity is dependent on operating performance, an efficient cash conversion cycle and compliance with financial covenants;

§  our ability to implement and maintain cost structures that align with sales trends and

§  losses of customers as well as changes in the business models of our customers may limit our ability to provide building products and construction services;

· intense competition;

· availability of and our ability to attract, train and retain qualified individuals;

· fluctuations in our costs and availability of sourcing channels for commodity wood products, concrete, steel and other building materials;

· weather conditions including natural catastrophic events;

· exposure to product liability and construction defect claims as well as other legal proceedings;

· disruptions in our information systems;

· actual and perceived vulnerabilities as a result of widespread credit and liquidity concerns, terrorist activities and armed conflict;

3

· costs and/or restrictions associated with federal, state and other regulations and

· numerous other matters of a local and regional scale, including those of a political, economic, business, competitive or regulatory nature.

Risks related to our shares may include, however are not limited to:

· price for our shares may fluctuate significantly;

· our shares may be less attractive as they are not traded on a large, more well-known exchange and

· anti-takeover defenses and certain provisions could prevent an acquisition of our company or limit share price.

Certain statements in this news release including those related to our restructuring initiatives and cost cutting efforts, our liquidity and negotiations with our lenders are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Statements that are not historical or current facts, including statements about our expectations, anticipated financial results and future business prospects are forward-looking statements.  While these statements represent our current judgment on what the future may hold and we believe these judgments are reasonable, these statements involve risks and uncertainties that are important factors that could cause our actual results to differ materially from those in forward-looking statements.  These factors include, however are not limited to the risks and uncertainties cited in the above paragraph, as well as our ability to timely and successfully implement our restructuring program and achieve the benefits that the program is designed to provide, including preserving value, enhancing our liquidity, generating tax refunds, reducing expenses and generating cash proceeds.  Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date of this news release.  We undertake no obligation to update forward-looking statements.

For More Information Investor Contacts:

·   Bill Smartt, Senior Vice President and Chief Financial Officer, BMHC

·   Mark Kailer, Vice President, Treasurer and Investor Relations Officer, BMHC

+1.415.627.9100

·   Lisa Laukkanen, The Blueshirt Group for BMHC

+1.415.217.4967

lisa@blueshirtgroup.com

(Tables Follow)

4

Building Materials Holding Corporation

Consolidated Statements of Operations

(thousands, except per share data)

(unaudited)

	Three Months Ended March 31						Year Ended December 31
	2009			2008			2008
Sales
Building products	$	99,174		$	179,886		$	693,664
Construction services		68,325			163,062			631,015
Total sales		167,499			342,948			1,324,679
Costs and operating expenses
Cost of goods sold
Building products		77,267			130,683			514,222
Construction services		66,839			150,795			576,087
Impairment of assets		365			—			53,015
Selling, general and administrative       expenses		61,952			84,256			349,417
Other income, net		(5,999	)		(4,430	)		(5,059	)
Total costs and operating expenses		200,424			361,304			1,487,682
Loss from operations		(32,925	)		(18,356	)		(163,003	)
Interest expense		12,155			11,638			52,925
Loss from continuing operations    before income taxes		(45,080	)		(29,994	)		(215,928	)
Income tax benefit (expense)		12			(3,849	)		23,409
Loss from continuing operations		(45,068	)		(33,843	)		(192,519	)
Loss from discontinued operations		(152	)		(3,513	)		(12,680	)
Impairment of assets		—			—			(7,813	)
Income tax benefit (expense)		—			3,456			(1,860	)
Loss from discontinued operations		(152	)		(57	)		(22,353	)
Net loss		(45,220	)		(33,900	)		(214,872	)
Noncontrolling interests loss		—			39			63
Net loss attributable to common    shareholders	$	(45,220	)	$	(33,861	)	$	(214,809	)
Net loss per share:
Continuing operations		$(1.53	)		$(1.17	)		$(6.62	)
Discontinued operations		—			—			(0.77	)
Basic		$(1.53	)		$(1.17	)		$(7.39	)
Continuing operations		$(1.53	)		$(1.17	)		$(6.62	)
Discontinued operations		—			—			(0.77	)
Diluted		$(1.53	)		$(1.17	)		$(7.39	)

5

Building Materials Holding Corporation

Consolidated Balance Sheets

(thousands)

(unaudited)

	March 31			December 31				March 31			December 31
	2009			2008				2009				2008
Assets							Liabilities and (Deficit) Equity
Cash and cash equivalents	$	6,323		$	11,484
Receivables, net of allowances							Accounts payable	$	26,189			$	19,021
of $14,487 and $12,091		89,703			118,245		Accrued compensation		19,452				17,274
Inventory		70,605			78,676		Insurance deductible reserves		16,788				17,527
Unbilled receivables		10,571			13,112		Other accrued liabilities		24,524				26,981
Income tax receivable		49,977			50,304		Billings in excess of costs and estimated
Deferred income taxes		—			—		earnings		19,696				24,054
Prepaid expenses and other		4,940			4,864		Current portion of long-term debt		316,309				39,443
Assets of discontinued operations		5,073			5,659		Liabilities of discontinued operations		502				773
Current assets		237,192			282,344		Current liabilities		423,460				145,073
Property and equipment							Insurance deductible reserves		25,466				26,208
Land		34,188			33,996		Long-term debt		381				287,009
Buildings and improvements		120,727			120,814		Other long-term liabilities		32,007				37,163
Equipment		144,385			153,843		Total liabilities		481,314				495,453
Construction in progress		3,444			3,440
Accumulated depreciation		(144,460	)		(148,032	)	Commitments and contingent liabilities		—				—
Assets held for sale		41,451			46,300
Deferred income taxes		—			—		(Deficit) equity
Deferred loan costs		4,100			4,485		Common shares, $0.001 par value:
Other long-term assets		20,696			23,303		authorized 50 million shares; issued and
Other intangibles, net		18,425			19,222		outstanding 29.7 and 29.7 million shares		29				29
Goodwill		—			—		Additional paid-in capital		168,545				169,146
	$	480,148		$	539,715		Deferred compensation common shares obligation		80				878
							Deferred compensation common shares held		(80	)			(878	)
							Accumulated deficit		(165,547	)			(120,327	)
							Accumulated other comprehensive loss, net		(4,193	)			(4,586	)
							Shareholders’ (deficit) equity		(1,166	)			44,262
							Noncontrolling interests		—				—
							Total (deficit) equity		(1,166	)			44,262
								$	480,148			$	539,715

6

Building Materials Holding Corporation

Consolidated Statements of Cash Flows

(thousands)

(unaudited)

	Three Months Ended March 31						Year Ended December 31
	2009			2008			2008
Operating Activities
Net loss attributable to common shareholders	$	(45,220	)	$	(33,861	)	$	(214,809	)
Noncontrolling interests loss, net		—			(39	)		(63	)
Net loss		(45,220	)		(33,900	)		(214,872	)
Items in net loss not using (providing) cash:
Depreciation and amortization		6,141			10,522			37,611
Deferred loan cost amortization		385			2,739			1,621
Deferred loan cost write off		—			—			7,099
Amortization of unrealized loss related to interest rate swap contracts          previously accounted for as cash flow hedge		384			—			—
Amortization of terminated interest rate swap contracts notional reduction          settlement payments		250			—			926
Unrealized ineffective portion of interest rate swap contracts		—			—			3,022
Amortization of warrant discount		62			—			62
Impairment of assets		365			—			60,828
Share-based compensation		249			1,846			4,276
Gain on sale of assets, net		(5,338	)		(3,435	)		(2,225	)
Realized gain on marketable securities		—			(186	)		(542	)
Deferred income tax (benefit) expense		(241	)		13,896			22,534
Changes in assets and liabilities, net of effects of acquisitions and          divestitures of business units:
Receivables, net		29,155			15,435			85,424
Inventory		8,042			7,670			38,190
Unbilled receivables		2,541			8,271			26,804
Income tax receivable		327			—			(40,492	)
Prepaid expenses and other current assets		(73	)		(7,276	)		4,298
Accounts payable		6,951			4,909			(32,836	)
Accrued compensation		(258	)		(3,306	)		(14,724	)
Insurance deductible reserves		(739	)		(1,756	)		(10,961	)
Other accrued liabilities		(1,852	)		(2,540	)		(8,028	)
Billings in excess of costs and estimated earnings		(4,358	)		1,434			275
Other long-term assets and liabilities		(3,343	)		(2,610	)		8,789
Other, net		(241	)		(3,504	)		(205	)
Cash flows (used) provided by operating activities		(6,811	)		8,209			(23,126	)
Investing Activities
Purchases of property and equipment		(570	)		(7,176	)		(16,509	)
Acquisitions and investments in businesses, net of cash acquired		—			(2,450	)		(8,575	)
Proceeds from dispositions of property and equipment		10,828			5,187			14,871
Purchase of marketable securities		—			(13,854	)		(28,589	)
Proceeds from sales of marketable securities		—			10,339			70,221
Other, net		(26	)		(2,797	)		(2,123	)
Cash flows provided (used) by investing activities		10,232			(10,751	)		29,296
Financing Activities
Net borrowings under revolver		2,300			—			—
Principal payments on term notes		(11,986	)		(3,522	)		(19,866	)
Interest rate swap contracts notional reduction settlement payments		(1,220	)		—			(3,835	)
Net payments on other notes		(138	)		(418	)		(2,261	)
Increase (decrease) in book overdrafts		2,418			(4,413	)		(17,616	)
Proceeds from share options exercised		—			9			8
Income tax benefit for share-based compensation		—			(731	)		—
Dividends paid		—			(2,938	)		(2,938	)
Deferred financing costs		—			(4,927	)		(8,847	)
Other, net		44			—			82
Cash flows used by financing activities		(8,582	)		(16,940	)		(55,273	)
Decrease in Cash and Cash Equivalents		(5,161	)		(19,482	)		(49,103	)
Cash and cash equivalents, beginning of period		11,484			60,587			60,587
Cash and cash equivalents, end of period	$	6,323		$	41,105		$	11,484

7

Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	8,407	$	8,876		$	41,863
Cash paid for income taxes	$	9	$	78		$	3,141
Supplemental Schedule of Investing Activities
Liabilities of acquisitions (extinguished)	$	—	$	(2,450	)	$	(8,525	)
Cash paid for acquisitions made this period	$	—	$	2,450		$	8,525
Cash paid for acquisitions made in prior period	$	—	$	—		$	50
Supplemental Schedule of Financing Activities
Fair value of warrants issued	$	—	$	—		$	782
Discount on term note for warrants issued	$	—	$	—		$	(782	)

8