SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
_X_ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 2001 or
---------------------
___ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________________ to ________________
Commission file number 0-19335
BUILDING MATERIALS HOLDING CORPORATION
Delaware 91-1834269
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Building Materials Holding Corporation
One Market Plaza, Steuart Tower, Ste 2650, San Francisco, CA 94105
Telephone: (208)331-4382 or (415)227-1650
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes _X_ No ___
Shares Outstanding as
Class of November 12, 2001:
-----
Common stock $.001 par value 12,975,742
1
BUILDING MATERIALS HOLDING CORPORATION
INDEX
Page
Number
------
PART I -- FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Statements of Income for the three
and nine months ended September 30, 2001 and 2000 3
Condensed Consolidated Balance Sheets as of September 30, 2001
and December 31, 2000 4
Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 2001 and 2000 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II -- OTHER INFORMATION
Item 1 - Legal Proceedings 16
Item 6 - Exhibits and Reports on Form 8-K 16
SIGNATURES 17
2
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(amounts in thousands, except per share data)
Three months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
--------- --------- --------- ---------
Net sales $326,204 $270,536 $817,769 $775,407
Cost of sales 236,052 197,156 590,156 571,944
-------- -------- -------- --------
Gross profit 90,152 73,380 227,613 203,463
Selling, general and
administrative expense 74,309 60,580 195,582 170,586
Other income
(expense), net (330) 504 560 3,667
-------- -------- -------- --------
Income from operations 15,513 13,304 32,591 36,544
Equity in earnings of
unconsolidated companies -- 2,351 4,817 6,603
Interest expense 3,664 4,587 10,534 13,380
-------- -------- -------- --------
Income before
income taxes 11,849 11,068 26,874 29,767
Income taxes 4,562 4,261 10,346 11,460
-------- -------- -------- --------
Net income $ 7,287 $ 6,807 $ 16,528 $ 18,307
======== ======== ======== ========
Net income per common share:
Basic $ 0.56 $ 0.53 $ 1.28 $ 1.44
========= ========= ========= =========
Diluted $ 0.55 $ 0.53 $ 1.27 $ 1.43
========= ========= ========= =========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
September 30,
2001 December 31,
(unaudited) 2000
--------- --------
ASSETS
Current assets
Cash and cash equivalents $ 7,275 $ 4,570
Receivables, net 145,340 111,287
Inventories 96,531 79,023
Prepaid expenses and other current assets 10,159 8,309
-------- --------
Total current assets 259,305 203,189
Property, plant and equipment, net 178,050 167,709
Equity investments in unconsolidated companies -- 31,787
Goodwill and other intangibles, net 79,656 46,679
Deferred loan costs 4,529 3,981
Other 6,155 6,289
-------- --------
Total assets $527,695 $459,634
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 85,399 $ 61,114
-------- --------
Total current liabilities 85,399 61,114
Long-term debt 186,610 165,006
Other long-term liabilities 17,437 12,959
-------- --------
Total liabilities 289,446 239,079
-------- --------
Stockholders' equity
Common stock, $.001 par value,
20,000,000 shares authorized;
12,972,187 and 12,839,607 shares
outstanding, respectively 13 13
Additional paid-in capital 110,332 109,166
Retained earnings 127,904 111,376
-------- --------
Total stockholders' equity 238,249 220,555
-------- --------
Total liabilities and stockholders' equity $527,695 $459,634
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(amounts in thousands)
Nine Months Ended
September 30, September 30,
2001 2000
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 16,528 $ 18,307
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation and amortization 12,556 12,352
Net gain on sale of property, plant
and equipment (884) (2,570)
Equity in earnings of unconsolidated companies (4,817) (6,603)
Distributions received from
unconsolidated companies 5,325 1,666
Changes in assets and liabilities, net of effects
of acquisitions and location sales:
Receivables, net (11,381) (14,243)
Inventories (3,464) (2,715)
Prepaid expenses and other current assets 1,919 6,547
Accounts payable and accrued expenses 18,677 17,329
Other assets and long-term liabilities 2,912 1,461
-------- --------
Net cash flows from operating activities 37,371 31,531
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (20,561) (27,976)
Acquisitions, net of cash acquired (34,324) (5,905)
Proceeds from disposition of property and equipment 6,137 7,981
Proceeds from sale of business unit,
net of cash sold 2,238 --
Other, net (848) (777)
-------- --------
Net cash flows from investing activities (47,358) (26,677)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal borrowings on term notes 7,232 11,100
Net change under revolving credit agreement 10,645 (2,208)
Change in book overdrafts (4,444) (9,163)
Other, net (741) (126)
-------- --------
Net cash flows from financing activities 12,692 (397)
-------- --------
Net change in cash and cash equivalents 2,705 4,457
Cash and cash equivalents, beginning of period 4,570 7,452
-------- --------
Cash and cash equivalents, end of period $ 7,275 $ 11,909
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
BUILDING MATERIALS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by Building Materials Holding Corporation ("BMHC" or the "Company") on
a consolidated basis, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in the consolidated financial statements prepared
in accordance with accounting principles generally accepted in the United States
of America ("GAAP") have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. Although the Company
believes that the disclosures are adequate to make the information presented not
misleading, these condensed consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements and
notes thereto included in the Company's 2000 Annual Report. In the opinion of
management, all adjustments necessary to present fairly the results for the
periods presented have been included. The adjustments made were of a normal,
recurring nature.
Due to the seasonal nature of BMHC's business, the condensed consolidated
results of operations and resulting cash flows for the periods presented are not
necessarily indicative of the results that might be expected for the fiscal
year.
2. NET SALES BY PRODUCT (in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
---- ---- ---- ----
Wood Products $113,470 34.8% $110,660 40.9% $308,050 37.7% $330,342 42.6%
Value-added 164,921 50.6 108,596 40.1 378,758 46.3 306,282 39.5
Building Materials 30,088 9.2 33,705 12.5 82,531 10.1 93,202 12.0
Other 17,725 5.4 17,575 6.5 48,430 5.9 45,581 5.9
-------- ----- -------- ----- -------- ----- -------- -----
$326,204 100.0% $270,536 100.0% $817,769 100.0% $775,407 100.0%
======== ======== ======== ========
6
3. NET INCOME PER COMMON SHARE (in thousands)
Net income per common share was determined using the following information:
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
------- ------- ------- -------
Net income available to
common shareholders $ 7,287 $ 6,807 $16,528 $18,307
Weighted average shares used
to determine basic net
income per common share 12,945 12,778 12,889 12,732
Net effect of dilutive
stock options 203 56 104 80
------- ------- ------- -------
Weighted average shares used
to determine diluted net
income per common share 13,148 12,834 12,993 12,812
======= ======= ======= =======
4. DEBT (in thousands)
At September 30, 2001, debt consisted of the following:
Term note $110,000
Revolving credit facility 72,400
Non-interest bearing term note, net of related discount of $784 3,661
Other 549
--------
$186,610
========
On August 30, 2001, the Company amended and restated its senior credit facility,
increasing the term loan from $102.8 million to $110.0 million and the revolving
credit line from $138.9 million to $190.0 million. Principal payments of the
term loan were rescheduled with quarterly payments resuming on September 30,
2002. Borrowings under the facility bear interest at prime plus 0.50% to 1.50%,
or Offshore Rate plus 2.0% to 3.0%. The agreement expires in December 2004. This
refinancing had no financial effect to the Company's consolidated financial
statements.
The scheduled principal payments of debt at September 30, 2001 are $0.2 million
in 2001, $8.2 million in 2002, $18.1 million in 2003 and $157.8 million in 2004.
Principal payments of $3.6 million due within the next twelve months are
expected to be refinanced through the unused portion of the revolving credit
facility. As a result, this amount has been classified as long-term.
7
5. ACQUISITIONS
On July 3, 2001, the Company purchased the remaining 51% interest in Knipp
Brothers Industries, LLC and certain related entities ("KBI") for total
consideration of $34.3 million in cash, net of cash acquired of $1.8 million.
The Company accounted for this step acquisition using the purchase method of
accounting. The purchase price was allocated to assets acquired of $24.6
million and liabilities assumed of $7.0 million based on their preliminary
estimated fair values at the date of acquisition. The Company has engaged an
independent valuation company to determine the fair value of the assets and
liabilities acquired and management has not yet received the final valuation
report. Management believes that any adjustments that may arise based on a final
valuation report will not have a material effect on the Company's financial
position, results of operations or cash flows. The excess of the purchase price
over the estimated fair value of the net assets acquired is recorded as
goodwill. In accordance with the transition provision of Financial Accounting
Standards Board ("FASB") Statement No. 142, "Goodwill and Other Intangible
Assets", the resulting goodwill has not been amortized and will be tested for
impairment at least annually.
The initial acquisition of the 49% interest in KBI was made in 1999 for $28.0
million in cash and was accounted for under the equity method until July 3,
2001. Under the equity method of accounting the Company allocated its 1999
investment to the assets and liabilities of KBI based on their estimated fair
values at the date of the investment. The excess of this investment over the
estimated fair value of the net assets of KBI owned by the Company was
considered goodwill. The consolidation of KBI resulted in an increase in assets
of $39.8 million, an increase in liabilities of $6.8 million and a decrease in
equity investments in unconsolidated companies of $33.0 million. These amounts
are considered non-cash items in the condensed consolidated statement of cash
flows for the nine months ended September 30, 2001.
The following summarized unaudited pro forma results of operations assume the
acquisition occurred as of the beginning of 2000. The proforma data has been
prepared for comparative purposes only. It does not purport to be indicative of
the results of operations that would have resulted had the acquisitions been
consummated at the beginning of the years presented, or that may occur in the
future. (In thousands, except per share data).
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
-------- -------- -------- --------
Net sales $326,204 $315,436 $903,522 $897,900
Net income 7,287 7,818 $ 18,784 $ 21,033
Net income per diluted
common share $ 0.55 $ 0.61 $ 1.45 $ 1.64
6. NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, the FASB issued Statement No. 141 ("FAS 141"), "Business
Combinations", and Statement No. 142 ("FAS 142"),"Goodwill and Other Intangible
Assets".
8
FAS 141 addresses the accounting for the cost of an acquired business, including
any subsequent adjustments to its cost. FAS 141 supersedes Accounting Principles
Board ("APB") Opinion No. 16, "Business Combinations". FAS 141 requires the use
of the purchase method of accounting for all business combinations, thereby
eliminating the use of the pooling-of-interests method. Further, FAS 141
establishes criteria for determining whether intangible assets acquired in a
business combination should be recognized separately from goodwill. FAS 141 is
effective for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method that are
completed after June 30, 2001.
FAS 142 addresses the accounting for goodwill and intangible assets subsequent
to their acquisition. FAS 142 supersedes APB No. 17, "Intangible Assets". Under
FAS 142, goodwill and indefinite-lived intangible assets will no longer be
amortized and will be tested for impairment at least annually at the reporting
unit level. FAS 142 is effective for fiscal years beginning after December 15,
2001 for all goodwill and other intangible assets recognized in an entity's
statement of financial position at the beginning of that fiscal year, regardless
of when those previously recognized assets were initially recognized. However,
certain provisions of FAS 142 must be applied to goodwill and other acquired
intangible assets for which the acquisition date is after June 30, 2001.
On October 3, 2001 the Financial Accounting Standards Board issued Statement No.
144 ("FAS 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets". The objectives of FAS 144 are to address significant issues relating to
the implementation of FASB Statement No. 121 ("FAS 121"), "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
and to develop a single accounting model, based on the framework established in
FAS 121, for long-lived assets to be disposed of by sale, whether previously
held and used or newly acquired. FAS 144 supersedes FAS 121, however it retains
the fundamental provisions of FAS 121 for (1) the recognition and measurement of
the impairment of long-lived assets to be held and used and (2) the measurement
of long-lived assets to be disposed of by sale. FAS 144 is effective for fiscal
years beginning after December 15, 2001.
9
The Company has not yet completed its analysis of the effect of adoption of
Statements Nos. 141 and 142 on its consolidated results of operations, financial
position or cash flows.
10
BUILDING MATERIALS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements made in this Form 10-Q may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors are discussed in detail in Building
Materials Holding Corporation's Form 10-K for the fiscal year ended December 31,
2000. Given these uncertainties, investors are cautioned not to place undue
reliance on such forward-looking statements. The Company intends to continue its
policy of not updating any such factors or publicly announcing the results of
any revisions to any of the forward-looking statements contained in the Annual
Report on Form 10-K or this Form 10-Q except as required by law.
The following table sets forth for the periods indicated the percentage
relationship to net sales of certain costs, expenses and income items. The table
and subsequent discussion should be read in conjunction with the consolidated
financial statements and the notes thereto appearing elsewhere herein and in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
------ ------ ------ ------
Net sales 100.0% 100.0% 100.0% 100.0%
Gross profit 27.6 27.1 27.8 26.2
Selling, general and
administrative expense 22.8 22.4 23.9 22.0
Other income (expense), net (0.1) 0.2 0.1 0.5
Income from operations 4.8 4.9 4.0 4.7
Equity in earnings of
unconsolidated companies 0.0 0.9 0.6 0.9
Interest expense 1.1 1.7 1.3 1.7
Income taxes 1.4 1.6 1.3 1.5
Net income 2.2 2.5 2.0 2.4
11
KBI ACQUISITION
On July 3, 2001, the Company purchased the remaining 51% interest in Knipp
Brothers Industries, LLC and certain related entities ("KBI") for total
consideration of $34.3 million in cash, net of cash acquired of $1.8 million.
The Company accounted for this step acquisition using the purchase method of
accounting. The initial acquisition of the 49% interest in KBI was made in 1999
for $28.0 million in cash and was accounted for under the equity method until
July 3, 2001.
KBI operating results are included in the consolidated statements of income from
the date of acquisition. For the first and second quarter of 2001 and for
the year ended December 31, 2000 the Company accounted for its 49% interest in
KBI using the equity method of accounting. Pro forma information for the three
months and nine months ended September 30, 2001 and 2000, assuming the
acquisition occurred as of the beginning of 2000, is presented in Note 5 to the
Consolidated Financial Statements for the third quarter of 2001.
THIRD QUARTER OF 2001 COMPARED TO THE THIRD QUARTER OF 2000
- -----------------------------------------------------------
Net sales for the three months ended September 30, 2001 were $326.2 million, up
20.6% from the third quarter of 2000 when sales were $270.5 million. The
increase in net sales resulted primarily from the consolidation of KBI which
contributed $50.6 million of sales for the three months ended September 30,
2001. Same-store sales increased 3.1% as compared to the third quarter of 2000
at facilities that operated for at least two months in the third quarters of
both 2000 and 2001. With the third quarter consolidation of KBI, value-added
products and services accounted for $164.9 million, or 50.6% of net sales for
the third quarter of 2001, an increase from $108.6 million, or 40.1% of net
sales for the third quarter of 2000.
Gross profit as a percentage of sales increased to 27.6% in the third quarter of
2001 from 27.1% in the third quarter of 2000, primarily as a result of increased
sales of higher margin value-added products and services such as
12
roof trusses, pre-hung doors, framing (from the KBI acquisition and
consolidation) millwork, and pre-assembled windows.
Selling, general and administrative ("SG&A") expense was $74.3 million in the
third quarter of 2001 as compared to $60.6 million in the third quarter of 2000.
This increase in SG&A resulted primarily from the consolidation of KBI which
accounted for $11.4 million of SG&A for the three months ended September 30,
2001. SG&A increased as a percentage of net sales from 22.4% in 2000 to 22.8% in
2001. The Company attributes most of this percentage increase to the higher
relative costs associated with value-added products and services.
Other income (expense) net, was ($0.3) million for the third quarter of 2001 and
includes the effects of the Company's $1.0 million write-off of its investment
in BuildNet, Inc. BuildNet filed under chapter 11 of the Bankruptcy Code and the
Company has been advised that BuildNet will be conducting an orderly liquidation
of its assets. Based on an analysis conducted by the Company during the third
quarter of 2001, management determined that its investment will not be recovered
once the liquidation proceedings are complete.
Interest expense of $3.7 million in the third quarter of 2001 decreased from
$4.6 million in the same period of 2000, primarily due to lower interest rates.
Average debt levels for the third quarter of 2001 were $190.1 million compared
to $183.6 million in the third quarter of 2000.
FIRST NINE MONTHS OF 2001 COMPARED WITH THE FIRST NINE MONTHS OF 2000
- ---------------------------------------------------------------------
Net sales for the nine months ended September 30, 2001 were $817.8 million, up
5.5% from 2000 net sales of $775.4 million. The increase in net sales resulted
primarily from the consolidation of KBI, which contributed $50.6 million of
sales for the nine months ended September 30, 2001. Same-store sales decreased
1.3% at facilities that operated for at least six months of the nine month
period of 2000 and 2001. With the third quarter 2001 consolidation of KBI,
value-added products and services accounted for $378.8 million, or 46.3% of net
sales for the nine months ended September 30, an increase from $306.3 million,
or 39.5% of net sales for the first nine months of 2000.
Gross profit as a percentage of sales improved to 27.8% in the first nine months
of 2001 from 26.2% in the first nine months of 2000, primarily as a result of
increased sales of higher margin value-added products and services such as roof
trusses, pre-hung doors, framing (from the KBI acquisition and consolidation),
millwork, and pre-assembled windows.
13
SG&A expense was $195.6 million in the first nine months of 2001 as compared to
$170.6 million in 2000. The increase in SG&A resulted primarily from the
consolidation of KBI in the third quarter of 2001 which accounted for $11.4
million of SG&A for the three months ended September 30, 2001. SG&A increased as
a percentage of net sales to 23.9% in 2001 from 22.0% in 2000. The Company
attributes most of this percentage increase to the higher relative costs
associated with value-added products and services for the first nine months of
2001 compared with 2000.
Other income (expense) net, was $0.6 million for the first nine months of 2001
and includes the effects of the Company's $1.0 million write-off of its
investment in BuildNet, Inc. BuildNet filed under chapter 11 of the Bankruptcy
Code and the Company has been advised that BuildNet will be conducting an
orderly liquidation of its assets. Based on an analysis conducted by the Company
during the third quarter of 2001, management determined that its investment will
not be recovered once the liquidation proceedings are complete. Other income
(expense), was $3.7 million for the first nine months of 2000 and includes the
effects of a $2.2 million gain from the sale of real estate in Beaverton,
Oregon.
Interest expense decreased to $10.5 million in the first nine months of 2001
from $13.4 million in the same period of 2000, primarily due to lower average
debt levels and lower interest rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary need for capital resources is to fund future growth and
capital expenditures. Capital resources have primarily consisted of cash flows
from operations and debt.
OPERATIONS
In the first nine months of 2001, net cash from operations was $37.4 million
compared to net cash from operations of $31.5 million in the first nine months
14
of 2000. The increase in cash provided by operations is primarily due to
additional distributions from unconsolidated companies and timing differences
between operating assets and liabilities in 2001 compared to 2000. Working
capital increased from $142.1 million at September 30, 2000 to $173.9 million at
September 30, 2001 due primarily to the consolidation of KBI.
CAPITAL INVESTMENT AND ACQUISITIONS
Capital expenditures were $20.6 million in the first nine months of 2001.
Capital expenditures were incurred to acquire additional property and to expand
and remodel existing building materials centers and value-added facilities.
Acquisitions, net of cash acquired, were $34.3 million related to the Company's
acquisition of the remaining 51% interest in KBI. Proceeds from the sale of
business units, net of cash sold, were $2.2 million during the first nine months
of 2001, which primarily related to the Grand Junction, Colorado and Lewiston,
Idaho locations.
FINANCING
Net cash provided by financing activities was $12.7 million in the first nine
months of 2001 compared to cash used of $0.4 million in the same period in 2000.
The Company borrowed under its term loans and revolving credit facility in order
to assist in the finance of the acquisition of KBI and the purchase of property
and equipment.
On August 30, 2001, the Company amended and restated its senior credit facility,
increasing the term loan from $102.8 million to $110.0 million and the revolving
credit line from $138.9 million to $190.0 million. Principal payments on the
term loan were rescheduled, with quarterly payments resuming on September 30,
2002. Borrowings under the facility bear interest at prime plus 0.50% to 1.50%,
or Offshore Rate plus 2.0% to 3.0%. The agreement expires in December 2004.
At September 30, 2001, outstanding borrowings under the credit facility included
$110.0 million under the term loan and $72.4 million under the revolving credit
line.
In 1998, a shelf registration was filed with the Securities and Exchange
Commission for 2,000,000 shares of common stock. The Company may issue these
shares from time to time in connection with future business combinations,
mergers and/or acquisitions.
15
Based on the Company's ability to generate cash flows from operations, its
borrowing capacity under the revolver and its access to debt and equity markets,
the Company believes it will have sufficient capital to meet its anticipated
needs.
DISCLOSURES OF CERTAIN MARKET RISKS
The Company experiences changes in interest expense when market interest rates
change or changes are made to its debt structure. Previously, the Company has
managed its exposure to market interest rate changes through periodic
refinancing of its variable rate debt with fixed rate debt obligations.
Commodity wood products, including lumber and panel products, accounted for
approximately 37.7% and 42.6% of net sales in the first nine months of 2001 and
2000, respectively. Prices of commodity wood products, which are subject to
significant volatility, could directly affect net sales. The Company does not
utilize any derivative financial instruments.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation and other legal matters arising
in the normal course of business. In the opinion of management, the
Company's recovery or liability, if any, under any of these matters
will not have a material effect on the Company's financial position,
liquidity or results of operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits -
Exhibit 3.7 - Amended and Restated Bylaws
(b) Reports on Form 8-K
On July 17, 2001, Building Materials Holding Corporation, Registrant
filed a Form 8-K with the Securities and Exchange Commission
announcing the acquistion of the remaining 51% interests not owned by
Registrant and Registrant's wholly-owned subsidiary, BMC Framing,
Inc., a Delaware corporation, in three related entities: 1) Knipp
Brothers Industries, LLC, a Delaware limited liability company; 2)
KBI Distribution, LLC, a Delaware
16
limited liability company; and 3) KB Industries Limited Partnership,
a California limited partnership.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BUILDING MATERIALS HOLDING CORPORATION
Date: November 12, 2001 /s/ Robert E. Mellor
------------------------------------------
Robert E. Mellor
President, Chief Executive Officer
and Director (Principal Executive Officer)
Date: November 12, 2001 /s/ Ellis C. Goebel
------------------------------------------
Ellis C. Goebel
Senior Vice President - Finance
and Treasurer
(Principal Financial Officer)
INDEX TO EXHIBITS
BUILDING MATERIALS HOLDING CORPORATION
Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 2001
Page
Exhibit Description Number
- ------- ----------- ------
3.7 Amended and Restated Bylaws
17