Building Materials Holding Corp. In Danger of Breaching Loan Covenants

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July 29, 2008

Building Materials Holding Corp. In Danger of Breaching Loan Covenants

San Francisco, CA-based Building Materials Holding Corp. announced it is out of compliance with financial covenants under its current credit facility, based on preliminary evaluation of its financial results for the second quarter ended June 30, 2008.

The company has been in discussions with lenders to address the default and prevent disruption to business operations. BMHC expects it will reach an agreement on a temporary waiver of covenants to preserve liquidity and an amendment to the credit facility that will better reflect current market conditions.

Continuing weakness in the residential housing market has troubled the provider of building materials and construction services for the past year, leading to facility closures in California and Arizona. Employee headcount was reduced by 20% in the first quarter of 2008.

Financial reports for the second quarter have not been released to the public. First quarter 2008 sales declined 37% from the prior year to $355 million. BMHC reported a net loss for the first quarter of $34 million, an increase over the prior-year quarter when the supplier had a net loss of $10 million.

As of July 28, 2008, there was $29 million outstanding on the revolver and $340 million outstanding on the term loan.

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